Example of Government Wastage

This is a good example how government fritter away taxpayer money.

From the Wall Street Journal Blog, (bold highlights mine)

The U.S. Internal Revenue Service had difficulty implementing new tax benefits in 2010, paying $111 million in erroneous benefits related to the stimulus law, a Treasury Dept. report said.

The IRS didn’t have controls in place to stop people who weren’t eligible from claiming the $8,000 first-time homebuyer tax credit, and tax credits for plug-in vehicles, among others. The findings were released Thursday by the Treasury Inspector General for Tax Administration.

To put the errors in perspective, IRS processed more than $81 billion in claims for stimulus-related tax benefits in 2010, involving upwards of 90 million returns.

About 126,000 of those returns were flagged by TIGTA as including erroneous claims that weren’t caught by the IRS before they were processed. In some cases, the IRS put compliance controls in place during the tax-filing season to catch the errors.

The underlying message is that the stimulus programs has led to undue wastage.

And the sad part is that no one seems accountable for such errors. And I don’t think that this is limited to the “stimulus programs”.

To consider, the stimulus is just one aspect of the variable bureaucratic operations, which means there would be many more leakages elsewhere.

And applied to the Philippines where social institutions are weaker than the US, the losses would be magnified.