Hell on Wheels - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 19 August 2014
Hell on Wheels A  A  A

London, England

Dear Diary,

Dow up another 175 points. Whee!

Corrupt money corrupts everything it touches.

Do you remember, last year about this time, we saw two guys in electric wheelchairs racing each other down Eutaw Street in Baltimore?

The local liquor store must have been getting ready to close.

All over the city you see these motorized wheelchairs. You might wonder how people got around before they were invented. Most probably walked. Or powered their wheelchairs with their own arms. You might also wonder whether eliminating the need to use arms as well as legs is such a good thing. Finally, you might wonder how so many poor people are able to afford such fancy wheels.

But therein lies a tale recently told, in part, by the Washington Post. As you might imagine, it involves a scam that has made many people rich.

--- Advertisement ---
Only Few Hours Remain To Sign Up For ValuePro...

This is your last chance to sign up for our ValuePro service before the new price takes over.

As We told, ValuePro is one of our most popular services based on Warren Buffett's proven investing approach.

And apart from individual returns like 213%, 169% and 45% to name a few, on the whole ValuePro has also given more than DOUBLE the return as the Sensex itself!

However, after tonight, you will have to pay Rs 30,000 to get access to it. And this will be more than double of what you pay right now.

So don't hesitate.

Only a few more hours left to sign up at the old price!

Act now! Click here for full details...

We'll let the WP tell its story; then, we'll tell ours:

    The government has paid billions to buy power wheelchairs. It has no idea how many of the claims are bogus.

    The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first. Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they'd provided expensive wheelchairs to Medicare patients - who, in reality, didn't need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair.

    Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and "scooters" for 2.7 million people. Today, the government cannot even guess at how much of that money was paid out to scammers.
Now we see how so many poor people have these expensive wheelchairs - about $3,000 each. But what we don't see is why the government was willing and able to go along with the scam.

Many will say it was an 'oversight.' Others will point out that Medicare needs to stiffen its defenses against fraud. They may be right, but they don't explain why the feds allowed the system to go on for 15 years after the scam was discovered before they began to get tough.

What's the explanation? Simple. Those 15 years were marked by the loosest money policies in history. For the last 5 years, in particular, the feds have been able to borrow at approximately zero cost. And there were plenty of experts to tell them that the more they borrowed - and spent - the better the economy worked. Who cares about money when you can get it for free?

And so the feds squandered billions providing motorized wheelchairs to people who couldn't afford them and probably didn't need them anyway.

But there were other costs. Chief researcher, EB Tucker, reports:
    And here's another unintended consequence of this program. The chair recipient can sue his landlord if a ramp is not provided. And don't think just any old ramp will do.....it needs to be ADA compliant. I went through this in one of my rental houses. The ramp can only have a certain pitch. Simply put.....for every vertical inch risen the ramp must be one foot long. So if you need to provide access for your tenant and the existing stairs are 30" the ramp needs to be 30 feet long! That's almost the entire front yard of the house. Or you can zig zag it but then you'll run into more regulations regarding clearance at the turns.

    I'm sure you think I am exaggerating so here's a quick fact sheet on the subject.
Yes, dear reader, money is more than pieces of paper...or even lumps of gold. It expresses and regulates the economic relationships between people and both defines and describes who gets what, how, and when. When money is no longer true, what can you trust?

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

Get The Daily Reckoning directly
in your mail box.
Just enter your e-mail address » 

Read our Privacy Policy and Terms Of Use.

Equitymaster requests your view! Post a comment on "Hell on Wheels". Click here!

1 Responses to "Hell on Wheels"


Aug 19, 2014

It appears the Americas are trying to emulate India in terms of scams. This wheelchair scam sounds similar to the crutches scam that we read in media in which a key UPA minister was involved. A scam exists in every field that the government touches - medical & healthcare, defence, airways, railways, education, infra projects in the name of development such as toll roads, licencing system etc.

Equitymaster requests your view! Post a comment on "Hell on Wheels". Click here!

Recent Articles:
Which Gods Will Bring Down the US Empire?
August 17, 2017
Mr Trump is in the White House and the gods are in their heavens; what's not to like?
Will They Haul Off Trump's Statue, Too?
August 16, 2017
All across the country, the old gods become devils. New, gluten-free gods take their places...
Farm Loan Waivers: Why Bad Economics Makes for Good Politics
August 14, 2017
It is because the negative effects of the waivers aren't clearly visible.
The Most Important Innovation in Finance Since Gold Coins
August 10, 2017
Bill connects the dots...between money and growth, real money and real resources, gold and cryptocurrencies...and between gold, cryptocurrencies, and time.