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.
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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.
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.
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.
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.
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?
I'm sure you think I am exaggerating so here's a quick fact sheet on the subject.
Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.
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