July 31, 2013
Now you know why your tax bill is so high. I’m not kidding, the NYT had a news article highlighting a study by the Government Accountability Office that found over the four and half years from October 2007 to April of 2012, $10.6 million was paid in subsidies to farmers who were dead. Using CEPR’s really cool budget calculator it was possible to quickly determine that this number was less than 0.0001 percent of federal spending over this period. (Okay, I cheated. I treated the current year’s budget as being equal to the budgets for 2007-2012, but I divided the $10.6 million by 4.0 instead of 4.5 to compensate for the lower budgets in these years.)
Anyhow, it would have been useful to put the $10.6 million in context so readers would know how important it is to the budget. It also could have compared the improper payments to the size of the farm program. The government would have paid out roughly $80 billion in subsidies over this period, which means the payments to dead people would have been a bit more than 0.013 percent of total payments. It is also worth noting that some of this money was recovered.
It would be desirable to eliminate all improper payments in government programs, but it is implausible that a program that sends out tens of billions of dollars a year in subsidies will not have some errors. The job of the media is to report on these errors in a way that makes their importance meaningful to readers. The NYT flunked badly on this score with this article.
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