MW Elon Musk's Social Security audit was an embarrassment. The real fraud is political.
By Brett Arends
Social Security's watchdog did the math on the so-called fraud, and it's a joke
Would-be Bond villain Ernst Stavro Blowhard in last year's incarnation.
While Elon Musk asks investors to gamble $80 billion on his grandiose promises about SpaceX, it's worth taking another look at the grandiose promises he was making just a year ago.
That's when he was claiming to have found "$1 trillion" in free money in the federal budget, including vast sums of money allegedly being spent on 20 million people supposedly using the Social Security numbers of dead people.
Remember that?
It just so happens that the watchdog overseeing the largest single item in the federal budget, the inspector general of Social Security, has just submitted its latest report to Congress. It details all the terrible "waste, fraud and abuse" that the Trump administration has been able to uncover in the gigantic Social Security budget, which is nearing $1.7 trillion a year.
The total savings achieved in the last six months? Try $202 million. It sounds a lot until you remember that the Social Security is currently spending $137 billion-in other words, $137,000 million-per month. Actually, the latest numbers show Social Security spent $4.5 billion every single day in April, so the total savings figure covers about one hour's spending.
The inspector general also found $12.6 million in "questioned costs," plus another $64.5 million in funds that it reckoned the Social Security Administration could "put to better use."
The Social Security Administration currently pays benefits to 71 million people. Total numbers referred for prosecution during the six months came to less than 800. Total indictments and criminal complaints: 232.
The inspector general says there are $2.6 billion in potential cost savings that have yet to be realized from unimplemented recommendations.
The inspector general also estimates that total overpayments probably came to about $9.3 billion last year. That's a big number, except that it's about half of 1% of the total Social Security budget for the year, about half of 1% of the total budget deficit, and less than 0.2% of total federal spending.
So much for those 20 million dead people claiming Social Security.
The equivalent inspector general's report from two years ago, under the Biden administration, achieved $145 million in savings during the six month period. So the latest number is up by about a third. That's good news, because we're saving money, but it's bad news if you think this stuff is going to have any impact whatsoever on the budget, the national debt, taxes and the deficit.
The number of criminal indictments and complaints, and the number of people referred for prosecution, during the last six months under President Trump is actually slightly lower than the equivalent number two years ago under President Biden. But the difference is small.
The biggest fraud in America right now is the fraudulent claim that the federal budget contains so much "waste, fraud and abuse" that tracking it down can bring the budget into some sort of alignment. If only that were true. This fraudulent argument is the reason the U.S. government is now running a deficit nearing $2 trillion, and last year Congress was able to pass a big unfunded and unaffordable tax cut.
There are several things that help politicians and their unindicted co-conspirators perpetuate the fraud. One is the sheer complexity of the federal budget and its absurd lack of transparency. This is catnip for conspiracy theorists. Another is the public's goldfish-style memory in the modern age: People easily forget the last time they were promised this free money, which makes it easier for politicians to promise it again. Politicians have been promising this waste, fraud and abuse bonanza since Reagan first got elected 46 years ago and it still hasn't turned up.
And there are other reasons. One is the confusion between "million" and "billion," so that propagandists can pump out headlines about millions, or even "hundreds of millions," being saved and the casual reader thinks that's material compared to the $1.9 trillion-i.e., $1,900 billion, or $1,900,000 million-deficit. The other is to confuse annual savings and cumulative savings. The Government Accountability Office recently reported, or estimated, a headline-grabbing "$3 trillion" in so-called "improper payments" in the federal budget.
But that was a cumulative figure over 23 years, including budgets going all the way back to President George W. Bush. That $3 trillion figure averages $130 billion a year.
The GAO says last year the improper payments were an estimated $186 billion. But even that isn't a useful number because it includes underpayments - where the federal government failed to pay money it should have. The amount of overpayments last year was $153 billion, it said.
The latest report from the Social Security inspector general includes some excellent illustrations of the problem. It lists some of the more remarkable fraud convictions of the six month period. A woman in North Dakota was found to have fraudulently received $128,601 in SSI payments. But that figure was collected over 10 years - averaging fraud of $12,860 a year. A man in St. Louis was found to have fraudulently received $106,923 in disability benefits. But that was over a 20-year period, so that averaged barely $5,000 a year. And so on.
The most eye-opening case involved Brian Ditch of Salem, Mo., who effectively imprisoned his uncle, a quadriplegic veteran, at home for years and stole about $100,000 a year in veterans and Social Security benefits. This included hiding the body when the uncle died in 2019. But you could argue most of the money was effectively stolen from the uncle rather than the taxpayer.
The takeaways from all this are worth repeating. The numbers simply aren't there to support any possible dream that the U.S. can bring its federal budget back into sanity without actual cuts to Medicare and Social Security and tax increases. People can whine all they want but math doesn't lie. The refusal of the public to accept this fact, thanks to 50 years of sustained propaganda and lies, means that the U.S. government may not be forced to put its house in order until there is an actual credit crisis. When this would happen is completely unknown.
Meanwhile, it also has interesting implications for the SpaceX IPO. Elon Musk is clearly a genius and an extraordinary entrepreneur and there is much to admire in what he has achieved. But the DOGE affair of last year, and the latest math from the Social Security Administration, should give investor pause.
Does Elon Musk have the character to admit what he doesn't know, to change his mind, or to admit he was wrong and apologize? (Contacted through Tesla $(TSLA)$, Musk did not respond to a request for comment.) The most recent evidence isn't encouraging.
-Brett Arends
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(END) Dow Jones Newswires
June 04, 2026 13:53 ET (17:53 GMT)
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