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The Dark Side of COVID-19 Relief: Dissecting the Misuse of Public Tax Money

government waste income tax public tax dollars Jun 19, 2023
Image of a covid relief application with the tax overlay that says "Tax Scam! How much was stolen?"

During the pandemic, a massive fraud scheme unfolded in the United States and Canada. Fraudsters exploited COVID-19 relief funds, and deceitful individuals managed to collect these benefits through various fraudulent schemes.

As a result of these fraud schemes, this became the largest financial swindle in the history of both countries. Billions of dollars in federal COVID-19 relief funds, intended to combat the devastating pandemic and stabilize the crumbling economies, were shamelessly plundered by these thieves.

How did this happen on such a massive scale? Investigators and experts from outside the government argue that insufficient oversight and inadequate applicant restrictions were to blame. The urgency to rapidly disburse trillions of dollars in relief aid led to a lack of proper scrutiny during the early stages of the pandemic. Essentially, the ease with which these criminals operated made the entire scheme possible.

In March 2020, when the pandemic lockdown was just beginning, I felt inspired to write the first edition of "Write Off Almost Anything." It was a time when the US and Canadian governments started providing significant financial assistance to help stabilize the economy and support individuals and businesses affected by the lockdowns.

In the book, I discussed these financial aids and pondered how the money was being distributed and if there were sufficient systems in place to ensure it reached the right places. I also anticipated that the government would need to explore new methods of tax collection in the future to repay the debt incurred from pandemic aid.

Reflecting on those early months in 2020, it is evident that a substantial amount of money was disbursed by the government, and transparency regarding its allocation was not always clear. In the US, Congress approved stimulus bills injecting around $5 trillion into the economy, benefiting households, small businesses, hospitals, and schools.

Now, in 2023, we have more information about the expenditure and destinations of these funds. It appears that some of the money may not have been utilized as intended, leading to the emergence of the term "Great Grift" to describe this issue. Our tax money appears to have been used questionably, and both the US and Canada now face considerable debts, resulting in anticipated tax increases.

Further scrutiny has been directed toward the distribution of this aid, with criticism of unnecessary allocations and potential involvement in fraudulent activities. Some economists and politicians even speculate that the influx of money may have contributed to increased inflation. A Bloomberg News article titled "How Much Covid Relief Was Stolen?" published on July 12, 2022, highlighted the uncertainty surrounding the misappropriation of COVID-19 relief funds, suggesting that the amount stolen could potentially reach hundreds of billions of dollars.

In Canada, a similar situation unfolded. Despite having an economy about a tenth the size of the US, Canada disbursed $210 billion in relief funds. However, an Auditor General report from November 2022 revealed that up to $32 billion may have been distributed to ineligible recipients.

Undoubtedly, these financial aid programs have resulted in significant debts for both countries, and it appears that future tax increases will be necessary to address this predicament.

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