Medicaid claims for autism in Minnesota skyrocketed from $3M to $400M in five years. This suggests that large-scale entitlement fraud doesn't just steal money; it can also create the illusion of a worsening social crisis by manufacturing data, leading to misallocated resources and a distorted public perception of the problem's scale.

While politicians can ignore massive fraud to maintain patronage systems, the financial markets will not. As the scale of waste in states like Minnesota and California becomes clear, bond investors will reprice the risk of municipal bonds, potentially triggering a fiscal crisis that forces accountability where political will has failed.

States can increase congressional representation and electoral votes by boosting population counts for the census. This creates an incentive to attract residents, including illegal immigrants, and fund their needs by leveraging federal assistance programs, often through fraudulent means, effectively offloading the cost of gaining political power.

A key mechanic of the fraud involved paying daycare "employees" in untraceable cash. This allowed workers to remain officially unemployed on paper, enabling them to simultaneously collect full welfare benefits. This "double-dip" strategy maximized the financial extraction from multiple government systems at once.

According to James Burnham's "Iron Law of Oligarchy," systems eventually serve their rulers. In government, deficit spending and subsidies are used to secure votes and donor funding, meaning leaders are incentivized to maintain the flow of money, even if it's wasteful or fraudulent, to ensure their own political survival.

The government's standard procedure is to disburse funds and attempt to recover improper payments later—a highly inefficient process that costs hundreds of billions annually. A more effective system would require real-time prepayment verification, defaulting to "no pay" if eligibility cannot be confirmed, preventing fraud before it occurs.

Congress uses its spending power to enact policies in areas where it lacks direct authority, like education or local transport. By offering "conditional spending," it creates powerful incentives for states to comply with federal standards to receive necessary funds.

Beyond headline-grabbing scandals, the most insidious impact of a kleptocratic administration is its refusal to enforce existing laws, from financial regulations to anti-corruption acts. This quiet dismantling of the legal framework fosters a culture of impunity where bad actors thrive, ultimately harming ordinary people and destabilizing the entire system.

The federal budget reflects the values of those who vote. Since young people vote at lower rates than seniors, policies benefiting seniors (like Social Security adjustments) are prioritized over those for children (like the child tax credit), effectively defunding the young.