So when there’s another crisis requiring shovel large amounts of money out the door, we can do so without lots of fraud.

Rolling Stone has a long article about the massive fraud that resulted from various COVID relief-related efforts. It was necessary to do, but without adequate safeguards, lots of people set up various fraudulent schemes to receive payments they didn’t deserve (boldface mine):

The list of various CARES Act schemes is endless and astounding: the couple who scammed some $20 million off unemployment insurance while living as high rollers in Los Angeles; the Chicago man under indictment for selling bunk Covid tests and allegedly raking in $83 million (he has declared his innocence); the Florida minister who the feds allege faked the signature of his aging accountant, suffering from dementia, to steal $8 million in PPP loans (in a twist, the pastor has been locked in a legal battle to determine whether he’s psychologically fit to stand trial). One particularly loathsome and effective plot: offering fake meals to underprivileged children in Minnesota to reel in a whopping sum of $250 million. Noted serial liar George Santos allegedly got in on the act: He was charged with receiving unemployment benefits while he had a six-figure job in Florida. (Santos has pleaded not guilty.) Other examples are admittedly funny: A guy named John Doe got unemployment money, as did someone named Mr. Poopy Pants, and so did a person going by the name of Diane Feinstein, presumably not the senator from California…

By the government’s own accounting, we potentially dished out some $16.2 billion to folks with “suspicious” emails; $267 million was sent to the identities matching current federal prisoners, some on death row; another nearly $29 billion to people living in multiple states; we even sent out more than $139 million to dead people. California alone accounts for a whopping $20 billion in pandemic unemployment-insurance fraud…

It must be said that this should not be a red-versus-blue blame game; given the unprecedented nature of the crisis, some feel like the Trump administration acted correctly in releasing the money as fast as possible. “My liberal friends get mad at me for saying this, but the Trump administration handled pandemic unemployment as well as can be expected,” says Michele Evermore, former deputy director for Policy in the Office of Unemployment Insurance Modernization, which handles unemployment insurance. “The problem was so dire and so vast, and people needed help immediately. There was really no choice.”

One way around this would be some kind of national banking service, such as Federal Reserve accounts administered through the Postal Service, or even just a return to the Postal Service banking system. It would be harder to commit fraud–though someone like Santos could still lie about his employment status–and, likewise, someone pretending to be someone else wouldn’t be able to access the money, since it would go to the account of the person they’re pretending to be. It also would make it easier to find fraud to begin with, since the recipient of the funds is known: there is no one named Mr. Poopy Pants, but if John Smith pretends he is Mr. Poopy Pants, the money still goes to Mr. Smith’s account–which can be tracked.

Obviously, there are many other reasons for a public banking service, but shoveling benefits out the door is a really good reason. And have no doubt: we will need to do something like this again.