Because government loves us so much, it wants to protect us — from everything except government, that is.
Government can deceive us about the costs of Obamacare, the odds of winning the lottery, or whether there really is a Social Security Trust Fund. But it hates competition from the private sector.
The official federal website, USA.gov, has pages of guidance to protect us from banking and ATM fraud, credit card scams, insurance fraud, scholarship and financial aid frauds, phone scams, investment fraud, citizenship and immigration scams and dozens more.
Pennsylvania’s attorney general this week issued a warning that cold weather brings out phony and overpriced offers to insulate homes. Ohio’s attorney general is warning about fake Super Bowl tickets. South Carolina attorney general is warning about utility scams. The attorney general of California has issued an alert is about illegal immigrants being targeted for false amnesty papers.
The Internal Revenue Service even makes YouTube videos to denounce tax scams. Those warnings may go unheeded, though, because who trusts the IRS?
Thousands of Americans got calls from make-believe IRS tax collectors last year. I received one. A heavily-accented voice claimed to be calling from the police station, ready to have me arrested unless I forked over money instantly. I laughed it off; my taxes are current. But I reported it because I worried that some people might get suckered.
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But I will never know whether that lawyer in Nigeria was on the level. He emailed me about splitting the take if I would help a rightful African monarch to reclaim millions from a numbered bank account.
The Federal Trade Commission warns about identity theft, phony telemarketing, fake shopping websites, and more. FTC officials say 2 million complaints are filed each year, bilking consumers for $1.6 billion, with identity theft and phony tax and debt collectors being the most prominent.
That’s still less than the estimated $2 billion we pay to call various “psychic hotlines.” Some actually advertise that other hotlines are indeed phony, but they are the “real psychics.”
Is government likewise telling us about private-sector con artists, while we get bilked by government?
MIT Professor Jonathan Gruber essentially admitted this, telling an audience that Obamacare was enacted thanks to the “stupidity of the American voter.”
But if you like being gullible, you get to keep being gullible.
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How about the Social Security Trust Fund, which claims assets of $2.8 trillion to cover future retirement benefits? By law, all of those funds must be invested in U.S. Treasury IOUs, but the government has spent all of that money. It’s gone. Since 2010, Social Security each year pays out more than it takes in. To cover the payments, our government must borrow from somebody else (such as the Chinese).
Then there are the lotteries. A Tennessee legislator last year proposed warning labels on lottery tickets: “Warning: You will probably lose money playing the lottery.”
State lotteries raked in $70 billion in 2014, with an estimated 10 percent spent on advertising and overhead and another $20 billion going to schools and other beneficiaries. That left about $43 billion, 60 percent, to be paid in prizes — except that almost $1 billion went unclaimed. By contrast, casino slot machines typically pay back about 99 percent of the money wagered.
The gaming industry reports that most lottery tickets are bought by middle-class people. But proportionately more are bought by people who can’t afford to lose. But lose they do.
Black Americans spend five times as much as whites on state lottery games. Those with annual household income lower than $10,000 spend $597 a year buying lottery tickets. That compares with $540 a year of tickets bought by an average household.
But neither USA.gov nor the Federal Trade Commission website report lotteries as scams.
Instead, the official government attitude is proclaimed in the advertising: You can’t win if you don’t play. But then you can’t lose either.
Government has made itself the watchdog to stop private-sector frauds. But like any good con artist, government distracts you by drawing away your attention while it picks your pocket.
• Ernest Istook is a former Republican congressman from Oklahoma. Get his free email newsletter by signing up at eepurl.com/JPojD.
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