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Reply #88: Yes, I did, but obvisly did NOT understand what I was talking about [View All]

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happyslug Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Dec-07-11 09:57 PM
Response to Reply #87
88. Yes, I did, but obvisly did NOT understand what I was talking about
When Ford made the Pinto, Ford made a calculation, that the saving in using the $2 part instead of the $3 part OVER THE ENTIRE PRODUCTION TIME PERIOD, less the cost incurred by the number of accidents where people would burn do to a rear end collusion would mean Greater Profits for Ford. If you made 1 million Pinto, you saved $1 million dollars. If Ford had to pay out 1/2 million dollars to the people injured do to the $2 part, Ford would still have a net gain of 1/2 million dollars. This is called "Economy of Scale".

The same goes for Welfare Costs. The cost to catch one person cheating includes the cost of checking everyone who applies even if only one person in a 1000 cheats the system. If we assume a cost of just $10 to do the Investigation per person, that is $10,000 dollars to investigate 1000 applicants. If we assume $174 a month welfare grant (The grant for one person in my home County), you are looking at a savings of $2088 per fraudulent applicant per year. Thus Welfare has to spend $10,000 to "save" $2088. Even if the "savings" can be for five years, the system barely breaks even.

Side Note: the average time on Welfare is less then a year.

Thus the point I was trying to make. The amount of fraud possible in today's welfare system is very small when it comes to people applying for Welfare. It is further reduced by the fact that the majority of the cost of welfare is Long term care (i.e. Elderly in old folks homes) NOT people on welfare.

In 2007, the percentage of the budget of Pennsylvania's department of Welfare as to "Cash Maintenance" program (Actual cash check) was less then 5% of the total Welfare Budget, if you include Food Stamps, it is only 13% of the Budget of the Department of Welfare:
http://pennbpc.org/understanding-welfare-spending-penns...

The big cost for welfare has been long tern medical care. In those situations the people receiving the care is NOT receiving the Welfare Grant, the long term medical care provider is. Thus checking on Welfare recipients if they are cheating the system would do little to reduce the Budget of the Department of Welfare. You have to address Medical Costs to do that and that is an issue no one wants to address for you then have to address the issue of health insurance.

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