Uncle Sam's Free Money And The Great Scooter Chair Scam

By Bill Bonner

Dow up another 175 points. Wee!

Corrupt money corrupts everything it touches.

Do you remember, last year about this time, we saw two guys in electric wheelchairs racing each other down Eutaw Street in Baltimore?

The local liquor store must have been getting ready to close.

All over the city you see these motorized wheelchairs. You may wonder how people got around before they were invented. They probably walked. Or powered their wheelchairs with their own arms.

You may also wonder whether eliminating the need to use arms as well as legs is such a good thing. Finally, you may wonder how so many poor people are able to afford such fancy wheels.

The Great Wheelchair Scam

Therein lies a tale recently told, in part, by The Washington Post. As you might imagine, it involves a scam that has made many people rich.

We’ll let the Post tell its story. Then we’ll tell ours.

The government has paid billions to buy power wheelchairs. It has no idea how many of the claims are bogus.The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first.

Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they’d provided expensive wheelchairs to Medicare patients – who, in reality, didn’t need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair.

Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and “scooters” for 2.7 million people. Today, the government cannot even guess at how much of that money was paid out to scammers.

Now we see how so many poor people have these expensive wheelchairs. (They cost about $3,000 each.) But what we don’t see is why the government was willing and able to go along with the scam.

Many will say it was an “oversight.” Others will point out that Medicare needs to stiffen its defenses against fraud. They may be right, but they don’t explain why the feds allowed the system to go on for 15 years after the scam was discovered before they began to get tough.

What’s the explanation?

Simple. Those 15 years were marked by the loosest money policies in history. For the last five years, in particular, the feds have been able to borrow at roughly zero cost.

And there were plenty of experts on hand to assure them that the more they borrowed – and spent – the better the economy worked. Who cares about money when you can get it for free?

And so the feds squandered billions of dollars providing motorized wheelchairs to people who couldn’t afford them and probably didn’t need them anyway.

Unintended Consequences

But there were other costs. E.B. Tucker – chief researcher at our newly launched Bill Bonner Letter – reports:

And here’s another unintended consequence of this program. The chair recipient can sue his landlord if a ramp is not provided. And don’t think just any old ramp will do… It needs to be ADA compliant.I went through this in one of my rental houses. The ramp can only have a certain pitch. Simply put, for every vertical inch the ramp rises, it must be one foot long.

So if you need to provide access for your tenant and the existing stairs are 30 inches high, the ramp needs to be 30 feet long! That’s almost the entire front yard of the house. Or you can zigzag it but then you’ll run into more regulations regarding clearance at the turns.

Yes, dear reader, money is more than pieces of paper… or even lumps of gold. It expresses and regulates the economic relationships between people. It defines and describes who gets what… how… and when.

When money is no longer true, what can you trust?


David Stockman's Contra Corner is the only place where mainstream delusions and cant about the Warfare State, the Bailout State, Bubble Finance and Beltway Banditry are ripped, refuted and rebuked. Subscribe now to receive David Stockman’s latest posts by email each day as well as his model portfolio, Lee Adler’s Daily Data Dive and David’s personally curated insights and analysis from leading contrarian thinkers.