(The Economic Collapse Blog)—One of the reasons why the federal government is 40 trillion dollars in debt is because there is an almost unbelievable amount of fraud in our system. When we talk about crime in America, most of the time we focus on the violent thugs terrorizing our streets, but the truth is that they are small-time criminals.
The big-time criminals are those that are raking in millions of dollars by stealing from the government. Medicare and Medicaid are considered to be the two largest victims. It has been estimated that Medicare fraud costs U.S. taxpayers up to $80 billion a year, and it has been estimated that Medicaid fraud costs U.S. taxpayers up to $100 billion a year. We are hemorrhaging money like crazy because of all of this fraud, and there is no end in sight.
The worst fraud occurs in major urban areas in blue states.
Everyone knows this.
The Democrats that are in power in these areas are very hesitant to crack down on the fraud, because they would literally be cracking down on the people that voted them into office.
California is a perfect example.
The state is being accused of losing $180 billion to fraud over the years, and California Governor Gavin Newsom’s office vigorously disputes that figure.
But as you will see below, the facts clearly show that there has been a tremendous amount of fraud going on.
Since California Governor Gavin Newsom is preparing to run for the presidency, he is desperate to keep this from becoming a major political issue.
And so he doesn’t want independent journalists like Nick Shirley poking around in his state.
On Saturday, Newsom signed the “Stop Nick Shirley Act” into law…
Gov. Gavin Newsom signed California’s controversial “Stop Nick Shirley Act” into law on Saturday, just days after a radical left-wing operative crashed the journalist’s Capitol interview and launched a crude personal attack on him.
Assembly Bill 2624 expands California’s Safe at Home program to employees of nonprofits that serve people navigating the immigration system.
Critics have blasted the measure as a way to intimidate people “trying to shine light on bad behavior,” , such as Shirley’s investigative reports on fraud in California and Minnesota.
Those that violate this new law could be hit with fines as high as $50,000 and even face prison time in certain circumstances…
The measure imposes penalties on people who distribute information or images of covered immigration workers under circumstances the law defines as inciting violence or threats. Penalties can range from $10,000 to $50,000, with violations potentially carrying jail or prison sentences.
In a post on X, Nick Shirley explained why this new law specifically targets people like him…
He is right.
They are out to get him.
But they can’t stop federal authorities from cracking down on fraud.
One man in California that was recently arrested by the feds is being charged with stealing 27 million dollars from Medicare…
He probably assumed that he would never get caught, because most of those that are doing this never get caught.
In another case, California authorities actually broke up a fraud ring that had stolen 267 million dollars from the state…
California Attorney General Rob Bonta, together with the California Department of Health Care Services (DHCS), today announced charges filed against 21 suspects and the dismantling of a major hospice fraud scheme that defrauded California of $267 million. Operation Skip Trace resulted in the arrest of five people after ten different locations were searched in Southern California. In addition, two handguns and over $757,000 in cash were seized.
“This isn’t a political game for us. This is about protecting taxpayer dollars, protecting the programs that sick and vulnerable Californians rely on, and protecting our state,” said Attorney General Rob Bonta. “Over the life of this fraud scheme, not a single legitimate hospice service was ever provided yet millions were billed in a brazen, calculated scheme that exploited the Medi-Cal system. This wasn’t a mistake or a loophole; it was deliberate fraud. This kind of abuse undermines trust, drains critical resources, and threatens care for those who truly depend on it. This is a perfect example that we have taken a firm stand to investigate, prosecute, and shut down hospice fraud wherever it exists.”
Of course 267 million dollars is just the tip of the iceberg.
It has been estimated that Medi-Cal has lost approximately “$146 billion in taxpayer funds to fraud on Gavin Newsom’s watch”…
Talcove estimates that the Medicaid fraud rate in California is 20 percent, which he calls a “very conservative” figure. Federal officials, however, believe that the current Medi-Cal fraud rate is even higher—and, given the state’s oversight failures and massive Medi-Cal expansion under Newsom, they are almost certainly right. Multiple high-ranking sources at the U.S. Department of Health and Human Services, which is currently probing fraud in California, told City Journal on the condition of anonymity that their initial estimate for Medi-Cal’s fraud rate since 2019 is 25 percent.
Based on state experts’ best guesses of annual Medi-Cal expenditures and applying a conservative, 15 percent fraud rate to each fiscal year since 2019, Medi-Cal has lost some $146 billion in taxpayer funds to fraud on Gavin Newsom’s watch.
It is so easy to do this in California, because there is so little accountability.
Most of the time, you either have to cross someone very important or be incredibly sloppy in order to get caught.
And it appears that even the state government is stealing money.
A member of Congress from California named Young Kim is alleging that the state government “spent more than $1.3 billion in federal Medicaid dollars on non-emergency care for illegal immigrants”…
Last week, Congresswoman Young Kim (CA-40) sent a letter demanding answers from Gavin Newsom after the Centers for Medicare & Medicaid Services (CMS) found California spent more than $1.3 billion in federal Medicaid dollars on non-emergency care for illegal immigrants.
According to CMS, California claimed federal Medicaid reimbursements for services that are explicitly prohibited under federal law. Medicaid funds may be used for emergency care regardless of immigration status; however, CMS auditors found California used federal dollars for non-emergency care for illegal aliens, in violation of longstanding eligibility rules.
“California just spent 1.3 billion taxpayer dollars on healthcare for illegal immigrants while seniors, disabled Americans, and low-income families are pushed to the back of the line,” said Rep. Young Kim. “While hardworking Americans were footing the bill, Gavin Newsom was galivanting around Switzerland following President Trump like a lost puppy. I’m demanding accountability from Governor Newsom and making sure the American taxpayer gets paid back what they’re due.”
Will anyone ever get in trouble for this?
I doubt it.
Fraud has become a way of life in California.
During the last pandemic, fraudsters stole approximately 20 billion dollars from California’s Employment Development Department…
COVID-19 — and the swell of jobless Californians that the virus’ spread produced — created two, separate billion-dollar problems for California’s Employment Development Department. Those issues have continued to plague the agency since the pandemic.
The first problem was the massive amount of fraud that took place when California rushed to distribute federal, and some state, funds to an unprecedented number of people who were suddenly out of a job. The total amount of fraud is estimated to be at least $20 billion.
EDD has worked to recover some of the stolen funds by partnering with federal and state law enforcement agencies. The department reported that thousands of investigations have resulted in 670 convictions — $5.9 billion has been recovered.
They convicted 670 people, but the vast majority of the money will never be returned.
The list of criminals that were involved in stealing money from California’s Employment Development Department includes a fraud ring from Romania and a rapper from Memphis that goes by the name “Nuke Bizzle”…
The scams began almost immediately, with criminals from around the world reportedly siphoning cash from the program. In one case, a Romanian-led fraud ring orchestrated a $5 million unemployment-insurance scheme. Members allegedly “recruited potential [EDD-benefit] applicants through Facebook” and met them at “parks throughout Southern California to complete the application process,” according to the U.S. Attorney’s Office for the Southern District of California. “Applicants paid . . . a partial fee up front for assisting with fraudulent applications and another fee after applicants received EDD payments,” the office said. Many of the fraudsters wired the stolen funds to Romania.
Around September 2020, Fontrell Antonio Baines, a rapper from Memphis known as Nuke Bizzle, released a music video on YouTube entitled “EDD.” In the song, Baines bragged about ripping off California’s UI program. “Go to the bank with a stack of these,” Baines rapped, holding up EDD envelopes. Another rapper can be heard saying: “You gotta sell cocaine, I just file a claim.” All told, Baines obtained more than $700,000 in stolen funds using preloaded EDD debit cards. He pleaded guilty to federal charges.
There are so many more examples that I could share with you.
But I think that you get the point.
All over the nation, word has gotten out that it is incredibly easy to steal from the government.
Most of those that are stealing from the government are Democrats.
And Democrats are extremely determined to cover this up because they are deeply concerned that it might hurt them when voters go to the polls.
Meanwhile, the fraud continues.
In fact, we just learned that three postal carriers that were allegedly involved in a 24 million dollar fraud scheme have just been apprehended…
This is what moral decay looks like.
Given the right opportunity, a significant portion of the population will steal.
It isn’t right, but they don’t care.
A few will get arrested, but the overall level of fraud just keeps increasing.
This is a major national crisis, and urgent action is required.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
