Overview
How much taxpayer money disappears to fraud every year and why doesn't the government stop it? John Stossel and Andrew McClenahan of the United Council on Welfare Fraud examine how government welfare programs lose up to $521 billion annually, why outdated systems and misaligned incentives make fraud easy, and what a 20-year-old YouTuber uncovered that government investigators missed. This video challenges students to consider the trade-offs of large-scale government spending and asks whether better solutions exist.

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Grade level and subjects
• Recommended for grades 6-12
• Subjects: Government
• Works in Classroom, Hybrid, and Homeschool settings

What students will learn
By the end of this lesson, students will be able to:
• describe the scope of government welfare fraud and identify the key factors that make it possible;
• compare how government agencies and private organizations differ in their incentives to detect and prevent fraud;
• examine why outdated recordkeeping systems and misaligned incentives allow fraud to persist across federal and state programs; and
• assess whether current approaches to welfare spending can be reformed to reduce fraud while still helping people in genuine need.

Key concepts and terms covered
DOGE (Department of Government Efficiency), Fraud, Incentive, Penalties, Welfare, and Welfare Fraud.

Sample discussion questions
• According to the video, how much money does the federal government lose to fraud each year?
• President Biden promised to catch cheaters. Why did that effort fall short?
• Governor Walz said he was accountable but blamed poorly written laws. Is that a sufficient explanation? Explain.
• What are the trade-offs of requiring benefit recipients to look for a job or get job training?
• What does this video suggest about the unintended consequences of well-intentioned government programs?

What’s in the free teacher’s guide
This printable 21-page Teacher's Guide includes a lesson description, learning objectives, key vocabulary, a fill-in viewing guide with answer key, discussion and analysis questions, classroom activities, and the full video transcript.

Standards alignment
Aligned to state standards — use the SITC Standards Tool to match this video to the standards in your state.

Related resources
• Lessons in Lyrics: Incentives Matter — Why do people do what they do? Because incentives matter. Change the reward, change the behavior. From student choices to government policy, incentives shape how people act.
• Equal Shares: Why Collectivism Fails — What happens when government tries to make everyone equal? This video explores the unintended consequences of collectivist policies and why voluntary cooperation produces better outcomes than forced redistribution.