The Peter Principle has applications outside of the business world. If ever there was a perfect example of the Peter Principle, it would be government. The United States government has certainly promoted itself to its level of incompetence.
Take for example the federal government’s Medicare program. The healthcare program provides medical coverage for 46 million Americans. Out of a $453 billion budget, there is an estimated $6 billion in fraud every year. CBS’s 60 Minutes program recently conducted an investigation into Medicare fraud and uncovered a shocking number of front organizations defrauding the embarrassingly incompetent government agency.
In several cases, suspicions of fraud were reported directly to the U.S. Department of Health and Human Services with repeated inept responses that the matters were being investigated. This indicates either an inability or unwillingness to guard taxpayer dollars from being wasted or abused. Either way, such an outrageous lapse in oversight is inexcusable. Taxpayer money—the product of others’ labor—is spent with a cavalier, careless attitude.
Medicare is just one of numerous examples of systemic fraud, waste and abuse in government spending. Bureaucracy is almost a complimentary description of the turgid, intractable complexity that federal government programs have become.
Another embarrassing example of government ineptitude is the Bernie Madoff scandal. For sixteen years, one of Wall Street’s most successful businessmen operated a $65 billion Ponzi scheme right under the nose of the Securities and Exchange Commission. In a 450-page report released by the SEC’s inspector general, the agency is excoriated for missing repeated opportunities to catch Madoff—even at the earliest stages of the scheme, when more investor money might have been saved. The Obama Administration’s dumbfounding response to the SEC’s incompetence is to increase its power to prevent future Madoff-type scandals.