The scale of fraud uncovered in recent years has exposed how government transfer programs function, even as meaningful public or legislative reckoning remains largely absent. What began as a series of pandemic-related scandals has revealed something broader and more troubling: large-scale fraud is not an anomaly within the modern welfare state. The federal government, taxpayers, lose between $233 billion and $521 billion annually to fraud, based on data from 2018 to 2022. Fraud at this scale is not an implementation flaw to be fixed with more regulation, it is a predictable consequence of welfare systems that sever income from production and exchange and accountability from decision-making. As Rothbard argued, and as Ron Paul reiterated for decades, the only durable solution is to shrink the scope of government programs that make such fraud possible. Smaller government does not eliminate dishonesty, but it sharply reduces the rewards for it. Until that reality is confronted, fraud will remain an enduring feature of the welfare state and operate like a warehouse that issues payments based on shipping manifests submitted by the shippers themselves, with inspections conducted months or years later.