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    Powerball's $473.1 million jackpot has a winner. Here's the tax bill

    One ticket sold in Arizona matched all six numbers drawn Wednesday night.
    The cash option — which most jackpot winners choose — is $283.3 million.
    Here’s how much could go to taxes.

    Joe Raedle | Getty Images News | Getty Images

    A single lottery ticket sold in Arizona is about to change someone’s life — after the IRS takes a piece of the windfall, of course.
    Wednesday night’s Powerball drawing resulted in one ticket matching all six numbers drawn to land the $473.1 million jackpot. The amount was higher than originally anticipated, due to strong ticket sales.

    More from Personal Finance:Here’s how to buy new work clothes on a budgetThese are the best and worst U.S. places to dieThe IRS has sent more than 78 million refunds
    The advertised figure isn’t what the winner will end up with. Whether the prize is taken as an annuity of 30 payments over 29 years or as an immediate, reduced cash amount, taxes end up consuming a sizable bite out of the winnings.
    For this jackpot, a required federal tax withholding of 24% would reduce the $283.3 million cash option — which most jackpot winners choose — by about $68 million.

    However, the top federal rate is 37%, so more generally would be due at tax time. For illustration purposes: If the winner had no reduction in income — for example, significant charitable contributions from the winnings — another 13%, or $36.8 million, would be due to the IRS ($104.8 million in all).
    There also will be Arizona state taxes imposed. The top effective tax rate is 2.98% for tax year 2022, which if applied to the lump sum would mean $8.4 million going to the state, according to the Arizona Lottery.
    The winner will get 180 days to claim the prize.

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    Climate change will drive new transmission of 4,000 viruses between mammals by 2070

    A new peer-reviewed study published Thursday in the journal Nature found global warming will drive 4,000 viruses to spread between mammals, including potentially between animals and humans, for the first time by 2070.
    Bats are especially responsible for novel viral transmission because they fly.
    It would cost $1 billion to properly identify and counteract viral spreading patterns.

    Blaise Kadjo, a specialist in mammals and a professor at the Felix Houphouet-Boigny University, shows a species of bat in the researcg laboratary of the zoology and animal biology depertment at the University in Abidjan on February 4, 2021. – Scientists say that bats are a crucial part of the food chain, but are also a suspected source of viruses, including COVID-19, that have leapt the species barriers to humans. Hunting and human encroachment on their habitat has heightened the risk of transmission. (Photo by SIA KAMBOU / AFP) (Photo by SIA KAMBOU/AFP via Getty Images)
    Sia Kambou | Afp | Getty Images

    A new peer-reviewed study published Thursday in the journal Nature found global warming will drive 4,000 viruses to spread between mammals, including potentially between animals and humans, for the first time by 2070.
    Global warming will push animals to move away from hotter climates, and that forced migration will result in species coming into contact for the first time, according to the study.

    The Covid-19 pandemic was likely caused by the transmission of the SARS-CoV-2 virus from the southeast Asian horseshoe bat to humans.
    The additional 4,000 cross species viral transmissions between mammals does not mean there will be another 4,000 potential Covid-19 pandemics, Greg Albery, a postdoctoral Fellow at Wissenschaftskolleg zu Berlin in Berlin and a co-author of the study, told CNBC.
    “But each one has the potential to influence animal health and maybe to then spill over into human populations,” Albery told CNBC. “Either way, it is likely to be very bad news for the health of the affected ecosystems.”
    Bats are particularly likely to transmit viruses because they fly. Bats will account for almost 90% of the first encounters between novel species and most of those first encounters will be in southeast Asia, the report found.
    But that’s not a reason to vilify bats.

    “Bats are disproportionately responsible, but we’re trying to accentuate that this isn’t the thing to blame them for — and that punishing them (culling, trying to prevent migrations) is likely to only make matters worse by driving greater dispersal, greater transmission, and weaker health,” Albery said.
    For the report, Albery and his co-author, Colin J. Carlson, a postdoctoral fellow at Georgetown University, used computer modeling to predict where species would likely overlap for the first time.
    “We don’t know the baseline for novel species interactions, but we expect them to be extremely low when compared to those we’re seeing motivated by climate change,” Alberty told CNBC.
    Those calculations show that tropical hotspots of novel virus transmission will overlap with human population centers in the Sahel, the Ethiopian highlands and the Rift Valley in Africa; as well as eastern China, India, Indonesia, and the Philippines by 2070. Some European population centers may be in the transmission hotspots, too, the report found. (Albery declined to specify which ones.)
    The report puts a fine point on a trend that scientists have predicted for some time.
    “This is an interesting study that puts a quantitative estimate on what a number of scientists have been saying for years (me included): changing climate — along with other factors — will enhance opportunities for introduction, establishment, and spread of viruses into new geographic locations and new host species,” Matthew Aliota, a professor Department of Veterinary and Biomedical Sciences at the University of Minnesota, told CNBC. Aliota was not involved in the study at all.
    “Unfortunately, we will continue to see new zoonotic disease events with increasing frequency and scope,” Aliota said. (Zoonotic diseases are those that are spread between animals and humans.)
    While he agrees with the general conclusion of the study, modeling the future transmission of viruses is tricky business, said Daniel Bausch, president of the American Society of Tropical Medicine and Hygiene, an international organization dedicated to reducing tropical disease transmission. Bausch was not involved in the study at all.
    “Human behavioral change (e.g. hunting of migrated animals) and land perturbations in response to climate change – for example urbanization and habitat changes such as highway and dam building – may impede mammal migrations, and limit mixing. There may be hot spots, but also cold spots—i.e. areas that become uninhabitable,” Bausch said.
    It could cost a billion dollars to properly identify and counteract the spread of zoonotic viruses the report finds, and that research will be critical to preventing pandemics.
    “Big picture, preparedness is the key and we need to invest in research, early detection, and surveillance systems,” Aliota told CNBC. “Studies like this can help better direct those efforts and it emphasizes the need to rethink our outlook from a human-focused view of zoonotic disease risk to an ecocentric view.” 
    How humans respond to predictions is also critical. For example, Bausch noted, humans can avoid interaction with bats to a large extent.
    “I would argue to date that response, not surveillance, has been our major impediment,” Bausch told CNBC. “We detected H1N1 influenza rapidly in 2009, arguably SARS CoV-2 early in 2019, certainly Omicron BA1 and BA2 variants early, but nevertheless failed to keep these pathogens from circulating globally. As much attention needs to be paid to response systems as surveillance and prediction.”

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    McDonald's closures in Russia cost the fast-food giant $127 million in Q1 — here's what it could mean for the country

    Two months after the fall of the Berlin Wall in 1989, McDonald’s — the very symbol of Western capitalism — opened its first store in the Soviet Union. It was a big moment, and the restaurant drew large crowds.
    More than 30 years later, amid pressure from U.S. consumers to protest Russia’s invasion of Ukraine, McDonald’s last month announced it would be temporarily closing all 850 of its locations in Russia.

    Starbucks, PepsiCo and Coca-Cola likewise announced their plans to pause business activity in Russia, and Yum Brands, which franchises about 1,000 KFC restaurants and 50 Pizza Hut locations in Russia, suspended all investment and restaurant development in the country. 
    More than 750 companies have since curtailed operations in Russia.
    McDonald’s has also temporarily shuttered its 108 locations in Ukraine for safety reasons. Russia and Ukraine together account for roughly 2% of McDonald’s global sales and less than 3% of its operating income.
    There’s no telling when or if McDonald’s will resume its operations in Russia and Ukraine, but the company is taking a hit to its bottom line. The company announced during its first-quarter earnings that the closures cost McDonald’s $27 million in leases, supplier costs, and employee wages, and another $100 million in unsold inventory. Altogether, those expenses dragged its earnings down by 13 cents per share in the first quarter.
    In the meantime, the fast-food chain has committed to continue paying its employees in both countries.

    Watch the video to learn more about the impact of McDonald’s leaving Russia.

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    Georgia just became the latest state to require personal finance education

    Georgia Governor Brian Kemp makes remarks during a visit to Adventure Outdoors gun shop as he pushes for a new state law to loosen requirements to carry a handgun in public, in Smyrna, Georgia, January 5, 2022.
    Alyssa Pointer | Reuters

    High school students in Georgia will soon have guaranteed access to a personal finance course before they graduate.
    On Thursday, Republican Gov. Brian Kemp signed into law SB 220, a bill requiring personal finance classes for high school students. Starting in the 2024-2025 school year, all 11th- and 12th-grade students will need to take at least a half-credit course in financial literacy before graduation.

    The measure “will ensure that [students] learn financial literacy in our schools, like the importance of good credit and how to budget properly so that they can be better prepared for the world beyond the classroom,” said Kemp during the signing event.
    More from Invest in You:16 U.S. cities where women under 30 earn more than their male peersGreat Resignation is spurring employers to offer financial-wellness benefitsA four-day workweek pilot program is now underway in the U.S. and Canada
    A growing trend
    Georgia is the 13th state to mandate personal finance education for its students, according to nonprofit Next Gen Personal Finance, which tracks such bills.
    It’s the latest in a growing trend of states adding personal finance education. In the last 12 months, Florida, Nebraska, Ohio and Rhode Island have passed similar laws and are in the process of implementing them for all students.
    Once Georgia’s bill is implemented, it will mean that more than 35% of students in the U.S. will have access to a financial literacy class. That’s more than double the share of students that had access to such coursework in 2018, according to Next Gen Personal Finance.

    Having laws requiring personal finance education are important to ensure students have equal opportunities. There are high schools that offer personal finance courses in states without mandates, but access is not equal, according to a recent report from the nonprofit.
    Only 10% of students in states without guaranteed access to personal finance can take such a course. That share drops to 1 in 20 in schools where 75% of students are nonwhite or receive free and reduced lunch.
    What state may be next
    There are still a few states with pending legislation that may be passed later in the year.
    South Carolina, for example, has a bill currently in conference committee. Now that Georgia’s legislation has become law, South Carolina is the only state in the Southeast that does not have mandated personal finance coursework, according to Tim Ranzetta, co-founder of Next Gen Personal Finance. More

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    What Ford, a 9-to-5 workweek pioneer, is learning about the hybrid office

    Ford’s non-site-dependent employees returned to offices earlier this month amid the company’s embrace of hybrid work models.
    The automaker is also reviewing its manufacturing facilities, seeing if it can find ways to improve worker wellbeing, nutrition, and even natural light in the spaces.
    “I really hope that we all embrace this as an opportunity to really rethink and reimagine the evolution of work,” says Ford Chief People and Employee Experience Officer Kiersten Robinson.

    Ford Motor Company world headquarters, Dearborn, Michigan on January 19, 2021.
    Aaron J. Thornton | Getty Images

    After several setbacks and delays due to the Covid-19 pandemic, Ford Motor Co. finally started to welcome its salaried workforce back to its offices earlier this month.
    It also came alongside a significant shift in workplace policy from the company that helped establish the traditional five-day, 40-hour workweek as the norm: the start of its new hybrid work model where non-site-dependent employees could work flexibly between a Ford campus location and remote.

    Ford perhaps had reason to believe many of its employees would look to return to the office once the plan rolled out. The company polled 56,000 global employees who were working remotely in June 2020 about their work preferences post-pandemic and 95% said they wanted a mix of remote and in-office work, while 5% said they wanted to be onsite.
    Still, Ford Chief People and Employee Experience Officer Kiersten Robinson said during a CNBC Work virtual event on Wednesday that the early results “have been a little surprising.”
    “When we opened our doors on April 4 to our employees to welcome them back into the workplace – those that wanted to come in – the numbers that actually have come back into work have been lower than we expected,” Robinson said.
    While the company is “very early in the experience,” according to Robinson, Ford is still seeing signs among those that have come into work that they’re able to “do highly collaborative team-based brainstorming and strategic work together.”
    Here are some of the key things Ford has observed since welcoming back workers.

    Focus on auto manufacturing jobs

    Given that Ford has many employees that have jobs that don’t allow for remote or hybrid work, Robinson said that the company has been “really clear that the nature of work informs where and how work gets done.”
    “Our manufacturing plants, you can only do that work in the facility and so our focus in those locations is to make sure that the work environment is as conducive and inviting as possible, and what are some of the additional tools and amenities that we can provide,” she said.
    That has led Ford to undergo an effort to examine how it can improve manufacturing facilities, looking at ways to improve worker wellbeing, nutrition, and even natural light in the space – “conditions that can really impact your work experience,” Robinson said.
    For knowledge workers, Ford is asking departments to meet with their teams and create a plan around what they need to do in a 90-day period, asking questions about the key work tasks, and how and where would be the best ways to do that work.
    “We’re measuring sentiment, we’re measuring the employee experience over those 90 days, but of course, we’ll be able to measure the output and whether or not employees feel as though with that agency and with that choice, they’re as productive as they need to be,” Robinson said.

    Collecting data on new office habits

    Robinson said that Ford has already revamped 33% of its facilities in southeast Michigan to “make them more conducive for collaborative hybrid work,” and that it has a roadmap to continue to do that in the coming years.
    Ford is assuming that roughly 50% of its employees will be in the office on any given day, but Robinson said it will test that hypothesis more clearly over the coming months.
    Ford confirmed a small workforce reduction on Wednesday when it reported earnings, a net loss of $3.1 billion in the first quarter, largely due the loss in value of a 12% stake in EV start-up Rivian Automotive. As it pivots to EVs, 580 U.S. salaried employees and agency workers, largely in engineering, were let go as part of the Ford+ turnaround plan.
    The company has no plans to reduce the number of facilities it has, but rather make the spaces as conducive as possible for hybrid work, she said.
    With workers now back in the office, Ford is keeping a closer eye on how the spaces are actually being used.
    “We’ve got very clear data around traffic patterns, the days that are the most popular and we’re using sensors in many of our facilities to even measure what types of spaces are being used and for what purpose,” Robinson said.
    “There is no perfect answer here, other than I don’t think we can go back to how we worked pre-pandemic,” she said. “I really hope that we all embrace this as an opportunity to really rethink and reimagine the evolution of work and to experiment and really invest in understanding employee feedback, employees’ sentiment and to use that to continue to refine and reshape what work looks like.” More

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    McDonald's revenue tops estimates, fueled by price hikes and overseas same-store sales growth

    McDonald’s first-quarter earnings and revenue topped Wall Street’s estimates, fueled by higher prices in the U.S. and strong international sales growth.
    The company said the suspension of operations in Ukraine and Russia cost $127 million, or 13 cents per share, in the quarter.
    In the United States, same-store sales increased 3.5%, surpassing StreetAccount estimates of 3.3%.

    McDonalds and other local stores remain shuttered due to COVID-19 at Times Square on April 13, 2020 in New York, NY.
    Eduardo Munoz | Getty Images

    McDonald’s on Thursday reported better-than-expected earnings and revenue, fueled by price hikes in the U.S. and strong international sales growth.
    But the war in Ukraine and inflation in the fast-food giant’s home market loomed large over its quarterly report. CEO Chris Kempczinski said that the conflict hasn’t affected consumer behavior across the rest of Europe yet, but some U.S. consumers are shrinking their orders or buying cheaper items.

    Shares of the company rose more than 1% in premarket trading.
    Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

    Earnings per share: $2.28 adjusted vs. $2.17 expected
    Revenue: $5.67 billion vs. $5.59 billion expected

    The fast-food giant reported first-quarter net income of $1.1 billion, or $1.48 per share, down from $1.54 billion, or $2.05 per share, a year earlier. 
    The company spent $27 million to pay for leases, employee wages and supplier costs in Russia and Ukraine after suspending its operations in both of those countries due to the war. McDonald’s reported an additional $100 million charge for inventory in its supply chain that will likely spoil because of the temporary closures of its restaurants in Ukraine and Russia. Altogether, those costs dragged its earnings down by 13 cents per share.
    The company also said that it has reserved $500 million, or 67 cents per share, for a potential settlement related to an international tax matter, but it did not share more details.

    Excluding costs related to the tax settlement, its restaurants in Ukraine and Russia and other items, McDonald’s earned $2.28 per share, topping the $2.17 per share expected by analysts surveyed by Refinitiv.
    Like the broader restaurant industry, McDonald’s has been facing higher commodity and labor costs, leading the company and its franchisees to raise prices. CFO Kevin Ozan said the company expects elevated inflation to continue throughout 2022, given macroeconomic conditions.
    Net sales rose 11% to $5.67 billion, beating expectations of $5.59 billion. Global same-store sales climbed 11.8% in the quarter, fueled by strong growth in markets like France and the United Kingdom. Digital system-wide sales surpassed $5 billion in the quarter.
    In the United States, same-store sales increased 3.5%, surpassing StreetAccount estimates of 3.3%. The company credited price increases and marketing promotions for growth in its home market. A year ago, the fast-food chain reported U.S. same-store sales growth of 13.6% as it lapped the weak demand of the early pandemic lockdowns.
    In the first quarter, McDonald’s U.S. menu prices were up about 8% compared with the year-ago period. Executives said that consumers are starting to trade down to cheaper menu items or having smaller orders.
    Ozan said consumers are worried about inflation, particularly gas prices.
    “We are certainly keeping a close watch on lower-end consumers, just to make sure that we’re still providing the right value for our lower-end consumers,” he said. “But one of the things that’s probably helpful right now, as you know, is food at home is has been increasing even more than food away from home.”
    In March, prices for food at home were up 10% compared with a year ago, while food away from home had risen just 6.9%, according to the Bureau of Labor Statistics.
    McDonald’s international operated markets segment, which includes France, the U.K. and Australia, reported same-store sales growth of 20.4%. The company said the reduction of Covid-19 measures boosted sales in the quarter. Sales in the U.K. also got a lift from the limited-time Chicken Big Mac, which Kempczinski called the market’s most successful food promotion.
    In the company’s international developmental licensed markets segment, same-store sales rose 14.7%, driven by strong demand in Japan and Brazil. However, China saw same-store sales shrink during the quarter as Covid’s resurgence resulted in renewed lockdowns.
    Read the full earnings report here.

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    How would an energy embargo affect Germany’s economy?

    RUSSIA’S DECISION to halt the supply of gas to Bulgaria and Poland has added fuel to an already heated debate in Germany, which is heavily reliant on the commodity. For weeks the country’s economists and officials have argued over just how much a ban on Russian hydrocarbons would harm the economy. Now it seems imaginable that Russia itself could turn off the taps. What toll would an embargo take? A wide body of research, which examines a range of past disruptions, sheds light on the question.The relationships between modern firms are not simple links connecting one producer with another, but a tangle of complex interactions. The breakdown of a seemingly insignificant link in the chain can disrupt firms that are either upstream or downstream of it, causing wider damage. In a paper published in 2019 David Baqaee of the University of California, Los Angeles, and Emmanuel Farhi of Harvard University used a model of complex supply networks to study the oil shocks of the 1970s. Linkages between firms and sectors meant that the overall economic effect was quite a bit larger than the direct impact on sectors that used oil. Recent research on the effect of social distancing on America by Jean-Noël Barrot, then of HEC Paris, and his co-authors finds that ripple effects through production networks accounted for more than half of the total economic impact.Another much-studied instance of disruption is the earthquake that struck north-eastern Japan in 2011. As the worst-hit areas only accounted for less than a twentieth of GDP, local disruption should not have had a noticeable nationwide effect. But it did. In a review Vasco Carvalho of the University of Cambridge and colleagues disentangle the impact on the affected areas from the ripple effects along supply chains, and find that the latter accounted for more than half the hit to Japanese growth.Researchers have also uncovered the types of links and mechanisms that enable shocks to propagate widely. The shutdown of a company altogether is one way in which a jolt can create a much bigger economic hit, according to a paper by Daron Acemoglu of the Massachusetts Institute of Technology and Alireza Tahbaz-Salehi of Northwestern University (as well as another study by Mr Baqaee). That explains why Alan Mulally, then the chief executive of Ford, a carmaker, urged American lawmakers to bail out his competitors during the global financial crisis. Ford feared the collapse of the auto sector’s suppliers, which would cause severe disruptions at its own plants, too.Intimate commercial relationships, such as those within firms, tend to be especially affected, because they are harder to replace. Another study of Japan’s 2011 earthquake by Christoph Boehm of the University of Texas, Austin, and others finds that the American subsidiaries of Japanese firms also suffered, as did their suppliers. Other research also concludes that the more customised the relationship between firms and their suppliers, the bigger the ripple effects. Mr Barrot and Julien Sauvagnat of Bocconi University examine 30 years of American natural disasters and find that disruption to just one supplier leads to a loss in sales for a downstream firm of two to three percentage points, which, considering that most suppliers provide a small portion of a firm’s production inputs, is a sizeable fall.Such findings provide fodder for opponents of an energy embargo in Germany. And some estimates of the impact of an embargo also suggest that the short-term disruptions could be large. Six leading German research institutes conclude that an embargo could lead to a GDP loss for the country of around 1% this year and 5% in 2023. The Bundesbank estimates a hit of 5% in 2022.Yet there are two reasons why things need not be so bad. For a start, just as past experience shows that supply disruptions can have sizeable near-term effects, it also shows that the economy in aggregate has a great ability to adjust. In 2010 China banned the export of rare-earth metals to Japan, one of the world’s biggest users of the minerals. Japanese firms were able to quickly substitute away from previously cheap rare earths and find alternative supplies, according to research by Eugene Gholz of the University of Notre Dame and Llewelyn Hughes of the Australian National University. In a study of the potential effects of a Russian energy embargo on Europe, Rüdiger Bachmann of the University of Notre Dame and his co-authors find that while the hit could be large, it would be partly offset by the economy’s ability to adapt. The overall impact, they reckon, could be in the region of 0.5-3% of GDP.Production, interruptedMoreover, it is within the gift of governments to mitigate the short-term pain of supply disruptions. EU officials, for instance, are mulling stricter sanctions on energy imports from Russia. The more notice firms receive about the measures, which could include a tax on Russian energy, the easier adjusting to them is likely to become. Past episodes suggest that if policymakers do want to change regulations or trade relationships, they should do so consistently and carefully. A liberalisation of Indian trade in the 1990s led to little wider disruption because it was gradual, helping firms adjust. A recent study by Alessandra Peter of New York University and Cian Ruane of the IMF points out that Indian firms were able to find substitutes for inputs.Governments could also take into account the fact that businesses may not do enough to ensure that networks are solid in the near term. Matthew Elliott of the University of Cambridge and others find that firms might invest in the robustness of their supply chains if they have a business case to do so. But they might not seek to ensure the resilience of the wider network, because they do not stand to reap the rewards from such investment. Encouraging firms and households to shift away from using fossil fuels, as a tariff would do, could enhance that resilience. Managed well, Germany’s supply disruptions need not be quite so disruptive. ■Read more from Free Exchange, our column on economics:Does high inflation matter? (Apr 23rd)What bigger military budgets mean for the economy (Apr 16th)China has a celebrated history of policy experiments (Apr 9th)For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More

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    Vast sums of money have gone missing from pandemic stimulus programmes

    IT WAS A criminal’s paradise. In June 2020 a firm in Milan secured a €60,000 ($63,300) government loan to cope with the pandemic-induced downturn. But the business did not exist. The Italian government had in fact sent cash to the ’Ndrangheta Mafia of Calabria. The same month six French citizens swindled €12m in unemployment benefits by claiming funds for employees at 3,600 shell companies. A Texan man filed loan applications for 15 made-up firms and pocketed $24.8m in government support.As countries scale back unparalleled emergency-relief programmes there is growing interest in where the funds went. The IMF estimates that since January 2020 governments have doled out $15.5trn in non-health-care spending and loans in response to the covid-19 pandemic. The rush to support households and firms led to poor procurement, messy programmes and inadequate oversight. The best estimates of fraud, so far, are from Britain and America; other countries, where wrong doing may well have been more prevalent, lack audits tracing where the money went. In America at least 4.5% of funding under the CARES Act, the largest pandemic-stimulus bill, went to cheats. Applying that figure globally suggests that nearly $700bn could have ended up in the wrong hands.In Britain fraud and error—losses due to crime and mistaken payments—across five economic-relief schemes exceed £16bn ($21bn), roughly a tenth of the £166bn spent, according to official reports. That tally could well rise: the National Audit Office calculates that fraud from just one of the programmes, the Bounce Back Loan Scheme—whose reported losses account for a quarter of the sum—could reach £26bn, 55% of its total spending, when investigations come to a close.Spending in America was larger—and so was the waste. The Secret Service reckons $100bn has been stolen from the $2.2trn CARES Act. If pre-pandemic fraud levels were sustained, at least $87bn in unemployment insurance—which got a budgetary bump during the pandemic—would have been captured by crooks. Auditors reckon the true fraud rate is much higher.Scams and mismanagement are inevitable in programmes of such a scale. But past stimulus efforts were cleaner. In the decade since the financial crisis, investigators recovered only $57m in fraudulent funds from the American Recovery and Reinvestment Act of 2009, an $840bn stimulus package. Cheats continue to be exposed over time, but even if all cases still being audited are confirmed as criminal, the programme’s fraud rate will reach only 0.6%. Other government schemes lose less, too. The rate of total health-care fraud in America hovers at around 3%. Britain mistakenly overpaid around 1.5% of work and pension benefits a year in the decade to 2019.The covid-19 stimulus waste estimates, by contrast, are alarming—especially as the true extent of fraud could take years to uncover. But some misspending may have been unavoidable. When crisis struck economists urged governments to do whatever it took to avoid colossal damage. Speedy action did just that. America distributed stimulus cheques to 90m people in less than a month. In rich countries real disposable income per person rose by 3% in 2020. That kind of offset might not have been possible with slower, more carefully crafted policies.More scrutiny is coming. In March three dozen Republican senators demanded more transparency about how funds were spent before signing up to more pandemic-related funding. Joe Biden has appointed a chief prosecutor to take down criminals who tried to profit from the pandemic. And some justice is already being served. The French fraudsters were arrested and the Texan creator of fictional firms pleaded guilty to money-laundering. As for the Mafia in Milan? The Italian government caught on and froze their assets. ■For more expert analysis of the biggest stories in economics, business and markets, sign up to Money Talks, our weekly newsletter. More