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Title: Rubbish IT Systems Cost the US At Least $40 Billion During Covid

Link: https://it.slashdot.org/story/25/10/22/047219...

An anonymous reader quotes a report from the Financial Times: A lot of
critical financial and government infrastructure runs on Cobol. The more-than-
60-year-old mainframe coding language is embedded into payments and
transaction rails, even though there are very few Cobol-literate coders
available to maintain them. The big argument in favor of sticking with Cobol
systems is that they work. The catch is that, whenever they stop working, it
is difficult to figure out why. That's not good in a crisis, which is exactly
when they're most likely to break. Covid-19 put a lot of strain the US state
benefit systems. The ones that used Cobol for processing unemployment claims
failed spectacularly, according to a new working paper from The Atlanta Fed:
"States that used an antiquated [unemployment insurance]-benefit system
experienced a 2.8 percentage point decline in total credit and debit card
consumption relative to card consumption in states with more modern UI
benefit systems. [...] Using this estimate in a back-of-the-envelope
calculation, I find that the lack of investment in updating UI-benefit
systems in COBOL states was associated with a reduction in real GDP of at
least $40 billion (in 2019 dollars) lower during this [March 13 2020 to year-
end] period The paper uses Cobol as a proxy for old and inefficient IT, not
the direct cause of failure. Claimants faced much longer delays in the 28
states that still used Cobol in 2020, both because of the unprecedented
volume of claims and the difficulty updating systems with new eligibility
rules, author Michael Navarrete finds. [...] As an aside, one oddity of the
data is that Republican-controlled states were more likely to have replaced
old IT systems, even though their standard unemployment insurance payments
are lower on average. Why? Absolutely no idea, but here are the maps. And,
once adjusted for state politics, here's the key finding.

Read more of this story at Slashdot.

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