๐๏ธ #Rubbish IT systems ๐ฏ cost the US at least $40bn during #Covid: study FINDS.. THAT THE USA IS NOW 6 DECADES BEHIND CURRENT TECHNOLOGIES NOT 3! โป๏ธ
๐๏ธ HERE IS PROOF! ๐ฌ The Power ๐ is in the #Software Not the #Hardware!
A lot of #critical financial and government infrastructure runs on #Cobol. The #more_than_60_year_old #mainframe #coding_language (6 #DECADES BTW) is embedded into #payments??? and #transaction_rails, even though there are very #few #Cobol_literate #coders available to maintain them.
https://www.ft.com/content/7610a755-27e3-4792-a337-27d9b301000b
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 favour of sticking with Cobol systems is that they work. The catch is that, whenever they stop working, it is difficult to figure out why. Thatโs not good in a crisis, which is exactly when theyโre 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. [โ.โ.โ.โ]
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.
Untangling decades of spaghetti code in a hurry often means bringing back retirees at consultant rates, begging for volunteers, or calling on the Cobol Cowboys, a group of veteran coders who bill themselves as IT first responders. Ageing Cobol systems also tend to lack automation so, even when they work, delays lengthen when the caseload rises. Wisconsin, for example, was reportedly taking at least two months to process unemployment claims filed in March 2020.
The later a claimant is paid, the more likely they will save the money rather than spend. Each dollarโs economic benefit therefore remained relatively weaker in Cobol-powered states even after delayed payments had been made.
Having legacy systems in place also helped convince the government to keep things simple and offer a flat-rate extra of $600 a week in all states. Means-testing, or using a percentage of each stateโs regular unemployment insurance, would have been too complicated to apply quickly. The result was โthe median UI recipient receiving more from UI benefits than from their previous employerโ, Navarrete says.
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:
https://www.ft.com/content/7610a755-27e3-4792-a337-27d9b301000b
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