James Bovard made some salient points just after Katrina in Uncle Sam’s Flood Machine.
“The National Flood Insurance Program (NFIP) is the Federal Emergency Management Agency’s crown jewel. Unfortunately, the heavily subsidized insurance bribes people to scorn common sense, damages the environment, and creates staggering liabilities for taxpayers. Federal flood insurance illustrates how selling at a loss can be politically profitable.
The primary effect of federal flood insurance is that far more property is now damaged by floods than would have occurred if the insurance had not made it possible to build in flood-prone areas. The Long Island Regional Planning Board in 1989 complained that federal flood insurance “in effect encourages a cycle of repeated flood losses and policy claims.” And, especially in places like Long Island, the program underwrites the vacation homes of the wealthy.”
Now that Sandy made her presence known, many of those aforementioned Long Island properties were washed into the sea. Would anyone believe that federal guarantees have any premium correlation to the actual costs of such disasters? The current disconnect between subsidized costs for NFIP flood insurance and the enormous expense for reconstruction is beyond imagination.
“Should a big storm wipe out half the coast, you’ll cover our losses — up to a quarter-million dollars. Thanks — we appreciate it — but what a dumb policy.
The insurance premiums were a bargain. The most I ever paid was a few hundred dollars. Federal actuaries say if the insurance were realistically priced, it would cost thousands of dollars. Why should the government guarantee water’s-edge insurance? Why should the government be in this business at all?”
“The bottom line is that the taxpayers subsidize the development of property located in known floodplains. And that raises the question of whether that subsidy is good public policy, or whether the whole approach to flood emergencies should be changed. Would we all be better off if we ended the NFIP and instead provided short-term subsidies to floodplain property owners to move out of the danger zone, avoiding the inevitable loss of property and lives that occur so predictably along the nation’s waterways?At the very least, it seems that FEMA should end subsidizing the NFIP premiums for any insured property owners. And it may be a good idea for the states (which control land use) to prohibit construction within floodplains, or require any owner of property located in a floodplain to carry insurance to reimburse public agencies for emergency services when floods do occur.”
Disasters are part of life. There is no warranted absolution from calamites. Insurance that is fairly priced, and rigidly administrated is a system that has provided relief from great suffering and pain. Nevertheless, the business of insurance should be a private contract among willing participants.
If the cost to insure is too high, just maybe the economics of ownership is too steep to continue to support the lifestyle.
“FEMA’s coffers are nearly full because the storm struck at the beginning of the fiscal year, which started Oct. 1.
On top of more than $1 billion left over in the Disaster Relief Fund from last year, Congress has appropriated $7.1 billion for fiscal 2013. President Obama’s decision to make disaster declarations in New York and New Jersey — in addition to emergency declarations in eight other states and the District of Columbia — allows local officials to access those funds immediately.”
Disaster relief can be compassionate and supportive. Even so, the practice of subsidized federal flood insurance only encourages the extent and degree of future disasters. Lacking common sense is a national condition. Building on high ground is the prudent course for action.
SARTRE is the pen name of James Hall, a reformed, former political operative. This pundit’s formal instruction in History, Philosophy and Political Science served as training for activism, on the staff of several politicians and in many campaigns. A believer in authentic Public Service, independent business interests were pursued in the private sector. As a small business owner and entrepreneur, several successful ventures expanded opportunities for customers and employees. Speculation in markets, and international business investments, allowed for extensive travel and a world view for commerce. He is retired and lives with his wife in a rural community. “Populism” best describes the approach to SARTRE’s perspective on Politics. Realities, suggest that American Values can be restored with an appreciation of “Pragmatic Anarchism.” Reforms will require an Existential approach. “Ideas Move the World,” and SARTRE’S intent is to stir the conscience of those who desire to bring back a common sense, moral and traditional value culture for America. Not seeking fame nor fortune, SARTRE’s only goal is to ask the questions that few will dare … Having refused the invites of an academic career because of the hypocrisy of elite’s, the search for TRUTH is the challenge that is made to all readers. It starts within yourself and is achieved only with your sincere desire to face Reality. So who is SARTRE? He is really an ordinary man just like you, who invites you to join in on this journey. http://batr.org