Another Hurricane has swept over the lowlands of Louisiana . . . again. The levees are being tested . . . again. More than $14 billion was spent on repairing them after the devastating effects of Katrina in 2005. After the floods that destroyed thousands of homes, people moved back to the below sea level area.
Government insurance has made it easier for people to take risks with other people’s money. For example, standard homeowners’ insurance policies do not cover losses due to floods. Many (most? all?) coastal cites participate in the National Flood Insurance Program, which makes it possible for property owners to obtain federally backed flood insurance at dirt cheap prices.
If there is minimal risk of loss because someone else is going to pay for the damage caused by a hurricane, then there is little property risk to build in a hazardous area prone to flooding and storm damage. If people could not get insurance, or insurance was too high, more people would live inland to avoid the risks.
John Stossel writes:
“The insurance, of course, has encouraged more people to build on the edges of rivers and oceans. The National Flood Insurance Program is currently the biggest property insurance writer in the United States, putting taxpayers on the hook for more than $640 billion in property. Subsidized insurance goes to movie stars in Malibu, to rich people in Kennebunkport (where the Bush family has its vacation compound), to rich people in Hyannis (where the Kennedy family has its), and to all sorts of people like me who ought to be paying our own way.”1
Consider New Orleans. This is a bellow-sea-level city. Homes are built next to precarious looking levees. I have a question: Why should I, a taxpayer, have to pay for people to live in the biggest flood zone in the United States? Even the dead have better sense. They’re buried above ground.
Attempts to solve problems by declaring war on them by the national government has been an ongoing theme in politics since the mid-1960s. Flood insurance is just one program that was designed to help people. In reality, it only increased our costs.
Charles Murray wrote in his book Losing Ground that “Overall, civilian social welfare costs increased by twenty times from 1950 to 1980, in constant dollars. During the same period, the United States population increased by half.” When the Food Stamp Program began in 1965, 424,000 people participated in the program (that’s less than 9,000 people per state, a manageable number for private welfare agencies to handle).
At the end of Lyndon Johnson’s presidency in 1968, participation increased to 2.2 million. The number doubled during the first two years of Richard Nixon’s presidency (1969–70). By the end of Nixon’s first term in 1972, the number of food stamp recipients had increased five-fold. “By 1980, more than twenty-one million people were receiving food stamps, fifty times more people than were covered during the Johnson presidency.”2
In the end, it’s not about helping people, whether it’s subsidized flood insurance, food stamps, low-cost student loans, keeping kids on their parents’ insurance until they’re 26, government-backed mortgages, it’s about creating a permanent dependent class of voters who will vote for more government and more power that benefits them at the expense of other people.