Should we as taxpayers foot the bill for New Orleans?
on October 26th, 2006 at 3:46 am(USAToday.com) The definition of insanity, according to Benjamin Franklin, is doing the same thing over and over and expecting different results.Ben, welcome to New Orleans.
(New Orleans: How will these hurricane-hit homes be rebuilt? Will they? / By Alex Brandon, AP)
Nearly three-quarters of 14,534 New Orleanians who’ve applied for federal grants say they’ll rebuild their Hurricane Katrina-damaged homes in flood areas even though city restrictions are unlikely to protect their homes if the levees fail again, USA TODAY’s Anne Rochell Konigsmark reported last week.
The latest plan calls for the Louisiana Recovery Authority to dole out grants of up to $150,000 to cover uninsured losses, which residents can use to rebuild or relocate. To qualify, homeowners in and around the city must raise their homes by at least 3 feet and purchase federal flood insurance.
So let’s see. Federal taxpayers will be subsidizing reconstruction in flood areas, underwriting the insurance on those homes and will no doubt have to bail out the flood insurance program if the homes get wiped out again. The program collected only $2.2 billion last year in premiums but will pay out more than $20 billion in Katrina claims, leaving taxpayers on the hook for the rest. Worse, the program encourages development in areas subject to flooding not just in New Orleans, but everywhere by offering insurance at bargain rates in areas where private insurers fear to tread. That increases the population in vulnerable areas, leading to more costly disasters.
It is an absurd use of taxpayers’ money, to which New Orleans is adding an expensive new twist. (more…)
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I’m a little mixed on this issue. While I agree that it is a waste of TAXPAYER dollars (Notice the distinction here. Private funds should be used FIRST) to go to folks that are going to rebuild in this disaster zone, unfortunately it would be an inconsistent move for the government. Here in the western half of the United States, folks regularly rebuild in fire and earthquake zones with government assistance. Government opened Pandora’s box involving itself in the disaster relief business in my opinion.
This document composed by the CATO does a good job articulating what I suggested earlier.
Should Society Deal with the Earthquake Problem?
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