Why government should not pay to rebuild disaster areas

As we approach the middle of "hurricane season" lets discuss the fallacy of protecting and rebuilding areas that have been hit with terrible disaster. It was only a few years ago that Hurricane Katrina all but destroyed the great city of New Orleans. No doubt the people in New Orleans were hurting and are thankful for the help Uncle Sam has given them. Allow me to discuss to you why the federal government is responsible for many of those deaths in New Orleans. It is not the typical liberal talking point such as: "George Bush does not like Black People." Recently charged felon Kayne West knows about as much about government and George Bush as I do about his rap music! I will address this from an educated point of view not an ideological ignorant point of view.

As good and kind as disaster relief and federal flood insurance sounds, it is once again an example of well intentioned policies with terrible unintended consequences. No doubt these programs help people get their feet back on the ground and their lives running again. I am not blinded to the benefits of these two programs. However, politicians typically only talk about the benefits of their programs while ignoring the costs. The costs are not as obvious and thus voters who are ignorant of economics will vote for the candidate that chooses to help them in the heat of a moment instead of studying the future consequences of those programs. When government guarantees disaster relief for people, residents have no incentive of living in an area that would be efficient (safe) for living. Meaning, when you guarantee someones security, their sense of self-responsibility deteriorates. If government did not guarantee the rebuilding of your home, many people who choose to build and live in areas that are prone to disasters such as floods and hurricanes would choose instead to live elsewhere. When government guarantees their financial security such as rebuilding their home why would they make a wise decision in living in a more safe area? In fact this policy only leads to more and more people moving into these sometimes beautiful but truly dangerous areas. This of course raises the cost of repairing these areas as many more people now live there and own homes that need rebuilding. New Orleans is under sea level but that should not scare anyone away from building there if they know that the tax payer is going to pick up their tab when the disaster comes.

About 30 years the government decided to collect some of that money by offering federal flood insurance. This way the residents pick up part of the costs. Residents are charged a few hundred dollars for their premium to insure their house that is built next to the ocean or next to rivers that flood regularly. In a pure free market these insurance premiums should cost thousands of dollars each month to truly cover the risk involved in building in those areas. That is why government provides it. If a service were efficient the private sector would usually fund it as people can make money providing that service. When government gets involved it is often because they are providing a service that no one needs or desires when charged a proper price. Since government collects trillions of dollars in taxes, it is easy for them to pick up that tab.

The fact is if government did not offer these benefits to such people, those people would not have lived in those areas. True, New Orleans would not be the exciting city that it is today. But other cities in the area would simply be bigger and offer the fun that New Orleans offers. True, many of the people living in beautiful home would not have the same great view they have while living in an elevated home on the beach. But our taxes would be much lower instead of protecting these morons who choose to live there only because they know that when that hurricane comes as it does every 5 years, they will be protected and covered. The fact is, if government did not have such a stupid policy, those poor people who were killed on that terrible day when Hurricane Katrina hit Louisiana, would not have been living there to begin with.

As Hurricane Ike closes in on Texas and other gulf region states, be reminded that although I believe that people need charity when unexpected disasters take place, having government incentivize them to live in dangerous areas by bailing them out when their home is destroyed is not a good policy when adding up the benefits and costs.