The U.S. government, not climate change, caused massive damage from Ian

Hurricane Ian will have destroyed as much as $50 billion, one of the most expensive in history, and the media tends to blame climate change. But the real culprit is the U.S. government. 

Before 1968, only the poorest people built homes in flood plains and on the coasts in the path of hurricanes because no private company would sell them insurance. That left thousands of miles of beach front property worth little. So developers bribed Congress to create the National Flood Insurance Program in which those of us smart enough to build on dry land would subsidize the home insurance of wealthy people who wanted a mansion with nothing between them and waves. The numbers and sizes of houses on the coasts in the paths of hurricanes have exploded. As a result, NFIP finances are a mess according to the Introduction to the Introduction to Program (NFIP) published on June 30, 2022 : 

“On September 22, 2017, the NFIP borrowed the remaining $5.825 billion from the Treasury to cover claims from Hurricane Harvey, Hurricane Irma, and Hurricane Maria, reaching the NFIP’s authorized borrowing limit of $30.425 billion. On October 26, 2017, Congress cancelled $16 billion of NFIP debt, making it possible for the program to pay claims for Hurricanes Harvey, Irma, and Maria…. FEMA borrowed another $6.1 billion on November 9, 2017, to fund estimated 2017 losses, including those incurred by Hurricanes Harvey, Irma, and Maria and anticipated programmatic activities, bringing the debt up to $20.525 billion. The NFIP currently has $9.9 billion of remaining borrowing authority.”

“Currently the NFIP is paying over $1 million in interest per day on the debt accrued from past events. FEMA predicts that over the next 10 years the NFIP will pay an additional $5.8 billion in interest expenses, and will have paid $10.6 billion in total interest expenses by the end of FY2029…. The most recent report concluded that…it is not possible for the NFIP, as currently structured, to fully repay $20.525 billion in debt over the next 10 years.”

Why do corrupt politicians think taxpayers should subsidize wealthy homeowners to live in the paths of hurricanes? That is not much different from paying teenagers to drive faster while drinking. Or bribing men to jump off bridges without a bungie cord. It’s the definition of what economists call moral hazard, the idea that providing insurance against a dangerous activity increases the likelihood that people will engage in it more. 

And like most things the federal government does, it violates the Constitution, natural theology and the Bible. The Constitution limits the federal government to certain enumerated powers. Providing insurance to billionaires so they can live on the beach isn’t one of them. Natural theology insists that the government treat all citizens the same. So, if it gives money to the wealthy it needs to give the same amount to the rest of us. Instead, it taxes the majority to give to the wealthy. 

NFIP violates the Biblical command to not favor the wealthy: “You shall do no injustice in judgment; you shall not be partial to the poor nor defer to the great, but you are to judge your neighbor fairly” (Leviticus 19:15).

Will hurricane Ian bankrupt the NFIP? Not likely. Congress will merely increase the national debt by borrowing more to pay for the massive rebuilding of Florida mansions on the water. And higher interest rates will only make NFIP less solvent and require more bailouts. 

So, every time you hear someone in the media lament the damage caused by climate change, lift a glass to the corrupt politicians in the federal government who made the disaster far worse than it needed to be with the National Flood Insurance Program.

Roger McKinney is the author of Financial Bull Riding and God is a Capitalist: Markets from Moses to Marx.

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