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Reason Magazine on Flood Insurance
Federal flood insurance transfers wealth from lower income earners to the more affluent, encourages people to build homes where they should not be built, and promotes disasters such as the one in New Orleans.

Reason magazine provides excellent background information on federal flood insurance.

All Wet by James V. DeLong
A recent study by the National Wildlife Federation, a leading environmental group, documents the high tide of insanity that is the federal flood insurance program.

Confessions of a Welfare Queen by John Stossel
ABC News reporter John Stossel writes about how he personally benefited from federal flood insurance on his beach-side home. A classic example of welfare for the affluent, as Stossel honestly reports.

End federal flood insurance. Visit DownsizeDC.org - Where you can send your message to Congress asking them to repeal the National Flood Insurance Program.

Confessions of a Welfare Queen
How rich bastards like me rip off taxpayers for millions of dollars
John Stossel

My Life as a Welfare Queen
In 1980 I built a wonderful beach house. Four bedrooms -- every room with a view of the Atlantic Ocean.

It was an absurd place to build, right on the edge of the ocean. All that stood between my house and ruin was a hundred feet of sand. My father told me: "Don't do it; it's too risky. No one should build so close to an ocean."

But I built anyway.

Why? As my eager-for-the-business architect said, "Why not? If the ocean destroys your house, the government will pay for a new one."

What? Why would the government do that? Why would it encourage people to build in such risky places? That would be insane.

But the architect was right. If the ocean took my house, Uncle Sam would pay to replace it under the National Flood Insurance Program. Since private insurers weren't dumb enough to sell cheap insurance to people who built on the edges of oceans or rivers, Congress decided the government should step in and do it. So if the ocean ate what I built, I could rebuild and rebuild again and again -- there was no limit to the number of claims on the same property in the same location -- up to a maximum of $250,000 per house per flood. And you taxpayers would pay for it.

Thanks.

I did have to pay insurance premiums, but they were dirt cheap -- mine never exceeded a few hundred dollars a year.

Why does Uncle Sam offer me cheap insurance? "It saves federal dollars," replied James Lee Witt, head of the Federal Emergency Management Agency (FEMA), when I did a 20/20 report on this boondoggle. "If this insurance wasn't here," he said, "then people would be building in those areas anyway. Then it would cost the American taxpayers more [in relief funds] if a disaster hit."

That's government logic: Since we always mindlessly use taxpayer money to bail out every idiot who takes an expensive risk, let's get some money up front by selling them insurance first.

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.

...more...

posted by Hal 9:17 PM