Who Pays the Piper?

While there are Global Warming deniers, there is no question that the cost of recent weather related disasters in life and treasure is staggering. Thousands dead, billions for Katrina, Sandy far surpassing that tragedy. Wildfires devour paradise and the homes within, farmers’ efforts come to naught, streams, rivers, lakes and reservoirs draining, and we are told this is but the beginning.

It is going to take billions to repair and get ready for what’s coming next. We need to think, however, about where the line between public and private responsibility lies. If you wish to live at the ocean’s edge, in the midst of a towering forest, or any other attractive location threatened by nature out of control, that is certainly up to you. The question of responsibility enters when your dream goes up in smoke, or is smashed by wind or waves. Should you wish to repair or replace, who pays?

In many cases the answer is the taxpayers. The federal government set up the National Flood Insurance Program for folks who live in flood prone areas like those devastated by Sandy. While the insurance is sold by private companies, the risk is carried by the taxpayers. We are looking at more than $500 billion just in our coastal flood plains and more than a trillion at risk nationwide. To put that in perspective, National Flood Insurance is second in size only to Social Security when it comes to our government’s potential liability.

We are in the flood insurance business because no commercial insurer in their right mind will touch it. There are multimillion-dollar homes on our beaches that we ordinary folk have rebuilt several times. That’s not what we pay taxes for. It makes no sense ethically to expect middle class and lower income Americans to insure homes that they can barely dream of owning.

Among the devastated communities in New York and New Jersey are several gated locales. Communities that prior to Sandy were protected by razor wire and checkpoints manned by heavily armed guards; communities that maintain their own streets, sewers, and other such necessities to justify excluding the common folk. Now some of them are lobbying to have their infrastructure replaced by the taxpayers. 

There is every reason to believe that the increasingly severe conditions of the last several years will continue to worsen. It’s past time for the taxpayers to get out of the flood insurance business. We must, of course, honor the commitments now on the books. If those folks choose to rebuild in the flood plains that’s up to them, but they should not plan on their fellow Americans underwriting their folly.

While they are not covered by the Federal Flood Insurance Program, those whose homes are at risk in wildfire prone areas should expect no help from those who could never afford to live in such exotic locales. The Federal Flood Insurance Program should be allowed to expire; those with policies should be advised that they will not be renewed. We have better things to do with our taxes.