As Turkey is digging out from a disastrous 7.4 magnitude earthquake,
here at home, various state congressional delegations are lining up to
fight a proposal from Federal Emergency Management Authority Director
James Lee Witt that would require state and local governments to insure
public buildings against earthquakes and other natural disasters to be
eligible for federal disaster aid.
Natural disasters are a fact of life. Yet when one strikes here in
this country, everyone is surprised and few are prepared. It makes
perfectly good sense for the federal government to require state and
local governments to insure public buildings for natural disasters or to
put aside 5 percent of the value of each building in a dedicated fund,
if the federal government is going to be responsible for picking up the
pieces. The question Witt is asking is, "Why should state and local
governments be able to come knocking on the federal government's door in
a crisis when they have made little or no preparations for the
inevitable?" It seems that no one has ever asked that question before.
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Earthquakes are the major problem in California, hurricanes on the
East Coast, tornadoes in the Plains states, and flooding along the
Mississippi and other low-lying areas. The reaction from our local,
state and Washington representatives is to be expected. "You can't
expect state and local communities to carry this kind of insurance.
It's too expensive! Besides, most insurance companies don't offer
disaster insurance for public buildings." That's easy to understand.
Since federal disaster assistance has become commonplace there simply is
Insurance is expensive. It costs Americans a lot to insure their
homes and places of business against the 17 perils that standard
insurance covers. Disaster insurance is even more expensive. That's
why most private property owners carefully evaluate how much exposure
they can handle and opt for policies with large deductibles. It's a
judgement call, but what in this life isn't? You pay your money or you
take your chances. If you are prudent and a disaster strikes, you keep
your investment. If you aren't and a disaster strikes, you must be
prepared to lose it.
When disasters occur, charity plays an important role in bringing
aid, comfort and financial assistance to the victims. However, when the
federal government gets involved in disaster relief, or even the
insurance game, taxpayers come out on the short end of the stick.
Insurance is a way of pooling risks; however, it also is a way of
keeping people who can't afford to take risks out of high-risk areas.
In a normal market, if you can't afford either the high insurance
premiums or the cost of rebuilding, you do not locate on a cliff,
beachfront or in a flood-prone area. The government's flood insurance
program is a good example of a man-made disaster. In addition to
setting premiums too low and having to be constantly bailed out by
taxpayers, it encourages people to keep rebuilding in these areas.
Also, since the government continually steps in to bail out the
uninsured, there is little incentive to buy this protection, even at
bargain basement rates.
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Like floods, droughts, too, are a natural occurrence. Why should
farmers in the Southwest, who can't grow anything without irrigation
systems, pick up the tab for farmers in other parts of the country who
gamble that there will be enough rain to allow them to get by without
Large earthquakes, tornadoes and hurricanes cut a wide path.
However, we all would come out ahead if local governments took care of
their own problems without involving Washington. If the truth were
known, FEMA is a luxury the people of this country simply cannot
afford. When the federal government gets involved in local problems,
even those that are a result of natural disasters, the money used to
rebuild goes through several layers of unnecessary bureaucracy. It
would be so much cheaper to pay this bill closer to home.
It is interesting to see so many of our elected congressional
representatives who favor states' rights banding together to ensure
their state's right to feed at the public disaster trough in
Washington. Since those on the left and the right are united in their
opposition to Mr. Witt's call for state and local governments to insure
their public buildings, they probably will succeed in derailing his
proposal. Meanwhile, they are going to try to convince us that this is
a good thing. No additional outlays will be required by the states, and
when those disasters strike, Washington can be expected to go right on
picking up the tab, even though the tab will be a lot higher than
necessary. When will we ever learn?