"The hurricane devastation is severe.
What should the federal government do?
Give us lots of money, say many in the wounded states.
Rep. Sheila Jackson Lee (D-Texas) demanded “about $150 billion” -- just for Texas.
So far, Congress has agreed to $15 billion in hurricane relief.
But more will come.
Few Americans will object.
The House vote for the first $7.9 billion was 419-3.
But let’s take a breath.
Why is rebuilding the federal government’s responsibility?
This idea that the federal government must lead in rebuilding is only a recent phenomenon, says the Cato institute’s Chris Edwards.
...But many government handouts cause more problems than they solve.
The Federal Emergency Management Agency says it will “rush recovery money” to National Flood Insurance Program policyholders.
That may sound like a good thing, but it creates incentives that will cause more problems during the next flood.
I know that because I was one of those policyholders once.
I built a house on the edge of the ocean.
Without National Flood Insurance’s encouragement, I would never have built there.
But the Flood Insurance Program offers cheap insurance, so I did build.
- A few years later, the ocean took my first floor.
Government paid for me to rebuild.
- Later, my whole house washed away and government reimbursed me again.
I won’t rip you off again, but others will.
Millions of people hold federal flood insurance.
The program was $25 billion in debt even before this year’s hurricanes..."