Ron Paul Explains Why "Government 'Aid' Only Makes Disasters Worse"

Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

Texans affected by Hurricane Harvey, including my family and me, appreciate the outpouring of support from across the country. President Donald Trump has even pledged to donate one million dollars to relief efforts. These private donations will be much more valuable than the as much as 100 billion dollars the federal government is expected to spend on relief and recovery.

Federal disaster assistance hinders effective recovery efforts, while federal insurance subsidies increase the damage caused by natural disasters.

Federal disaster aid has existed since the early years of the republic. In fact, it was a payment to disaster victims that inspired Davy Crockett’s “Not Yours to Give” speech. However, the early federal role was largely limited to sending checks. The federal government did not become involved in managing disaster relief and recovery until the 20th century. America did not even have a federal agency dedicated solely to disaster relief until 1979, when President Jimmy Carter created the Federal Emergency Management Agency (FEMA) by executive order. Yet, Americans somehow managed to rebuild after natural disasters before 1979. For example, the people of Galveston, Texas successfully rebuilt the city following a major hurricane that destroyed the city in 1900.

FEMA’s well-documented inefficiencies are the inevitable result of centralizing control over something as complex as disaster recovery in a federal bureaucracy.

When I served in Congress, I regularly voted against federal disaster aid for my district. After the votes, I would hear from angry constituents, many of whom would later tell me that after dealing with FEMA they agreed that Texas would be better off without federal “help.”

Following natural disasters, individuals who attempt to return to their own property - much less try to repair the damage - without government permission can be arrested and thrown in jail.

Federal, state, and local officials often hinder or even stop voluntary rescue and relief efforts.

FEMA is not the only counterproductive disaster assistance program.

The National Flood Insurance Program was created to provide government-backed insurance for properties that could not obtain private insurance on their own. By overruling the market’s verdict that these properties should not be insured, federal flood insurance encourages construction in flood-prone areas, thus increasing the damage caused by flooding.

Just as payroll taxes are unable to fully fund Social Security and Medicare, flood insurance premiums are unable to fund the costs of flood insurance. Federal flood insurance was almost $25 billion in the red before Hurricane Harvey. Congress will no doubt appropriate funding to pay all flood insurance claims, thus increasing the national debt. This in turn will cause the Federal Reserve to print more money to monetize that debt, thus hastening the arrival of the fiscal hurricane that will devastate the US economy. Yet, there is little talk of offsetting any of the costs of hurricane relief with spending cuts!

Congress should start phasing out the federal flood insurance program by forbidding the issuance of new flood insurance policies. It should also begin reducing federal spending on disaster assistance. Instead, costs associated with disaster recovery should be made 100-percent tax-deductible. Those who suffered the worst should be completely exempted from all federal tax liability for at least two years. Tax-free savings accounts could also help individuals save money to help them bear the costs of a natural disaster.

The outpouring of private giving and volunteer relief efforts we have witnessed over the past week shows that the American people can effectively respond to natural disasters if the government would get out of their way.

Comments

stacking12321 auricle Tue, 09/05/2017 - 00:16 Permalink

Government aid creates moral hazard.

If Uncle Sam is going to come along and make things all better, then why NOT build your house where hurricanes, tornados, earthquakes, floods, or volcanos might destroy it?

Those who choose to be more careuful and responsible will have to pay for risk-taking behavior of others.

This is true of health insurance as well.

In reply to by auricle

Paul Kersey sincerely_yours Mon, 09/04/2017 - 23:15 Permalink

"Federal flood insurance was almost $25 billion in the red before Hurricane Harvey."

And yet the US Government enriches war profiteers by spending trillions of dollars blowing up the Middle East, the rebuilding it and then blowing it up again. Better to help out Americans who have had their homes destroyed.

"Instead, costs associated with disaster recovery should be made 100-percent tax-deductible."

First of all, for income, commercial and industrial property owners (corporate rentiers), it's already 100% tax deductible. For the 78% of Americans, who live paycheck to paycheck and don't have the money to put new tires on their old vehicles, making disaster recovery costs tax deductible won't do shit for them.

Back in the day, I would have voted for Ron Paul. Today, I can see that he doesn't get out among the people enough to know how brokedick most Americans are.

In reply to by sincerely_yours

OverTheHedge American Psycho Tue, 09/05/2017 - 01:18 Permalink

What is government wellfare but enforced charity? The assumption is that you are too stupid, and too parsimonious, to know how to donate properly, so the government will take your money and  do it for you, with the threat of violence if you don't comply. It's an interesting moral standpoint.The idea that flood insurance should be made illegal is odd - how about private insurers offering whatever cover they deem appropriate, at whatever price they deem appropriate, and if the claims exceed the premiums, then let the insurer go gloriously bankrupt. In other words, get the government out of the way, just as the article requests,. It's slightly schizophrenic in that regard.

In reply to by American Psycho

StarGate MozartIII Tue, 09/05/2017 - 00:45 Permalink

In the govt which is filled with rules upon rules, they have a saying for getting things done:

"Proceed until apprehended"

Which means, if you have a good idea, are skilled, then do it. There is always someone in govt to tell you that you can't do it. Just smile and say I didn't know, thank you for the information.

After they leave, get back to it.
When it works, no one will remember the silly rule.
In fact, they will suddenly think it was their idea.

In reply to by MozartIII

takeaction TeamDepends Tue, 09/05/2017 - 03:58 Permalink

Oh that fucking Ron Paul guy.....always fucking talking and talking since the 80's....and that son of a bitch always spews the fucking truth.....Ron...and Rand...I donated $2300 to each of you one year......What happened right after that?  I got audited.  Mother Fuckers.....If you are reading this.......YOU two...Father and SON...are the best of the best...and I thank you for standing up for people like me.    

In reply to by TeamDepends

Bopper09 Mon, 09/04/2017 - 22:47 Permalink

The best idea I've heard.  Anyone in need of financial help is exempt from income tax for 2-3 years. By the way, what are the 'administration costs' for the red cross?  My guess around 80%?  How many foundations are gong to make a killing over this.

FoggyWorld political_proxy (not verified) Tue, 09/05/2017 - 05:03 Permalink

Samaritan's Purse is run opening and responsibly.   The major thing they do so well is organize volunteers for the rebuilding and serious work that needs to be done.  They send actual hands on people to repair homes and they started early on to reach out all over the country to organize and manage those folks who are able to spend the post emergency time needed.   They also provide food and if needed, would bring in medical help because that standing water is just asking for a health care problem to surface.

In reply to by political_proxy (not verified)

jin187 Bopper09 Tue, 09/05/2017 - 05:35 Permalink

It wouldn't work. The most badly affected people would be those too poor, or too disabled to evacuate. They already pay little to no taxes. Three years worth of taxes for them probably doesn't even add up to a down payment on a new car.

By the same token, those who pay enough in taxes for this to make a serious dent in their recovery costs likely already have insurance, savings, and access to significant lines of credit. Even if it does help, it just helps them rebuild wealth next year, and the years to come, not their homes right now.

In reply to by Bopper09

Bopper09 Mon, 09/04/2017 - 22:47 Permalink

The best idea I've heard.  Anyone in need of financial help is exempt from income tax for 2-3 years. By the way, what are the 'administration costs' for the red cross?  My guess around 80%?  How many foundations are gong to make a killing over this.

FoggyWorld vollderlerby Tue, 09/05/2017 - 04:57 Permalink

There is a problem with this.  Last time I checked there were four different petitions saying just about the same thing and only if added together did it seem as of the total number would reach 100,000.  Doubt if the WH will notice or bother to merge the signatures so if you want to sign, go through the other petitions open and hit every one of them.

In reply to by vollderlerby

Bopper09 Mon, 09/04/2017 - 22:48 Permalink

The best idea I've heard.  Anyone in need of financial help is exempt from income tax for 2-3 years. By the way, what are the 'administration costs' for the red cross?  My guess around 80%?  How many foundations are gong to make a killing over this.

ebworthen Tue, 09/05/2017 - 01:19 Permalink

Ron Paul is right, however, the hive mind is far past this.The Pres. has to show up serving food and "caring".  The figurehead of .gov has to pay alms or it is curtains.Not "Ask not what your country can do for you, but what you can do for your country" anymore; that is so old school! 

MuffDiver69 Mon, 09/04/2017 - 23:27 Permalink

I agree with this idiot many times, but he needs a beating on this one..Yes we know the government is wasteful you arrogant prick, but this is one of the few places IF you get something then take it...Many of these folks pay all sorts of taxes that they could have pocketed and invested, then of course they wouldn't need much help, but cut the sanctimonious bullshit like you're pompous retarded son...Jerk

FoggyWorld MuffDiver69 Tue, 09/05/2017 - 04:49 Permalink

But the sad part is that only 20% of the people of Houston had flood insurance.  FEMA's money does NOT go to individual homeowners but goes to the State, county and local politicians who spend it on infrastructure projects that they chose.  Worst of all, FEMA never audits them.Not sure if it was a fluke of the Obama administration, but a huge chunk of the federal money sent was for Section 8 housing and not many, if any, of those hit by Sandy even qualified for low income housing. 

In reply to by MuffDiver69

Jasher Mon, 09/04/2017 - 23:47 Permalink

21 Moreover thou shalt provide out of all the people able men, such as fear God, men of truth, hating covetousness; and place such over them, to be rulers of thousands, and rulers of hundreds, rulers of fifties, and rulers of tens: 22 And let them judge the people at all seasons: and it shall be, that every great matter they shall bring unto thee, but every small matter they shall judge: so shall it be easier for thyself, and they shall bear the burden with thee.https://www.biblegateway.com/passage/?search=Exodus+18&version=KJV