Why Subsidise Stupidity?

Congress hardly did anything for the last 2 years, other than accept bribes.

And, clearly, bribes are probably the only explanation to one of the very few things they did do last year: they further undermined the Free Enterprise system and, at the same time, subsidised folly and stupidity.

Here's how it works:

During the Reagan era, Congress decided that it could save money, lives and the environment by doing something simple: letting the free market discourage people from building homes and businesses in areas that would likely be wiped out by hurricanes. So, they passed a law that Reagan signed that said that the government could not subsidize building on future disaster areas by building roads, providing flood insurance, etc.

It is hardly a new idea. Ancient Myans knew not to build on the Mexican coast, and built their cities instead miles inland.

But, the last Congress was distinguished only by their corruption and stupidity, which [along with their laziness] is how they will be remembered. And, they combined the dumbest elements of all of their major focuses--destroying the environment, spending tax dollars to make their campaign contributors rich, and lining their own pockets--and decided that there are flood zones that just must be developed with taxpayer subsidies:

"The underlying principle is that every time COBRA runs up against individual interests, it's always COBRA that loses," said Steve Ellis, vice president of the watchdog group Taxpayers for Common Sense. "These are clearly areas where there's a lot of development pressure and COBRA's having an impact in denying that."

Despite anecdotes that private flood insurance is unavailable, industry officials say it is for sale, just without the government subsidies.

It's those subsidies that have put the federal system in need of a taxpayer bailout. The program owes the Treasury $20 billion. It takes in just $2 billion a year in premiums. More than a third of that — nearly $720 million a year — is now eaten up by interest on the debt.

Congress has wrestled with reforming the system by raising premiums and placing new requirements on homeowners. But lawmakers adjourned again this year without acting.
Instead, in the two COBRA bills that were passed, they added hundreds of high-risk properties and paved the way for new construction on vulnerable land.

And, the evidence stronly indicates this was based upon bribes, from the way they cherry-picked the taxpayer-funded future disaster areas:

One of the bills benefited Jekyll Island, a vacation spot off Georgia's coast that is poised for redevelopment, while the other helped a mostly undeveloped 10-lot subdivision on Florida's Gulf Coast.

Critics question whether "middle-class" homeowners are in jeopardy. For example, one Memphis, Tenn., family that owns three of the vacant lots covered by the Grayton Beach bill also owns millions of dollars in nearby property. As for Turner, besides her house she and her husband own a vacant lot about a half mile away valued at $675,000 by the county tax office.
Home prices on Jekyll Island, meanwhile, are increasingly approaching $1 million.
"In the galaxy of federal subsidies, I don't think there's one that is so pointedly subsidizing wealthy people," Houck said. "What happened to getting the government out of the hair of the private economy and letting the market work?"

Source: AP