If you want to understand how the federal government has gotten our nation trillions of dollars in debt, consider the following example – and then realize that it is typical of wasteful, unaccountable federal programs that handle vast sums of taxpayer dollars.
In the coastal town of Humble, Texas, the federally funded National Flood Insurance Program shelled out $807,000 between 1977 and 1995 to repair repeated hurricane damage to a house valued at only $114,000.
You read that correctly: A government program that insures homes in high-risk coastal areas – where insurance companies sensibly will not write policies – paid for repeated storm damage that totaled more than seven times the actual value of the house!
That’s madness! Is it any wonder that ordinary insurance companies would refuse to write a policy for a home built in such a dangerous area?
We wish the house in Humble were the only one where so many federal tax dollars are being squandered, but it isn’t. The federal flood program “has coughed up more than $8 billion during the past 15 years for more than 150,000 troubled properties that have filed multiple claims for storm damage,” the Houston Chronicle reported. In fact, 25 percent to 30 percent of the claims are paid to only 1 percent of the covered properties – precisely because of their repeated losses in big storms.
The program is going into the red by $200 million each year, and it now owes the U.S. government more than $18 billion – money that the government admits the program probably won’t be able to repay. That means taxpayers are on the hook. Why does Congress continue to fund this outrage, which has been in place since 1968?
We do not say that homeowners now covered by the government program should suddenly lose coverage. But at a minimum, the law should be rewritten so that if they rebuild in the same place after their homes are destroyed by a hurricane, no government insurance will be available for any future losses.
The American people should not bear the burden of the irresponsibility of those who repeatedly build in such dangerous locations.