Sandy Relief Funding: ANOTHER SCAM
The Market Ticker ® - Commentary on The Capital Markets
Posted 2013-01-04 10:15
by Karl Denninger
in Federal Government
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Sandy Relief Funding: ANOTHER SCAM
 

This infuriates me.

The House was treated to an outrageous display of puerile and faux rage just before adjournment when Speaker Boehner refused to consider Hurricane Sandy "relief bills" before adjourning the Congress and leaving it to the new session.

Today, Congress is beginning to look at these bills again.

Let's cut the crap and get right to the bottom line, and then I want to direct a particular amount of ire at Rep. King, who called for people stop donating money to Republicans over Boehner's refusal to rubber-stamp utter and complete crap.

There are two parts to the Sandy issue.  The first one is easy -- about $8 billion in appropriations that will fund NFIP insurance policies already written and paid in, for which people now want to collect.

These are entities who bought insurance and then suffered a loss.  There are complaints about NFIP not charging enough money for that insurance, but that's not the fault of the people who bought the policy -- that's Congressional malfeasance.  Congress wrote an actual contract, not a political promise, now pay the f#$k up.  Period. 

If you need a place to find the money, take it out of Defense.  Yes, I'm serious.  This crap about adding to the deficit is unethical and outrageous.  Cut something by $8 billion and pay the damn policyholders.  End of discussion.

If you tried to pull this crap in private industry you would go to prison, and we ought to imprison every member of Congress who votes to either (1) not fund this or (2) deficit fund it.  Congress spent the damn money somewhere else.  Go to the "somewhere else" and recover it.  This is fraud and any Congressperson who stands for fraud deserves a 20 year date with Bubba. 

End of discussion.

But -- the second half of this so-called "relief", some $60 billion, is only about half going to Sandy "victims."  And I use "victims" in quotes because those who decided not to insure against these losses have zero right to claim anything from the government at all.

These losses are insurable -- but firms, individuals and municipalities and states don't like the cost of that insurance, so they didn't buy it.  This was not a situation similar to Katrina where the ACOE was involved in allegedly providing "protection" and failed to do their job.  In this case private and public entities decided not to syndicate their insurance needs and ran "naked" but now want to be bailed out ex-post-facto. 

NO must be the answer.

It would be easy enough to stop there, but in Washington tradition it's not.  See, of the $60 billion nearly half has exactly nothing to do with Sandy.  There are hundreds of millions in allocations for programs in Alaska, for example, which has exactly nothing to do with the storm.  Then there's over $20 billion for various liberal "advocacy" programs which have nothing to do with the storm either.

That entire bill is a gross and outrageous fraud.  Any congressperson who spoke for previously or who speaks for or votes for now such an outrage deserves to be deposed from office and imprisoned for public fraud.

This crap must stop.  If you want to know why we're running a $1.2+ trillion deficit every damned year for the last four, this is the reason.  Congress continually brings to the floor bills that are outrageous public frauds in both accounting and spending generally, mis-titles them on purpose, lards them up to hand money to favored people who bribe them with campaign donations and then lies the public about what they're paying for and spending the money on.

Every one of those jackasses who does this, including especially representatives like Mr. King, deserves 20 years in pound-you-in-the-ass Federal Prison.  Period.

Oh, and this bill must not pass.

'Nuff said.

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User Info Sandy Relief Funding: ANOTHER SCAM in forum [Market-Ticker]
Raven397
Posts: 5
Incept: 2012-10-27

Cincinnati OH
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another infuriating thing, it seems, is the imbecilic silence of the House leadership on the nature of the pork added to the bill. Boehner, Cantor, Ryan, et al. should be setting the facts out on a daily basis instead of standing there mutely with their thumbs where the sun don't shine.
Jal
Posts: 520
Incept: 2009-03-25

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Sandy Relief Funding: ANOTHER SCAM

Cut the food stamp program then the scammers can have caviar on their crackers.
Eaglewwit
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Green
SoCal
Banned
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How much of the money was going to go to pay huge overtime checks to the so called public servants. A natural disaster might as well be called a natural windfall to some of these people. To me a disaster like that should be about helping your neighbors, not cashing in.
Winstonsmith2009
Posts: 1061
Incept: 2009-08-05

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Fund NFIP? Hell, end it. Why should I have to pay for someone else's beach property?:

Lunacy of FEMA Hurricane Insurance Subsidy

http://theintelhub.com/2012/11/07/lunacy....
Randy123
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Green
Earth
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Now now. Remember not everyone lives on the beach. Flood plains are lots of places.

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New Normal. Same As The Old Awful.
Genesis
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NFIP is a voluntary insurance program and provided that the premiums are set at a level that is actuarially sound I have no problem with it.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Randy123
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No ****. I pay 2000 a year and I don't even have contents covered. The people bitching about that program haven't a clue.

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China is the Enemy. Wake Up.

New Normal. Same As The Old Awful.
Drench
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Note well that the Republican House members are doing that thing again where most of those voting No waited until the bill had enough votes to pass so they could make sure they didn't need to vote Yes instead.

Peterm99
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Genesis wrote..
. . . premiums are set at a level that is actuarially sound . . .
I don't remember where, but quite a few years ago I read an article that claimed that the reason for the NFIP was that most people would not be able to afford "actuarially sound" premiums which would be charged by the private sector, and thus a gov't subsidized program was instituted.

Is that a fair characterization of the NFIP?

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". . . the Constitution has died, the economy welters in irreversible decline, we have perpetual war, all power lies in the hands of the executive, the police are supreme, and a surveillance beyond Orwell’s imaginings falls into place." - Fred Reed
Truthseeker
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That is a fair description, Peter, although I can tell you from personal experience that the program was tightened up a bit in the late '90s. There was a time when policy holders could literally expect a check for anything wrecked by a flooded basement, but that practice was ended when they ceased to offer any content insurance.

Now, it's only structural damage that is insured, but in many flood plains, an actuarially sound policy from a private insurer would either be unavailable, or a good bit more expensive.

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"...But people better realize that the worst-case scenario could actually happen.9/11 happened. This can happen. An economic 9/11, the likes of which we've never seen." Gerald Celente
Genesis
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No.

The thing is this -- most people should buy flood insurance. If you're not in a special hazard zone it's damn cheap, and floods DO happen outside of special hazard zones. When they do they're catastrophic in terms of damage.

In special hazard zones the premiums are EXPENSIVE. But again, worth it -- if you have a "one in 100 year" risk, and pay $2,000 for $200k of coverage, where's the beef?

Second, the amount of coverage you can buy as a homeowner is capped. If you have a million dollar house, tough titties -- you can't buy that much coverage. But if you have a modest house you CAN buy enough coverage for both structure and contents. It definitely DOES NOT bail out rich people for this reason.

Override coverage is available from Lloyds but it's ******ned expensive (and should be.)

What goes with this is that you can't get a mortgage if you're in a risk zone without this coverage -- nobody will write a loan without it, and not just government-backed mortgages either.

If the price in special hazard zones is too low then raise it to where it's not. The price in non-special-hazard zones is IMHO reasonable; it's a couple hundred bucks (really) for a couple hundred grand of coverage. Outside of special hazard zones this is probably actuarially sound. In addition existing policies are grandfathered when zoning changes (as they should be) but new policies are not.

For example, my house is grandfathered as I was over base flood elevation when I bought the house. If I sell it the new buyer won't be grandfathered, as they increased the base elevation after Ivan. BUT -- I had coverage and didn't flood, so in this case despite the increase in the margin the FEMA maps reflect over reality, the fact remains that I shouldn't get rammed PROSPECTIVELY for a loss that didn't happen to this property. In other words FOR THIS PROPERTY the maps are fine and I'm protected as long as I stay here and keep the coverage. This is how it should be.

Finally, there are two other provisions in the NFIP which are good and would never be able to be imposed without government regulation -- you can only claim twice (ever) for a given property AND if you are more than 50% damaged you must rebuild to whatever the new base flood elevation is in your location or you can't renew. So over time where the base elevations prove to be wrong this is corrected and those who get damaged as a consequence of the base level being wrong (which the GOVERNMENT sets and then gets incorporated into zoning laws) are (1) protected from the GOVERNMENT ****up but (2) must rebuild at a level that FIXES IT to continue coverage.

I think the program is fine. It may need a higher premium level for special hazard areas but in general it's true insurance and it also is national, which cuts the bull**** that private companies pull with "pup companies" that write in a small area and then are intentionally bankrupted when a big loss happens, horse****ing everyone and violating the entire premise of insurance (that is, a small payment spread over a large population where most people lose, but when you have a loss you get paid.)

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Az
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Dosen't this rhyme with AIG, subprime, Fannie/Freddy, and in a few years it will re-rhyme with healthcare.

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Wood911
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I'm not involved in NFIP but in 2010 was hit by a tornado. FEMA showed up about 2 weeks after the storm and asked one question, if I had insurance. When I told them I did they told me they were just helping uninsured people! FEMA is just another welfare program for people who make bad decisions.
Randy123
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True enough on FEMA but if they do give you something, you are required by law to obtain insurance going forwards...by the way the most FEMA will give any one individual is about 38k and that is only if it was your primary residence.

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China is the Enemy. Wake Up.

New Normal. Same As The Old Awful.
Genesis
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FEMA is ****ed in the head; the amount of waste and fraud is unbelievable.

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
Agau
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FEMA are SCUM!!
Inline
Np_complete
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Near Corner of P & NP
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The entire US government has evolved into a huge "moral hazard" support system.

http://en.wikipedia.org/wiki/Moral_hazar....

Almost every single stupid decision people make in life is supported/subsidized/rewarded by the government in the name of "fairness" or "compassion".

TBTF? Not to worry, bad investments are backed by government: Socialize losses, privatize gains.

Unemployed? No need to work anyway. The FSA is ensured of free/subsidized food, housing, health, phones, heating, electricity, etc.

it...just...never...stops.

The only thing that will change the situation is to make bad decisions PAINFUL.

Tesla
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State of Disbelief
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Anybody ever see a balance sheet on NFIP ?

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"Even a dog knows the difference between being stumbled over and being kicked." -Justice Oliver Wendell Holmes

"Neither the wisest Constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt." -Samuel Adams
Donethat
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60 billion is 5 percent of a 1.2 trillion deficit....
Crzymorse
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Maryland
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Tesla,

I'm pretty sure the balance sheet wouldn't look very good. It looks scaled back down to $9B. If Christie didn't open his mouth he probably would have gotten the $27B that was orginally in the bill. I have a feeling Christie is going to be turned into the political version of Ned Beatty in Deliverance.
Drkshapiro
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Southern CA
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The 60 billion additional is about what the govt will take in extra by taxing additional on singles >400k, couples above >450k, right? So it's a wash making that tax increase worthless in cutting anything??

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A government that robs Peter to pay Paul can always depend on Paul. --GBS
Azusgm
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East Texas
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Where did all of that Recovery Act of 2009 money go? It was supposed to create jobs and build infrastructure. Some of the "necessary, emergency storm proofing" should have been done so that there would have been less damage in the first place.

What did they do with our money?

(Besides grow, equip, and train SWAT teams, that is.)
Drkshapiro
Posts: 651
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Gold
Southern CA
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Azusgm, $10,000 of it went to get 12 salmon fish made out of wire to beautify a median on Canal Drive in Washington. Plus, I can guarantee that a lot of the roads that were actually in good condition were fixed by "Americans put back to work" in southern California, so now they are still actually in good condition. And, I am thankful they do not seem to be worse.

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A government that robs Peter to pay Paul can always depend on Paul. --GBS
Genesis
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Admin A True American Patriot!
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Oh, we got some of that too, including a "flyover" intersection that most-certainly did not need to be installed and was never backed up.

But heh, gotta spend that money!

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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
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