Glad they didn't let their personal biases interfere with moral hazard.
Is this the moral hazard of people knowingly subordinating other people's real homes and livelihoods to the rigid diktats of a self-involved social theory invented by and for rich white landowners and spuriously applied to a representative government's allocation of the money it invented by fiat? Because that moral hazard was very much incurred, courtesy of these two gentlemen and sixty-five of their compadres.
Maybe if the federal government didn't subsidize flood insurance for places at high risk of having floods, people would be more reluctant to establish their homes in such dangerous areas?
Or maybe areas around river mouths and along seashores have always been densely populated and it's not some sort of nefarious government scheme that makes people want to live there.I never said such moral hazard was intentional, nor did I say that government-subsidized disaster insurance makes people want to live there. However, as I already stated, if the government did not provide disaster insurance to people living in disaster-prone areas, then people seeking to live there would have to consider the cost of disaster insurance prior to purchasing a house in a disaster-prone areas.
Ceteris paribus, fewer people would buy houses in disaster-prone areas, and fewer people would be in need of disaster relief.
Just for argument, consider this extreme hypothetical: Suppose that it is known that there is a 90% chance of a hurricane demolishing my pristine $400,000 Florida home. Hurricane insurance would have to cost $360,000 if this were the case. Ordinarily, paying $760,000 for a home that gives me slightly more than $400,000 satisfaction would make no sense, but since the government is paying $360,000 of this cost by taking money from people who live in less pristine locations, I consider this a rational decision. Of course, while the numbers may not be as extreme in real life, the same principles apply. If you consider it a goal of government policy to inflate real estate prices for hurricane-prone areas at the expense of people who live in less aesthetically-desirable areas, then I suppose it would make sense to support this policy.
Of course the situation looks much more clear-cut when examined from only one side of the equation. You neglect to mention that government cannot create wealth, and must fund its endeavors through either taxation, inflation, or credit. Any way you slice it, you must punish people who live nowhere near the areas struck by Hurricane Sandy in order to compensate those affected by the hurricane. If you prefer punishing wage earners in order to help primarily well-off individuals affected by the hurricane, then so be it.
