Flood Insurance Funding, Twin Challenges to the Nation and a Poem from Sid

Sid's Corner

ANOTHER FRIEND LOST    

Sid Bolotin

We shake hands

We hug

He mumbles that he loves me

Ten years with him and his wife

Making our foursome

A guarantee for all celebrations

Six months ago

Her death shattered that certainty

Along with our hearts

Now he’s moving

Three thousand miles away

Leaving a void, an emptiness

No more boys’ night out

Movies, eating, chatting

Two introverts in comfort

I watch him walk away

I feel the familiar sadness

Another friend lost

Echoes toll across my mind

Of other such partings

Rekindling embers of despair

  

                                                           

                                                               

That Nine Billion Dollars to Fund Flood Insurance

In view of Congress’ recent delaying and eventually passing legislation coming up with $9,000,000,000 to adequately fund the Federal Government’s Flood Insurance program, perhaps a word of clarification is needed.  It is a misconception that the government will pass this money on to those who suffered flood damage caused by tropical storm Sandy.  If a home or business owner didn’t have a flood insurance policy, they will never see any of this money.

Because flooding can cause massive unexpected losses for insurers, it usually is excluded from a homeowner’s insurance coverage.   Hence, the government provides money to pay such claims through special policies purchased from property insurance companies.  All over the country, banks holding mortgages often insist on it, and some homeowners, particularly in low-lying areas, routinely purchase it.  As with all insurance, they pay a premium for it.  It isn’t free.

Of course, the insurance companies do not have the funds to pay flood insurance claims.  The premiums are inadequate for this purpose.  For them to be able to do so would require a prohibitively higher premium than those set by the government.  They depend on the Federal Government to pass money on to them with which to pay such claims.  Because of the number of claims caused by Sandy, even Washington ran out of the money allocated for this purpose and hence, the emergency $9,000,000,000 measure was necessary.

It probably would be more expensive for the government to sell the policies directly rather than to do it through existing insurance companies which already have the administrative and claims experience to deal with such situations.  But let it be clear that the money is for claims for flood damage incurred by those prudent enough to have purchased flood insurance and not for those who were uninsured for flood damage, as I suspect most homeowner victims of Sandy were.

As for the House opposition to the original bill, which allocated about $50,000,000,000, it stemmed from two focuses.  (1) There were objections to the bill providing any “bailout” money whatsoever for the National Flood Insurance Program which a small number of legislators feel should be entirely private with no government backing at all.  (2) There were other Congressmen who opposed the bill because they felt that the bill, in addition to funding for the Flood Insurance Program, included “pork” for states not affected by Sandy, but whose Senators’ votes were needed to pass the bill which postponed the “Fiscal Cliff.” 
   Similar “pork” had been included in that legislation as well, such as providing liberal tax write off programs benefiting the film industry and NASCAR. 

 

If our government is to be functional, the Senate and the House must be taught that when it comes to any legislation whatsoever, “Pork isn’t Kosher.”  

Legislation which would not be enacted on its own merits, but the passage of which is needed to keep some legislators happy, should not be piggybacked onto bills which deserve to be passed on their own merits such as the Flood Insurance and the Fiscal Cliff “packages.”

Jack Lippman

                                                                  
                                                         

Twin Economic Challenges to the United States

The economic problems the United States is experiencing come down to two areas.  Over the next decade, we must focus on both of them and come up with innovative solutions.  The best minds in the country, in government, from academia and most importantly, from the business world, must be signed up to accomplish this.  Such an effort must carry a priority level as high as that of the Manhattan Project which developed the atomic bomb seventy years ago.

The first area of concern is unemployment.  As I have stated in previous postings, unemployment is going to be a permanent part of our economic picture.  Labor-intensive work can be done less expensively outside of the country where wages (and standards of living) are lower.  “Brain-intensive” work will remain in the United States but the increased use of robotics and advances in technology may limit the number of positions even for those trained in STEM (scientific, technological, engineering and mathematical) disciplines. Even retailing will produce fewer jobs as more and more commerce is done electronically.  Health care jobs will be the only ones which will be increasing in number, primarily because we are living longer.  I had suggested limiting weekly work hours and mandatory early retirement as ways of providing more jobs but how then will Americans be able to provide for their families and retirement if their time “on the job” is thusly reduced?  This problem must be addressed.

The second area of concern, and this brings up a word which is anathema to many, is wealth distribution.  Despite those who claim that the United States is sliding down the slippery slope to economic disaster, this still is the wealthiest nation in the world.  Our standard of living is the world’s highest.  Yet, there are many Americans who “do without” on a daily basis. Most Americans cannot afford what health care and retirement really cost and appreciate what government programs such as Social Security, Medicare, Medicaid and ultimately, the Affordable Care Act, provide for them.  

The trouble is that these programs are very expensive, and despite citizen and employer tax contributions over the years to fund them, paying for them has played a major role in causing the government to have a “deficit” every year. Doing away with or significantly reducing what some call such “entitlements” would quickly make the nation more solvent but at the same time, spell disaster for many individuals and families. 

These programs, which may be separately funded (such as Social Security), share in producing the annual deficits which have cumulatively brought our national debt into the trillions of dollars, numbers beyond the comprehension of most of us.  Other government outlays, such as funding the Iraq and Afghanistan military ventures “on the cuff” have also contributed to the debt.  Yet the wealth in this nation is there to pay for such programs and even reduce the debt.  

Taxing the wealthy and businesses is only a small part of the solution because such “going to the well” is ultimately self-destructive in that it discourages individuals from accumulating wealth and limits job-creating business activity.  There has to be another way of funding the programs, public or private, that are essential to the nation’s well being.  The United States has the wealth to do it.  This problem must be addressed.

Other nations seem to do better in addressing these problems.  We should look at how Australia, New Zealand, Canada and the Scandinavian countries, all with standards of living similar to ours, approach them.  We should not look at the way most of Europe approaches them.  What they are doing doesn’t seem to be working.  Future blogs may deal with possible solutions.  Your ideas are welcome.

JL

                                                                          

                                       

Most readers of this blog are alerted by Email every time a new posting appears.  If you wish to be added to that Email list, just let me know by contacting me at Riart1@aol.com.  

Also, be aware that www.Jackspotpourri.com is now available on your mobile devices in a modified, easy-to-read, format.

Jack Lippman

                                                   

                                                    * * *   * * *   * * *

To view older postings on this blog, just click on the appropriate date in the “Blog Archive” off to the right, or scroll down until you see the “Older Postings” notation at the very bottom of this posting.  The “Search” box can also be used to find older postings.

To send this posting to a friend, or enemy for that matter, whom you think might be interested in it, just click on the envelope with the arrow on the "Comments" line directly below.