O State Ill-Begotten, Save Us

Professor Michael Rozeff isn't trying to get tenure at Harvard:

Even if floods cause people harm, there is neither an economic nor a moral justification for creating a taxpayer-paid insurance scheme. We willingly enter an insurance pool to reduce a large risk that we face. If the State forces us into a flood insurance pool and we face a low risk, then we are simply paying others who bear a higher risk. This is not insurance but servitude. This is a fraud disguised as insurance. This coercion is introduced by the provisions in the law that prohibit lenders from making real estate loans for homes in an area designated as a flood plain unless the owner buys flood insurance. Furthermore, making uninsured taxpayers foot the bill for flood damages is not even disguised servitude, but daylight burglary.

If this national insurance-against-peril principle is allowable, then it is allowable to make taxpayers pay when individuals suffer a heart attack or when they lose their jobs or when they become old. These things have already been done. What else can be "insured" against? Just about everything. In the extreme as the State multiplies these schemes, it means that when anything bad happens to a person, everyone else pays for it. If the total body politic incurs $10 billion of harm, then the total body politic pays itself $10 billion. Forced nationwide insurance on all such perils is nugatory. It is uncollectible and of no real value. It is shifting money around from one to another with no gain. Indeed, there will be net losses because of the negative incentive effects of the programs, the costs of administering the programs, and the costs of tax compliance to fund them.

You might want to read the whole thing.This isn't your average take on Katrina