This is my third diary concerning the proper mechanism for funding disaster relief. I am quite befuddled as to the reason for my obvious inability to communicate what I see as a very straight forward proposition that is akin to "water is wet". It is, to me, quite amazing that people are rejecting the proposition. And perhaps, try as I may. I am simply failing to accurately define the proposition. I arrive at that conclusion because rejecting the actual proposition is senseless. Perhaps the definition of "disaster relief" is not clear enough. So I will define it as "a widespread destructive event arising from natural happenstance such as hurricanes and earthquakes in which there is no purposeful human activity involved in bringing about the disaster". This does not include infrastructure development to manage flooding and the like. It only includes the relief efforts involving people displaced by the NATURAL events. The reason for this strict definition is that the proposed financing of the relief effort is too broad to be used to "rebuild" local infrastructure. That sort of thing must be done using loans and local resources. FEMA should not be paying out funds from the treasury to rebuild the Louisiana levies. "disaster relief" terminates a short period of time following the actual disaster and it is the cost of feeding and housing displaced persons and providing assistance in getting low interest loans for the rebuild. There is NO WAY that ANY FEMA money should be being spent more than six months after the disaster.
The funds necessary to disaster relief should be created from thin air by the US Treasury or through a grant to the treasury from the FED. In the financial meltdown the FED created trillions of dollars to "rescue" the rich people that CAUSED the disaster. Where is the FED when the common people need a "bail out" from a disaster they DIDN'T cause? I am not suggesting that any other funding be done in this manner. ONLY "disaster relief". The Congress should KNOW that the relief effort is OFF BUDGET.
The creation of this additional money is a FLAT TAX on financial wealth. It is assessed to all financial wealth at the same rate. In the case of the current hurricane and earthquake amount of five billion it would be a one time devaluation of the real money aggregate amounting to two tenths of one percent. (the real money aggregate is M3 plus all the Treasury debt. And that sum is about 26 trillion dollars). And five billion divided by 26 thousand billion = .000192308.
The amount of money in anyone's bank account or in anyone's wallet remains unchanged.
This should be the standard mechanism for dealing with disaster relief. FEMA should be OFF BUDGET because "disaster relief" is so well defined yet totally UNPLANNED as to the amounts necessary and the timing of the disasters. That FEMA should have a budget is fine. But the FEMA budget should be totally separate from the general revenue budget and have no effect on the general revenue budget. The NEW money approach does that quite well.
