We can get our FEMA for free. We regular folks have this Federal Emergency
Management Agency, and banks have their emergency backup – The Federal Reserve.
Why should we use tax revenues for FEMA?
The Fed can fund FEMA repairs with new money created to replace the monetary value destroyed by the storms. More below.
The Federal Reserve supports the economy by literally creating new money, which is its job. This new money creation doesn’t cost a cent – the Fed writes a check on itself and births new money out of thin air. The Fed also creates new money for banks when banks make mistakes, or (very rarely) when a bank is involved in a natural disaster.
Now, the danger of creating new money is that too much fresh money ends up chasing a limited existing supply of houses and things to buy – the extra fresh money causes price inflation of the limited supply.
By definition, after a natural disaster like Hurricane Sandy, the country needs a greater supply of brand new houses and goods – because monetary value just got destroyed by the storm. (And some buildable land is now vacant and ready for smarter rebuilding – LEED certified, modern building codes, etc. And bridges, roads and transit repair projects are immediately needed.)
After this storm and with the rise in sea levels, New York City needs a revamped subway and storm drainage. Estimates are that going even one month without the efficient subway will result in $55 billion in costs to riders and affected parties.
Sandy destroyed much of the value of the subway. The value that millions count on for a quick, low cost ride to work. Remember, most New Yorkers don’t own a car – which saves them a ton of money and hassle.
The Fed should simply create the money to repair and upgrade the subway, and give the newly created money to FEMA to pay the repair contractors. Work could start next week, with no political wrangling.
The economic value lost by the storm would be replaced. Riders shouldn’t have to pay higher fares to repair the storm damage. The New York City Transit Authority shouldn’t have to go into debt – it didn’t do anything wrong, the hurricane did wrong. So, just as it does for the banks, the Fed should replace the money lost.
A side benefit would be no more of Congress’ time need be taken up with debate about funding FEMA and disaster relief. Disasters destroy, the Fed replaces, and the economy is back to where it started before the blasted storm.
If the Fed can provide “emergency” help to foolish bankers, it can provide emergency help to true emergency victims. FEMA should be funded fully by the Fed, with brand new money created to replace the monetary value of public goods (roads, bridges, transit) that is destroyed. Some “problems” really aren’t that difficult. We care about the persons affected by this tragedy. Let’s show them how much by replacing the things they count on that have been cruelly destroyed.