In thinking about FEMA and disaster relief I have settled on what I believe is a fair and rational distribution of the cost of addressing disasters such as major hurricanes, earth quakes, floods, and the like. I hasten to add that some of the funds MAY be considered loans in some instances such as the Katrina incident. We will discuss the rationale for "loans" as opposed to outright relief below. But the basic idea is to fund pure disaster relief with newly created money as opposed to adding these relief funds to the budget or the national debt. When congress considers the funding of disaster relief, the consideration should be ove how much NEW money will be created to tend to the role of FEMA in addressing the immediate needs of the victims. Such monies should not add to the debt or to tax burdens. Such monies should be created by Treasury seignoriage or by direct monetary creation by the FED. It is important to say that such "printing of money" is suggested ONLY for disaster relief and, as such, all the booger-man stories of the inflation monster can be kept in the can where they belong. The amount of new money in the system that would result from actual disaster relief is not going to create a Weimar Republic hyperventilation.
Realistically speaking, the land around New Orleans, flooded by Katrina, was not land at all without the levies. Without the levies there was no land. It was covered by water and only became usable land due to the levies. For individuals that have a sense of justice, the flood prevention should be paid by the land owners of the land that would not exist but for the existence of the levies. FEMA should say, "OK, you screwed up and did not maintain YOUR levies by charging the correct ad valorem land tax rates that would have provided proper levies. We will LOAN you the money to rebuild the levies and you must repay the loan by collecting a tax from the land owners. I'm not real sure that rebuilding the levies comes under the heading of disaster relief anyway. The temporary housing and the help in relocating people is disaster relief. Rebuilding the same underwater residential and commercial areas at the expense of people living in Montana is not in the same bucket at all.