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What's the free market solution for natural disasters?

Maybe Houston should follow the Venezuelan model.

Zalatix said:
Their safety nets are absolutely pathetic in scope. Go look at what money the Red Cross has to help in Texas right now. It's a drop in the bucket compared to what they need.

Take the government out of it and Houston will come back as a bunch of shantytowns with a few super rich high rises overseeing-er, overlooking them.
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TobyOne said:
Maybe Houston should follow the Venezuelan model.
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Why bother with that when you already have free market hyperinflation of water and gasoline, and probably soon food, too?
 
vegas giants said:
A free market is concerned about making money. If you have no money you get NOTHING from the free market
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Exactly. Profits over people. It's natural selection and the animal kingdom in nice clothes.
 
vegas giants said:
Only for those that have it
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Yep, that is the basic idea - no policy then no claims are paid. The "safety net" in your view appears to be a system that should pay benefits to (only?) those that didn't buy insurance policies since those that did buy insurance policies don't need it. ;)
 
ttwtt78640 said:
Yep, that is the basic idea - no policy then no claims are paid. The "safety net" in your view appears to be a system that should pay benefits to those that didn't buy insurance policies since those that did buy insurance policies don't need it. ;)
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Police, fire and search and rescue are also part of the safety net and NOT part of a free market system
 
ttwtt78640 said:
Yep, that is the basic idea - no policy then no claims are paid. The "safety net" in your view appears to be a system that should pay benefits to those that didn't buy insurance policies since those that did buy insurance policies don't need it. ;)
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You've never actually had an insurance plan, have you? They hardly provide a safety net. I have a gold plated HO5 plan on my house and when we had water damage we got the lowest estimate for replacing damaged equipment. They do this to you when your car is totalled, too. And don't have a fire, I've had that issue in the past, too. They will always lowball the hell out of you. The insurance safety net has wider holes in it than an actual net.

Then they put you on a blacklist which makes it hard to get insurance in the future, especially when it comes to water damage.

Let's not even get into flood damage, which is far worse.

BTW do you know what HO5 is?
 
vegas giants said:
Police, fire and search and rescue are also part of the safety net and NOT part of a free market system
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So what? Simply because public services exist does not mean that private services do not also exist. BTW, where do you suppose the funding for those public services comes from?
 
vegas giants said:
Police, fire and search and rescue are also part of the safety net and NOT part of a free market system
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Libertarians always choke on the idea of privatizing police, fire and search and rescue :lamo
 
ttwtt78640 said:
So what? Simply because public services exist does not mean that private services do not also exist. BTW, where do you suppose the funding for those public services comes from?
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From the free market system. But thank god we do not have a pure free market system in this country
 
Lutherf said:
If I have liability only coverage on my car and get in a wreck should my insurance company buy me a new car? I had a choice to purchase full coverage and uninsured motorist coverage but I chose not to.

Disaster loans are a reasonable government function and don't have a long term impact on free markets.

Much of what I hear from the left is based on the assumption that the right wing doesn't want any government control over anything. We're not Anarchists. We simply want government to be most accountable at the local level and more limited as we reach the federal level. There were a limited number of things we delegated to the federal government and there is a good reason for those limits. There is a provision in the Constitution to lay and collect taxes for the defense and general welfare of the United States. It is reasonable to extend a loan guarantee program to the states under that specifically delegated authority.
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Luther have you ever read the FEMA guidelines on applying for Federal government assistance? Holy Cow! I read through it today and the red tape is just as thick as every other Federal bureaucracy. Any poor shmuck thinking the Federal government is coming to their rescue has a rude awakening if they can't jump through all the hoops the feds have put into place.
 
Evilroddy said:
The free-market solution for natural disasters is to let those effected suffer and potentially die. The free market "externalises" social responsibility to the state, to charities and to religious institutions. Most people of limited means cannot afford the insurance necessary to fully protect themselves from such disasters. Since insurance companies are diverting more and more of the premiums they collect to paying shareholders and underwriters higher dividends, these companies must charge even more to insure policy holders. In the unlikely event that all of Houston's residents managed to somehow buy and pay for the correct insurance to cover losses from Hurricane Harvey, then the insurance industry and their underwrites would be wiped out by excessive liabilities. Their solution would be to lobby the State and Federal governments for assistance to avoid bankruptcy and default of the insurers and underwriters. So the externalisation only applies when policy holders are hurting, but not when insurers and underwriters are threatened.

That is why societies must depend on the state to provide the means for collective recovery from wide-spread natural and man-made disasters. The private sector, driven by greed and the profit motive, will simply not do it unless the state backs them up with guarantees, should the liability become too great. So you can pick your racket and the racketeers with which you will work but either way you are going to foot the bill as a private citizen through increased premiums or increased taxes. At least the taxes don't have the additional cost of profits for shareholders and underwriters built into them, ... yet.

Cheers?
Evilroddy.
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This is why we should all persue a limited means of government. Let the free market handle small floods, small fires, and isolated instances where tornados, huricanes, and earthquakes only due a small amount of damage to a small amount of people. When we have a huge amounts of damage like we're witnessing in Houston, the federal government steps in and helps everyone equally. Its the most good for the lowest price.
 
SonOfDaedalus said:
I disagree. Insurance is arguable one of the greatest economic innovations. Who would have risked sending a ship across the Atlantic for trade without insurance? It opened up so much trade and business opportunities.

I would consider social safety nets as being a form of insurance where the risk pool is national and thus most efficient. Even if you're rich and don't need welfare today, one day you may need it. So in a sense, you tax dollars went into a form of insurance.

What libertarians don't admit is that when it comes to risk people seldom act in their own best interest. Imagine if people weren't forced to buy auto liability insurance. Lots of people who have faith in their driving skills. "I've never been in an accident, why should I pay hundreds of dollars for insurance?"
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Then why not advocate for the removal of the cap on social security tax. It would help the entire country who benefit from SS by having a larger pool of money. Currently people making 600K a year pay the same amount of social security dollar for dollar as someone making 120K a year. Instead of it being proportional to the 6%
 
jdog21 said:
Then why not advocate for the removal of the cap on social security tax.
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Instead of half-assing the welfarization of Social Security, just welfarize it. This means removing the cap while also adjusting benefits correspondingly to wealthy retirees. Grand bargain, it's sometimes called. Retirees who had high incomes for the last 40 years benefited from that cap that existed their entire careers. What distinguishes the entitlement of someone who earned $200,000 per year on average (in constant dollars) for the last 20 years from someone who will average $200,000 per year (in constant dollars) for the next 20 years? Nothing except age. There is no inherent superiority of the older guy just because he's older. Nothing makes him especially more entitled to full SS benefits-net-of-cost whereas his younger equivalent should have to see vastly reduced SS benefits-net-of-cost. The rational and fair way to welfarize Social Security is to devise a way to reduce benefits to highest-income and wealthiest boomer retirees commensurately with any raise to or elimination of the SS cap.
 
Neomalthusian said:
Instead of half-assing the welfarization of Social Security, just welfarize it. This means removing the cap while also adjusting benefits correspondingly to wealthy retirees. Grand bargain, it's sometimes called. Retirees who had high incomes for the last 40 years benefited from that cap that existed their entire careers. What distinguishes the entitlement of someone who earned $200,000 per year on average (in constant dollars) for the last 20 years from someone who will average $200,000 per year (in constant dollars) for the next 20 years? Nothing except age. There is no inherent superiority of the older guy just because he's older. Nothing makes him especially more entitled to full SS benefits-net-of-cost whereas his younger equivalent should have to see vastly reduced SS benefits-net-of-cost. The rational and fair way to welfarize Social Security is to devise a way to reduce benefits to highest-income and wealthiest boomer retirees commensurately with any raise to or elimination of the SS cap.
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Why adjust the benefits?
 
jdog21 said:
Why adjust the benefits?
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Why raise the cap?

To raise the cap but not affect current benefits to rich retirees is to say that current retirees deserve a pension with no cap whereas the next generation deserves welfare. Eliminating the cap cuts benefits-relative-to-cost for only the future well-off retirees but not current ones. Killing the cap plus asset-testing benefits shares the burden.
 
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Neomalthusian said:
Why raise the cap?

To raise the cap but not affect current benefits to rich retirees is to say that current retirees deserve a pension with no cap whereas the next generation deserves welfare. Eliminating the cap cuts benefits-relative-to-cost for only the future well-off retirees but not current ones. Killing the cap plus asset-testing benefits shares the burden.
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I think you misunderstand my meaning of removing the cap. Currently if you make over 121k you then stop paying social security tax on your income. By leaving the current benefits system in place and making everyones income subject to the ss tax of 6% instead of just the lower class and middle you will get more revenue to continue the program for future generations.
 
jdog21 said:
I think you misunderstand my meaning of removing the cap. Currently if you make over 121k you then stop paying social security tax on your income. By leaving the current benefits system in place and making everyones income subject to the ss tax of 6% instead of just the lower class and middle you will get more revenue to continue the program for future generations.
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And current well-off retirees enjoy those full benefits while having benefited from the existence of that cap you're ready to eliminate during all their working years. Eliminating the cap targets one group of Americans but not another equivalent group that is essentially no different except for their age.
 
Neomalthusian said:
And current well-off retirees enjoy those full benefits while having benefited from the existence of that cap you're ready to eliminate during all their working years. Eliminating the cap targets one group of Americans but not another equivalent group that is essentially no different except for their age.
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Thats like saying you cant lower income taxes cuz the older people have been paying higher income taxes much longer then the youth have. So the amount of income tax the older generation paid vs the younger generation paid will be disporpotionate.

The emlimination of the cap doesnt target one group it targets all groups.
 
jdog21 said:
Thats like saying you cant lower income taxes cuz the older people have been paying higher income taxes much longer then the youth have. So the amount of income tax the older generation paid vs the younger generation paid will be disporpotionate.

The emlimination of the cap doesnt target one group it targets all groups.
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No it doesn't. The mere need to eliminate the cap is an acknowledgement that, for years, we haven't taxed enough relative to the benefits promised in connection with those taxes. If you look at the programs costs and benefits as intertwined by expressing them as benefits-net-of-cost, you can't get around the fact that making the program more financially self-sufficient requires lowering someone's benefits-net-of-cost. Someone gets their benefits lowered net of cost. There is zero other way to address the program's issues other than by lowering someone's benefits-net-of-cost. The elimination of the cap by itself affects future beneficiaries only. The younger you are, the worse you're affected. The older you are, the less you're affected.

And remember, this is assuming no benefits are increased corresponding to the increased contributions from high earners, which should be obvious because if benefits were increased correspondingly with increased contributions, the cap elimination would be pointless.

If you have a guy that retired today after 30 years and averaged $200,000 over his career, and another guy who starts work today and will earn $200,000 a year on average for the next 30 years (constant dollars for both), eliminating the cap today affects the latter guy only, while letting the guy who benefited from a cap that apparently should never have existed get off unscathed. Only by a combination of eliminating the cap and pulling back the older rich guy's benefits is that burden shared the least bit equitably. Both guys are going to be fine, financially. It's arguable that neither actually needs any social security benefit in the first place. But if we're going to address the program's funding problems, and we're going to do it by taxing the wealthier individuals more, there is no reason to give today's wealthy retirees a complete and utter pass. They're the last generation that will see defined benefit pensions on top of their Social Security, so they are the least deserving of full benefits after working for decades with inadequate contributions going into the program. They can share in the fun too, and they should.
 
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