Because flood insurance and pension guarantee failure aren’t enough, Congress wants to extend the Terrorism Risk Insurance Act (TRIA).
The version approved by the House Financial Services Committee contains several provisions that the Treasury Department opposes, such as the addition of group life insurance and the kinds of coverage eligible for the backstop. The bill also calls for different triggers for different types of coverage — a provision dubbed siloing — that critics say would lower the damage level at which the federal program could be invoked.
…The Treasury Department has not favored extension of TRIA, but agreed last summer to accept it if it were more restrictive than the original program and designed to be temporary, leaving coverage eventually to private insurers.
Treasury Secretary John W. Snow endorsed the version approved by the Senate Banking Committee. [ed. note: The Senate version is less expansive.] The panel’s actions “recognize the temporary nature of the program and place terrorism insurance on the right path to full private market participation,” he said.
…The Treasury Department and other critics say the private market is now able to resume insuring against terrorism but will not do so as long as the federal government provides the coverage at little or no cost.
I’ve left out the details because they don’t matter in the discussion of principle. They’re in the article if you want them. What’s important here is that the government is once again circumventing the private market and the Treasury Department tried to explain this. It’s nice to have the assurance that someone will pay for the damage should another attack occur, but it’s not at little or no cost.
An attack could occur anywhere, but no one expects it to be in Peoria. Those people shouldn’t pay for the risk inherent in building a new skyscraper in New York City. We should’ve learned this lesson with every hurricane that comes along. The private market would’ve compensated for the extra risk to lives and property along the Gulf Coast by making it (prohibitively?) expensive to live and work there, but our helpful friends in Congress crushed that. Taxpayers get the $200 billion bill, yet the undesirable fallacy of socialized risk management denial marches on.
Post Script: Thankfully we have someone in Congress to put it all in perspective.
“I do not regard TRIA as a favor to the insurance industry,” said Rep. Barney Frank (D-Mass.). “It’s a favor to the insureds.”
I think that (D-Mass.) should read (S-Mass.) “favor to the insureds” shows me that Rep. Frank prefers his capitalism with a large dose of socialist stupidity.
So you don’t care if Boston, New York or LA gets blown up?
Who do you think pays enough taxes so that you farm belt people can have your huge subsidies?
Winn-Dixie?
BrStarr,
Read through the archives and you’ll find that it’s no secret that I live in the Washington, DC metro area, which I do not believe is in the farm belt. I acknowledge that I face greater risk living here. As such, my cost to insure my life, health, and property will likely go up, if the private insurance market is paying attention. I accept that, as well as believing that the farm belt should not have to pay it since they don’t live here and didn’t force me to live here. And if I showed you my tax bill, you’d realize that I’ve “earned” the right to get a “favor” from Congress. I’d rather have lower taxes and a private insurance market, but that’s the crazy libertarian in me.
As to the other points, no, I don’t want to see Boston, New York, or LA blown up. I’ve been to all three cities and like them well enough that I’d like to be able to revisit them.
And I don’t like farm subsidies. I’d rather pay the price at the supermarket than at the Treasury. Either way, I’m paying. Crazy me, I think the market can do it better. Also, as a vegan, I benefit little from subsidies for beef, chicken, milk, etc. Again, my personal choices. And the private market could handle them.
Today’s lesson: don’t call me a hypocrite until you have facts. Have a day.