The National Flood Insurance Program (NFIP) is in debt to the American tax payer to the tune of $18 billion. Congress is considering forgiving the debt and they approved a six-month program extension to discuss this option.
Forgiving the debt, which amounts to another ill-advised bailout, is but one problem; ignored is the fact that the debt does not necessarily add up. Between 1990 and 2007, the NFIP collected over $28 billion in premiums. During the same period it paid out just over $30 billion in claims; a difference of less than $2 billion.
Assuming 30 percent for operating costs ($8.4 billion), the debt calculates out at just over $10 billion. Where is the other $8 billion?
MyNewMarkets.com has posted, “” on their website exploring this gap and the underlying causes in much greater detail. Additional posts will offer an option to the current plan.
Topics Flood
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