U.S. Being Bankrupted By Disasters, Professor Tells Federal Reserve

May 17, 2010

America is emerging from a deep recession caused by financial messes on Wall Street, but Dr. J. David Rogers says the Federal Reserve is still being bankrupted by natural disasters.

“The National Flood Insurance Program was bankrupted by Katrina and Rita,” says Rogers, the Hasselman Chair of Geological Engineering at Missouri University of Science and Technology. “We are under water in debt from hurricanes, floods and other natural disasters.”

Just prior to the latest flooding disaster in Nashville, Tenn., Rogers spoke before the Subcommittee on Business Continuity of the Federal Reserve Bank at an annual conference in St. Louis. Rogers told officials that the Earth has seen big increases in hurricanes, flooding, and earthquake activity during the past 20 years, due to natural cycles.

According to Rogers, more money has been spent on natural disasters in the last 20 years than the total amount spent in all the years before that. Also, now, more than half of the American population lives within 50 miles of the ocean. “People get whacked by hurricanes and can’t afford the cost,” says Rogers.

Hurricanes and subsequent flooding on the East Coast and Gulf Coast are the most costly natural disasters. Rogers thinks people who live close to water should be counted on to replenish the National Flood Insurance Program at disproportional rates, but he notes that the entire country needs to do a better job of planning for disasters. The West Coast has devastating earthquakes, mud slides and even volcanoes. The Midwest has the New Madrid Fault, tornadoes and ice storms.

“Communities need to have plans, better infrastructures and disaster training,” Rogers says.

Unfortunately, a major disaster often has to occur before people take the implications seriously, he said, noting that currently the biggest public works project in the nation is occurring in New Orleans, thanks to stimulus money devoted to fixing the levee system.

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