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This is one of those situations where I agree that the market should decide. Otherwise we are privatizing the gains, and socializing the risks. Plus it encourages further ill-advised development, compounding the risk (not only to taxpayers, but also to people who die in the floods because they built someplace that could be flooded).

Consider New Orleans. We should have abandoned most of that city. Used the monies to relocate people instead of rebuilding and making vain attempts at fortifying the "defenses". NO is below sea level (or most of it is), and it's in a place where it is guaranteed to have more large hurricanes ever few years. It will be destroyed again**. If someone really (really!) wants to live there, fine. If they can afford the insurance, more power to them. A lot of people died there, and one could argue that cheap insurance that encouraged development was a factor.


**I won't repeat my rant on this. But due to a combination of factors, this really isn't in doubt. It's just a matter of time.
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