At first, this seemed like an internet hoax: FEMA is giving out debit cards for all Katrina victims, $2000. But it is real indeed. Here is the Fema press release, and a news story.
LibertyGuys offers a solid critique. But beyond the criticism that this is redistribution driven by politics, sets a very strange precedent, introduces a moral hazard on some scale, one does wonder whether and to what extent this is going to introduce complications into the work being done by the real charitable sector. I wonder too whether there is any historical precedent for something like this.
{ 9 comments }
This free money giveaway, combined with the rules against “price gouging” will serve to aggravate the shortages even further. Hoarding for everybody!
I shudder when I think of the double-dipping and other corruption this program will see, in addition to all of the expected problems.
Chris
http://amateureconblog.blogspot.com/
NPR this morning reported mass chaos and confusion over this issue, with even regional FEMA spokesmen oblivious on every aspect of this program–one in particularly knowing less than readers of this blog post knew. The crowds hoping for cash waited in line 6 hours, were shuffled from desk to desk, given contradictory instructions, and finally gave up in frustration.
Besides the immorality of all this, does anyone notice the irony of giving debit cards to people in places that still lack electricity and communications? How are they going to be able to use them if store computers can’t even power on, let alone connect to bank computers to find out how much money is in the accounts?
FEMA is merely executing Bernanke’s plan to resist deflation by dropping money from helicopters.
so much for that!
http://www.thespectrum.com/apps/pbcs.dll/article?AID=/20050909/NEWS/50909003
This just in: government still stumbling over itself trying to figure out how to give money away, private charity quietly going about solving problems.
I think this is what Bernanke meant when he said “money from helicopters”
Bernanke got the “helicopter” imagery from Milton Friedman. He used it in his book “Money Mischief” to explain why freely-expanding fiat money is just fine for the economy.
Comments on this entry are closed.