"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Yet Another Trillion-Dollar Unfunded Liability: Too Many People In Hurricane Alley

One of the big recent changes in American life is the ongoing mass-migration from the middle of the country to the coasts, especially those of the Southeastern and Gulf States. Florida and the Carolinas, along with Houston and surrounding Texas counties, have gained millions of new residents seeking to trade snow and monotony for sun and water. Coastal state governments have by-and-large encouraged this immigration and the resulting construction, paving, and deforestation because new residents pay taxes and developers contribute to political campaigns.

This is turning out to be a huge, perhaps insanely expensive mistake, similar in a lot of ways to out-of-control public pensions: A short-term benefit that produces long-term costs – i.e., an unfunded liability – which accumulates more-or-less secretly until something happens to turn an accounting issue into a cash flow nightmare.

Consider Houston. Over the past few decades hundreds of thousands of people have moved in, and developers have accommodated them by paving over much of the land that used to absorb floodwaters during storms. When hurricane Harvey hit in 2017, the city found itself underwater for days, with damages totaling $125 billion. Much of this was covered by tax payers via federal flood insurance.

Now fast forward to today’s North and South Carolina, also very popular destinations for Americans from colder climes, and the scene of rapid construction of homes, hotels and stores within a few miles of the ocean. In the following article, the New York Times lays out the downside of this kind of short-sighted public policy.

Why the Carolinas Have Become More Vulnerable to Hurricanes

Twenty-nine years ago this month, Hurricane Hugo barreled ashore just north of Charleston, S.C., a category 4 storm with maximum winds estimated at 140 miles an hour and the highest storm tide ever recorded on the East Coast.

Here is where people lived in the region in 1990. Hugo was the nation’s costliest hurricane ever at the time, with damages of about $7 billion.

Carolinas population 1990 unfunded liability

Over the next three decades, an estimated 610,000 homes were added within 50 miles of the coastline, according to my research.

Carolinas population 2018 unfunded liability

Most will be affected by Hurricane Florence, the monster storm that is advancing on the coast, with landfall expected Friday morning.

We often hear that climate change is influencing the frequency and strength of tropical storms, heat waves and wildfires, and this is certainly true, though it is too early to say what influence the warming temperatures may be having on Hurricane Florence. That answer must await a post-mortem by climate scientists. But it is also true that rapid coastal development is amplifying the impact of weather and climate events like Hurricane Hugo and those expected with Hurricane Florence over the next few days.

In fact, according to research by me and colleagues, the root cause of the country’s escalating number of weather- and climate-related disasters is not necessarily a rise in the frequency or intensity of these events but the increasing exposure and vulnerability of populations that lie in their path.

That may seem obvious, though perhaps not for the people who have moved to places that are likely to end up disaster areas someday. That fact has either escaped their notice or seems to be of little consequence to them.

This process of population and development growth that influences disaster frequency and magnitude is known as “expanding the bull’s-eye effect.” It isn’t just the population increase that is important in raising the disaster potential but also how the population and built environment are distributed across a landscape. As the targets — people, homes and businesses — become more numerous and spread, so does the likelihood that it will be hit by a tornado or hurricane or wildfire. And that expanding pattern determines the severity of the disaster.

Since 1940, development within 50 miles of the Carolina coastline has increased an estimated 2,180 percent, or by 1.3 million homes. And as I mentioned, nearly half of this development has taken place since Hurricane Hugo, and many of these homes were added in high-risk areas like floodplains.

There seems to be something of a “disaster amnesia” going on with respect to our land development practices after a calamity.

More than a decade ago, 10 leading climate experts felt compelled to issue a statement saying the debate then about whether global warming was intensifying hurricanes was a distraction from “the main hurricane problem facing the United States.” The problem, they said, was the continued “lemming-like march to the sea” in the form of unabated coastal development in vulnerable places. “These demographic trends,” they said, “are setting us up for rapidly increasing human and economic losses from hurricane disasters.”

We know much more about how the warming climate is influencing tropical storms. And in many places along the nation’s coastlines, the lemmings are still marching toward the sea.

Nearly 30 percent of the American population lives along a coast, and an even larger percentage resides in flood-prone regions. The Census Bureau recently reported that the Atlantic and Gulf Coast regions have continued to grow despite costly and damaging hurricanes, with their combined populations rising to 59.6 million people in 2016 from 51.9 million in 2000.

It is not a matter of whether a disaster will strike, but when for individuals living in many of these regions.

And when disaster knocks at the door, the bill is left to taxpayers who subsidize the National Flood Insurance Program. That money is often used to rebuild homes in the same high-risk locations. Unfortunately, given current insurance programs, rates that don’t reflect the true risk of insured entities in hazard-prone regions and the lack of incentives to persuade people not to live in these areas, the system we have is unsustainable.

We need to be smarter about where we are developing and how we’re doing it, building in resilience in any new construction in areas prone to weather and climate extremes. People who choose to live in high-risk areas should bear the cost when disaster strikes. Of course, we should be helping people hit by storms like Hurricane Florence. But I’d rather see those dollars directed to hazard mitigation, and making existing and future development better able to withstand a disaster before one hits.

Just because we can live somewhere doesn’t mean we should. After all, as the saying goes, “The definition of insanity is doing the same thing over and over again, but expecting different results.”

Among the many crucial quotes from the above article: “In fact, according to research by me and colleagues, the root cause of the country’s escalating number of weather- and climate-related disasters is not necessarily a rise in the frequency or intensity of these events but the increasing exposure and vulnerability of populations that lie in their path.”

In other words, you don’t need climate change to make the policy of encouraging people to move to hurricane alley a bad idea. There have always been – and always will be — monster storms, so a continuation of historically normal weather guarantees the occasional Cat-5 direct hit on the Eastern Seaboard. The more people we put there, the higher the cost of cleaning up afterward.

And since we haven’t had a direct hit in quite a while, no one seems to understand just how much all those extra buildings will cost to replace. In this sense, Cat-2 Hurricane Florence is a taste of things to come, but just a taste. The main course is the inevitable “big one” that hits Miami, after which we’ll finally be able to calculate this latest unfunded liability.

13 thoughts on "Yet Another Trillion-Dollar Unfunded Liability: Too Many People In Hurricane Alley"

  1. It is ridiculous to think that man controls the land or weather in which he lives. Personally, I think that humans should be manipulating the land to have access to the ocean without having to actually live on the coast this way we won’t suffer from hurricanes. Buildings should be based on modern japanese architecture and the risk of great destruction dissapears in the case of planetary movement. Instead of wasting $$$$ on ineffective tomahawk cruise missles, why not use that money to do all sorts of projects like how the Chinese are building islands. Incredible how the Chinese also built the largest glass bridge.

  2. So many mis statements in one article. Just a couple here:
    “We often hear that climate change is influencing the frequency and
    strength of tropical storms, heat waves and wildfires, and this is
    certainly true” Absolutely not true that there is any evidence of tropical storms increasing in frequency or strength. Simply not true.

    “out-of-control public pensions: A short-term benefit that produces long-term costs – i.e., an unfunded liability – which accumulates more-or-less secretly…” More unadulterated BS. The pension scam (public and private, look at the Teamsters Central States Fund for just one) are purposefully and willfully enacted by the putative “leaders” of this nation, designed to screw someone. All the participants in these scams hope dearly that the screwings (matters of public record and simple mathematic analysis) are far enough in the future that the foisters will be elsewhere when the bill comes due.

    Disclosure: I live on a barrier island. We properly insure the home, though we are not in an officially designated flood plain. We carry comprehensive flood and wind and all-hazards insurance. That the Federal government MANDATES federal subsidy (Thanks, all you folks on the great plains!) is not for me to change. If we were in a real insurance market, the price for such coverage might be MUCH higher, and the property value much lower. I would do the math and see if it was worth it before I bought.

    Anyone who declines to properly insure their property against loss ought to incur (solely) the risk associated therewith, including a complete uninsured loss of all value at the extreme. Subsidizing the lack of foresighted insurance is what encourages people (and financiers, and under-insured municipalities) to force risk on to people who do not enjoy the benefits of the desirable climate and surroundings. This will change, and catastrophically so one day. I am prepared to walk forever away from this home when and if a big, direct hit from a hurricane destroys the sandbar I live on without seeking anyone (outside the current insurance paradigm) to make me whole. Anyone unwilling to insure should be prepared to either self fund or struggle mightily and quietly, not force fellow citizens at the point of a gun to make them whole despite their folly.

    Last: Look at the West Coast for a moment. If (when?? not sure) a big, powerful, widespread seismic event (with many feet of lateral displacement) occurs, it will make hurricane recovery look like a fun pic-nic. It will be millions of uninsured people AND completely wrecked underground infrastructure, bridges, roads, gas mains, pipelines, water/sewer conduits, etc. Not just a matte of de-watering and moving mud and snakes. Ugly does not begin to describe it, and it could happen tomorrow, in theory.

    “Experience keeps a dear school, but the fool will learn at no other.” I think Ben Franklln said that.

  3. You are overlooking the building codes that come into play AFTER hurricanes hit. Way too many coast – and inland areas – were built to very poor codes. After a hurricane everything changes and for the better.

    Notice the photos of the houses on the Outer Banks and see how many of them are standing. They learned a long time ago that they had to build better and now they are. Same thing happened after Sandy. No more one foot off the ground summer houses: 10-12′ high homes on pilings.

    FEMA has never been on top of things and unfortunately waits until disaster strikes to insist on much more rigorous codes. Their maps are out of date and the effort needs to be put into becoming pro-active.

    Most of the mess of Florence is coming from inland towns and decisions will have to be made there just as they were after Houston last year.

  4. So when the big one finally hits California are guys like the above going to say they shouldn’t have built there, they’re on their own?

  5. I totally do not believe in manmade global warming, but I do believe there’s a lot more damage with all the construction in coastal areas.

Leave a Reply

Your email address will not be published. Required fields are marked *


Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.



Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.