All sorts of bad things happen when bankruptcy is out of reach for people, as we showed in a series of stories. People turn to unscrupulous operators who file phony bankruptcy cases, as happens often in Los Angeles. Particularly in the South, they turn to a form of bankruptcy that features a payment plan and that often ends in failure, leaving debtors worse off than when they filed. (African Americans are especially prone to that problem.) And finally, many people don’t file at all — and just hope that a debt collector doesn’t seize their wages.
Political Football Over Disaster Relief: Another Argument for Public Banking
By Ellen Brown, Web of Debt
This piece originally appeared atWeb of Debt.
Posted on Jan 4, 2013
|The National Guard (CC BY 2.0)|
|New Jersey National Guard troops assist displaced residents in Hoboken in late October.|
In a shameless display of putting politics before human needs, Congress began 2013 still scrappingover a $60 billion Hurricane Sandy relief bill fully nine weeks after the disaster hit. And if the Katrina experience is any indication, the bill may not bring adequate relief to struggling and displaced homeowners even when it is finally passed.
The damage wrought by Sandy to New York and New Jersey coastal areas wassimilar in scale to that to New Orleans from Hurricane Katrina in 2005. Just two weeks after Katrina hit, Congress approved $62.3 billion in emergency appropriations, along with numerous subsequent emergency funding requests to cover the damages, which topped $100 billion. Yet as noted on the Occupy Sandy Facebook page, federal relief funds post-Katrina were gutted in favor of “privatizing and outsourcing relief, making room for predatory lenders, disaster capitalists, and gentrification developers.”
According to a report by Strike Debt, the vast majority of FEMA’s resources and efforts are spent on public assistance programs that provide infrastructure restoration. Individual victims of disaster are for the most part just offered personal loans – loans that have many features of predatory subprime lending.
Disaster victims are now being expected to shoulder relief expenses that used to be shared publicly. Most people believe they are covered by their insurance policies or by the Federal Emergency Management Agency (FEMA), but many disaster victims have found that their insurance policies include obscure provisions that exclude coverage, and the only aid that FEMA gives to individuals is the opportunity to take on more debt.
It is a failing of our austerity-strapped federal disaster relief system that it can offer little real help to individuals; and it is a failing of our private, for-profit insurance system that the legal duty of management is to extort as much money as possible from customers while returning as little as possible to them, in order to maximize shareholder profits.
Most Sandy Victims Are Left Stranded
The report by Strike Debt was based on observations made at a community meeting in Midland Beach, Staten Island, on November 18, 2012, as well as on interviews with FEMA and Small Business Association (SBA) representatives, volunteer workers, local business owners, and residents throughout New York City. According to the report, there are three main sources of financial support being offered to Sandy victims: insurance, grants, and loans. Federal support is available only once private insurance has been exhausted.
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