Five in five would be better because FEMA is not only wasteful, its existence actually increases the costs of natural disasters by exacerbating risky behaviors already too strongly encouraged by insurance-premium regulation. Americans survived for over two centuries without FEMA and could do so again. All Congress needs to do is reverse the mistake it made in 1988.

Former President Jimmy Carter formed FEMA with two executive orders signed in 1979, and its role in emergency management and civil defense was legislated in the 1988 Stafford Act. FEMA became part of the new Department of Homeland Security in 2003. Subsequent laws passed after major hurricanes Katrina, Sandy, and others tried to beef up an agency that has long played political favorites, with up to half of its expenditures made for partisan purposes. Another large but largely hidden cost comes from the excessive risk-taking that FEMA and insurance-premium caps encourage.

Before FEMA or property insurance, Americans who wanted to live in known catastrophe zones built cheap and disposable, or very robust, structures. They also made contingency plans to flee or ride it out without government assistance. Private donations, including from insurance consortia, also flowed into areas devastated by floods, fires, quakes, and the like. Moreover, prices in affected areas jumped, inducing entrepreneurs to first bring in the most needed goods in the shortest supply.

Insurers also helped property owners by charging higher premiums to those who wanted to insure risky structure types in risky areas, signaling that they should not build at all, or build more cheaply, thus reducing premiums and minimizing losses if catastrophe struck. Americans could build mansions next to cliffs but they paid large premiums for the privilege or they remained self-insured, suffering all losses when the cliffs caved.

As rational and equitable as that system was, the New Deal began to break it down. As federal and state governments, and the taxes that fed them, waxed ever larger, increasingly infantilized Americans began to expect more and more from them, including insurance premium caps and government-provided emergency relief services.

By the turn of the 21st century, many Americans built their homes wherever they wanted and expected insurance companies and taxpayers to bail them out when those structures were destroyed. Policies have become so irrational that some states enforce so-called price-gouging laws that cap price increases after disasters and thus ensure that entrepreneurs have little incentive to bring goods into affected areas, further increasing reliance on FEMA.