"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: WHY California Is Burning

The apocalyptic fires that hit California last month have left observers scratching their heads and wondering how destruction on that scale could be possible – and how much it will cost in the future if the causes aren’t addressed immediately.

This morning’s Wall Street Journal concludes that 1) the problems aren’t being addressed and 2) this failure is going to cost a fortune that no government is prepared to cover (emphasis added below).

Why Californians Were Drawn Toward the Fire Zones

Building codes, state grants and low insurance rates have encouraged people to flee expensive cities for their dangerously fire-prone fringes.

California fires
A Nov. 15 view in Paradise, Calif., above, shows charred remains of houses among the trees after the Camp Fire burned down more than 11,000 homes. PHOTO: CAROLYN COLE/LOS ANGELES TIMES/GETTY IMAGES

The historically deadly wildfires that have roared through California this fall, and a string of similarly destructive ones over the past two years, are boosting calls to do more to slow climate change. But another underlying problem has contributed to the fires’ tragic damage: For decades, California, supposedly the greenest of states, has artificially lowered the cost of encroaching on nature by living in the woods.

Permissive building codes, low insurance rates and soaring taxpayer spending on firefighting and other services have provided an economic framework that has encouraged people to flee the state’s increasingly expensive cities for their leafy fringes. The forested exurbs, including places once thought too hilly or too dry to develop safely, have offered comparatively affordable living with jaw-dropping views.

The upshot: More houses have been packed into the fire-prone border between civilization and forest—known among planners as the “wildland-urban interface,” or WUI—in California than in any other state.

This problem isn’t restricted to California’s woodland. Along the coasts, loose building standards and easy federal flood insurance have socialized the costs of building in the path of worsening storms and rising sea levels. It is time, in the parlance of classical economics, to internalize the long-externalized costs of building in the trees or by the beach.

California, both a bellwether of aggressive environmental policy and a pioneer of suburban sprawl, typifies the problem. For years, Cal Fire, the state wildfire-fighting agency, has been spending increasing sums to put out wildfires, as has the U.S. Forest Service. Already by 2006, according to an audit, most of the money the forest service was spending to put out large fires was “directly linked to protecting private property” in the wildland-urban interface. Meanwhile, at public cost, government has been encouraging more development by pushing infrastructure—roads, utilities, rescue services—ever farther into the forest.

Lax building codes are at the base of the problem. Even in California, which has some of the toughest such rules in the country, they often aren’t adequate or adequately enforced. The codes often dictate the use of fire-retardant materials in house construction but typically say nothing about how a development must be situated on the landscape—and that can help determine whether that development will burn in a fire, says Max Moritz, a cooperative-extension wildfire specialist at the University of California, Santa Barbara. “So the developers are able to come in, propose something, and often, without too much oversight, walk away after having built something in a dangerous place,” he says. “And we pick up the tab.”

In Redding, a city in far northern California where some neighborhoods were devastated by this summer’s massive Carr Fire, city officials have worked in the past with developers navigating the building code to help them save on costs, City Manager Barry Tippin says. For instance, Redding let a developer build a subdivision with just one road in and out instead of two under an allowed exception in the code; the one road was wider, but two are generally considered safer in an emergency. Now, he says, officials are reassessing their view of the code and have won a grant to pay for an outside review of their rules. “In the future, we should take a more deliberate and maybe harder stance,” he says.

Between 2000 and 2013, more than three-quarters of all buildings destroyed by fire in California were in the state’s WUI, and more were destroyed there than in all the WUI areas across the rest of the continental U.S. combined, according to a recent study led by Anu Kramer, a researcher at the University of Wisconsin-Madison. That is partly because of increasing construction in the WUI and partly because it is so weakly regulated. Ray Rasker, executive director of Headwaters Economics, a Montana-based nonprofit research firm that specializes in wildfires, notes that rules to protect buildings from fire—for instance, requirements for sprinklers and for regular fire-code inspections—tend nationally to be far stricter in urban areas than in the WUI, despite the relative risk. “If you place a home out in the woods, in a tinderbox, those rules don’t apply,” he says. “It’s backward.”

Once a house is built in California’s WUI, the state’s unusually low insurance rates have the effect of shifting much of the real cost. The average California homeowner pays about $1,000 a year in homeowner’s insurance—about half the level in Florida or Texas, two other states with markedly rising incidences of natural disasters believed linked to climate change.

That is a result of state policy, not an accident. California has an elected state insurance commissioner, one of 11 in the country who are elected, who caps the rates private insurance companies may charge. When insurers seek permission to raise rates to cover catastrophes, state law requires that they average at least 20 years of prior catastrophic-loss data, which minimizes the recent dramatic increases in fire damage. Those increases, wildlife specialists warn, suggest things to come.

If your response after reading this is “Those people are total morons,” you’re probably in the majority. Using artificially-cheap insurance and purposefully-lax building standards to destroy what’s left of a unique ecosystem is a crime against nature.

And asking taxpayers to cover the resulting catastrophic costs is political suicide. But of course the politicians, builders and bureaucrats who created this system will have moseyed off into the sunset with their fortunes intact before the full consequences come crashing down on tomorrow’s taxpayers.

Add the cost of entire future communities consumed by flames to the already gargantuan pile of unfunded pension liabilities that the state has accumulated, then toss in the plunge in tax revenue sure to result from the coming recession and equities bear market, and California might have bumped Illinois from the top of the “first state to go bankrupt” list.

As for why non-Californians should care, well, just go back a decade and note how the federal government (read national taxpayers) had to take on nearly the entire $10 trillion liabilities of the mortgage industry. Bankrupt states will no doubt get similar bail-outs when their time comes. Which means the dysfunction will eventually find its way into the currency markets.

Gold becomes more necessary with every one of these stories.

 

Emigrate While You Still Can

24 thoughts on "Yet Another Trillion-Dollar Unfunded Liability: WHY California Is Burning"

  1. You had me following along, nodding my head in agreement, until this statement:

    “…Florida or Texas, two other states with markedly rising incidences of natural disasters believed linked to climate change.”
    Prove it. Don’t simply drop in the current whipping boy, climate change, and walk away.
    California’s forest fire disasters are made much worse by poor land/forest management practices driven by the left-wing environmentalist radicals. Why is that not included in your piece?

  2. One of the problems- perhaps the most prescient- is that California is so busy robbing every taxpayer that they do not have the adequate funds left over to build correctly. You can only rob people so much before they start cutting corners and leaving neighborhoods with 500 dollar+ association fees while paying 13% state taxes. California’s socialist policies have destroyed any incentive to work there but encourages non workers and immigrants to belly up to their free s*** buffets.

    1. It’s been one yr since I left my old job and I couldn’t be happier now…. I started to work from comfort of my house, over a website I stumbled upon on-line, few hours each day, and my income now is much bigger then it was on my office job… My check for last month was $9k… The best thing about this work is that now I have more free time with my family…and the only thing required is simple typing and internet access… I am able to spend quality time with my relatives and buddies and take care of my babies and also going on holiday vacation along with them very routinely. Don’t skip this opportunity and try to act quickly. Here is what I do find out here

    2. After 5 years I decided to resign from my previous work and that decision was a life changer for me…. I started to work online, for this company I stumbled upon online, for a few hours /a day, and I profit now much more than I did on my previous job… My pay-check for last month was $9k… The best thing about this gig is the more free time I got with my kids…and that the only requirement for this job is basic typing skills and access to internet… I am able to spend quality time with my relatives and buddies and look after my children and also going on family vacation along with them very often. Don’t let pass this opportunity and make sure to react fast. Here’s what I do see this

    3. One yr ago I decided to resign from my last work and I never felt better in my life…. I started working from my house, for a company I stumbled upon online, for a few hours every day, and I make much more than I did on my previous job… My payment for last month was $9,000… Amazing thing about this job is that I have more time for my loved ones…and that the only requirement for the job is basic typing skills and connection to the internet… I am in a position to commit quality time with my relatives and buddies and look after my children and also going on family vacation along with them very consistently. Don’t neglect this opportunity and make sure to act quick. Check it out, what it is about… act now by clicking here

    4. It’s been 1 year since I finally abandoned my last work and that decision was a life-changer for me…. I started to work from my house, for this company I found over internet, for a few hours every day, and I earn much more than I did on my last work… My pay-check for last month was $9,000… Amazing thing about this job is that now I have more time for my loved ones…and that the only requirement for being able to start is simple typing skills and access to internet… I am able to spend quality time with my friends and family and look after my babies and also going on holiday along with them very consistently. Don’t skip this opportunity and make sure to act rapidly. Check it out, what I do… see detailed info right now

    5. It’s been 1 yr since I quit my office work and I am so happy now…. I started to work at home, for this company I found online, for a few hrs every day, and I profit now much more than I did on my previous work… My payment for last 30 days was $9k… Great thing about this gig is that I have more time to spend with my family…and the only thing required is basic typing skills and access to internet… I am in a position to enjoy quality time with my relatives and buddies and take care of my children and also going on holiday vacation with them very routinely. Don’t avoid this chance and try to act quickly. Here is what I do see important info

    6. I regularly make somewhere around $20,000-$21,000 every month through the net. After doing work so passionately, I ended up losing my job in my company where I have given so many years. I truly needed a reliable source of income. I am not into “get rich overnight” packages you see all over the internet. Those are all kind of ponzi referral marketing schemes where you are required to first make interested customers and then sell a product to friends and family or any person so that they will probably be in your team. Internet job provides amazing benefits such as I am always home with my family and friends and can cherish lots of free time and go out for family vacations. Here’s the most convenient way to start >>> https://kadvent.tumblr.com

    7. I most of the time gain nearly 6,000-8,000 bucks almost every 30 days through the internet. It is great to very easily substitute my past work income, precisely thinking about I just work around 20 hr each and every week at home.I dropped my job after operating for the same workplace for years, I wanted legitimate income, I was not checking out for the “get rich quick” home kits you actually see all throughout the internet. Those are actually pyramid programs or things where you need to sell to your neighbors and family members. I absolutely needed a reliable program to make a living for me and also my family. The best benefit of earning a living via internet is that I am always home with the the kids, I save a good amount of money. Seriously, it is much easier than you could expect, all that is needed is sign up a very simple application form to obtain front line entry to the Home Revenue Package. I got the instructional materials kit and within 4 weeks I commenced generating over 4,000 US dollars each and every month. The instructions are extremely easy, you do not have to be a computer expert, however you should be aware how to use the internet. If you can fill up forms and also browse internet sites, you can actually do it conveniently, You do not even have to sell anything and nobody have to buy anything. It is as simple as being on Facebook or twitter.Here’s the most convenient way to start ===> NICEST WORK!!!

    8. There are a variety of work-at-home job opportunities that already are available. And, in today’s entire world, there are more opportunities via the internet, and this emerging trend seems to keep going nicely in the future. Who would not desire to work-from-home on a part-time basis and earn thousands of dollars every month? It’s an offer the majority of people cannot or do not reject. So,today Let me tell you a superb online based job opportunity from which you could generate between 5k dollars to 10k dollars per month. Let me show you what i do… -> NICEST WORK!!!

    9. There are tons of online jobs that presently are in existence. And, in today’s world, there are many job opportunities online, and this craze is expected to prolong nicely in the future. Who wouldn’t desire to work from home on a part-time basis and earn thousands of dollars a month? This is an offer most people cannot or do not ignore. So,today Let me tell you an awesome working from home opportunity from which you are able to profit between 5k dollars to 10k dollars per month. Here is what i do ->->-> NICEST WORK!!!

    10. You will discover numerous home based opportunities that presently are in existence. And, in today’s entire world, there are many more opportunities via the internet, and this emerging trend is anticipated to prolong well ahead. Who would not prefer to work-from-home on a part-time basis and get paid thousands of dollars every 30 days? It’s an offer thousands of people cannot or do not refuse. So,today Let me tell you a terrific home-based opportunity from which you may earn between 5000$ to 10000$ every 30 days. Check it out, what i do… ====> SUPERB OPPORTUNITY!!!

    11. I basically gain approximately $6,000-$8,000 each month using the internet. I lost my job after working for the same organization for many years, I wanted reliable earnings, I was not interested in the “get rich quick” home packages you can find all over the net. Those are typical pyramid schemes or stuff where you have to sell to your friends and family members. I actually needed a reliable way to earn a living for me and my family. The greatest benefit of working on the net is that I am always home with the little ones and also enjoy lots of free time with my family members in various beautiful beaches of the world. All you need to do is submit a simple form to obtain front line access to the Home Profit System . You don’t have to be a computer whiz, but you should know how to use the internet. If you can fill up forms and surf websites, you can do it quite easily, You don’t need to sell anything and nobody has to purchase anything.Here’s the right way to get started->->->-> https://iplogger.org/2L8Cj5

    12. When you want to produce $6223 month-to-month by means of by using your own internet connection coupled with computer system then Let me tell you my practice. Two yrs back in the past I started getting work done in privately-owned business without earning effective pay check in respect to my difficult work. At that time a friend of mine told me to focus on home based internet business that you can do inside the home by utilizing on line world and desktop computer and most amazing thing about it it’s possible to do the business at any time we wish and get hold of the cash on per weekly base basis. It’s in contrast to a scam that you simply notice all over the web that guarantee to get you seriously rich in two – three days or so. At this instant after using this work opportunity for 24 months I can also declare that this is actually the most suitable internet based business I could get a hold of in consideration that by working on this project I am able to work whenever I want. When I was working thru private sector work I had been the inability to to get a chance to spend time with my household but now since two years I have been dealing with this web based profession and now a days I am finding delight in the leisure time with my friends at home or perhaps by heading off outside to anywhere I like. This role can be as really easy just as going through web pages and doing copy-pasting paste job that everyone is able to do >>>> sulfidegarlicky.allemal.de

  3. Look at the photo of the houses completely disintegrated down to their foundations while the nearby trees are untouched, still with their green leaves intact and ask yourself if you think that was a normal “forest fire”.

      1. Cars with their engine blocks melted while surrounding vegetation looks fine. And we’re supposed to believe that’s because too many Californians living in wooded areas and not following building codes. Yeah right.

  4. OR California could become like Puerto Rico where only the wealthiest or least damaged areas revive and continue and the damaged areas remain stagnant.

    (THAT basically is the current aftermath of PR’s bankruptcy.)

    1. Helps in PR that the IRS is deeming about 98% of the island an ‘Opportunity Zone’. Only Dorado Beach is excluded I believe. Should be positive both medium and long term for the island’s economic future.

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.