Question

From a budgeting perspective describe in 2-3 pages, how do you believe government can respond to a natural disaster in their community? Can you budget for it? Where do you get the money to respond to the disaster?

Answer 1

The budgeting for disasters includes the creation of funds for using at the time of disasters like natural calamities in the economy. It is the responsibility of the government to plan for the disasters for the long term well being of the country. The budgeting requires the maintenance of funds to be available for relief and recovery from the catastrophic event.

Disaster in the country results in the loss of resources, people and wealth of the country. The budgeting for the disaster includes ex ante budgeting and ex post budgeting. Ex ante budgeting includes the collection of funds before a disaster. Ex post budgeting is the estimation of losses after the event has occurred.

The government has different policies to respond to the disaster. The financial assistance is provided for the disasters from the government funds which are created by increasing the national savings. It is difficult for the government to provide the assistance directly to the people affected from the disaster. The main responsibility of rescue and rehabilitation lies with the state government. In addition, the central government provides the financial support as required. The support of the central government is dependent upon the severity of the event, and the scale of relief operations. The armed forces are called by the government to intervene for the situations which are not under the control of the civil administration.

FEMA, has the pool of money for disasters which is equivalent to the average annual cost of past disasters. When hurricanes hit the USA, FEMA approached the Congress for emergency supplemental funding. Sometimes, when the government has not properly planned for the disaster money, there are delays in approvals for the necessary funding amount.

The disaster may be funded from the Disaster Relief Fund via federal budget and the high amount of reserves is required to be built which may support the disasters. The government should also fund the FEMA’s budget for disaster funding.

The budgeting for disaster should not be done on the basis of the past averages. The federal government underestimates the cost of the catastrophes. The same has failed when the hurricanes hit the USA. A high level of funding is required to be maintained to be prepared for the disasters.