This is a RUSH transcript from "The O'Reilly Factor," November 1, 2012. This copy may not be in its final form and may be updated.
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O'REILLY: "Stossel Matters Segment" tonight, it is estimated the damage caused by Hurricane Sandy will be between -- ready -- $30 billion and $50 billion. And much of that will be picked up by the taxpayer? Our pal John Stossel says that is not good. He joins us now.
So about 20 years ago, you know a little beach house, the lavish beach house on West Hampton Beach out on Long Island and it got swept away by a hurricane, right? Right? Gone. Totally gone.
JOHN STOSSEL, FOX NEWS ANCHOR: Totally gone.
O'REILLY: I think we have pictures of that. Do we have pictures of that we can put up there.
So Stossel's house just floats out to the sea, 20 years later that same area got hit hard and you say, what?
STOSSEL: I say the government should stop insuring areas like that and people like me who are stupid enough to build on the edges of oceans.
O'REILLY: So you say -- that's not Stossel's house. I thought we had picture but I made a mistake. You say that if you buy a waterfront property that nobody -- what if nobody wants to insurance you. I mean what is that?
STOSSEL: Then you take your own risk. And the private insurance market is saying they're not in a risky place. So don't build there.
O'REILLY: All right. So you say nobody can live near the water then?
STOSSEL: No, anybody can live near the water.
O'REILLY: But you can't get insurance.
STOSSEL: Well, then take a risk with your own money. But don't ask the taxpayer to cover you.
O'REILLY: How much did the taxpayer cover you when your house got swept away?
STOSSEL: It was about $250,000. And at the time that covered the whole cost of the house.
O'REILLY: So FEMA, was it FEMA money that you got?
STOSSE: It was FEMA money. I -- I said to my father --
O'REILLY: All right, did you cash your check?
O'REILLY: Do you feel bad about that?
STOSSEL: Yes, I do. I won't do it again.
O'REILLY: Should you give -- should you give $250,000 back to the -- to the government?
STOSSEL: I give more than that to charity. I'm not going to give it to the government it will waste it.
O'REILLY: So that's true. And that's my beef, too.
So, you say that if you're in any kind of -- like Malibu, California, maybe you are up on the hill but that's a fire zone. So, if you are in any kind of zone that may be risky, the government should say hey, you're on your own and if you can find an insurer who is going to do it for exorbitant price that's all right but if you can't that's tough.
STOSSEL: Exactly. And the private insurers are experts in figuring out what's a good risk. That's information that the government obliterates by saying oh we don't want anyone to lose. So we'll cover you.
O'REILLY: Yes but they cover you with a high rate. I mean, they are not giving you a bonus on this. If you have to buy insurance if you have a beachfront property you're paying it.
STOSSEL: Well from the government?
O'REILLY: Yes, you are not paying a lot of money.
STOSSEL: Well but they are not paying the real cost. Because otherwise, the flood insurance plan wouldn't be billions in the red.
O'REILLY: But you are paying more than you would to a private company if you have to buy FEMA insurance, the government insurance. I had to do it a couple of times and I know.
So now you have a lot of rebuilding. President Obama is out there with Chris Christie and they are best friends now. And they are sharing ice cream cones. And -- and -- but the government has an obligation, I think to rebuild New Orleans and Katrina and to rebuild New Jersey, do they not?
STOSSEL: They do not. They have an obligation to get out of the way so you can rebuild if you want and provide roads and infrastructure.
O'REILLY: Who is going to do that though?
STOSSEL: Free people who choose to do that.
O'REILLY: So a storm or an earthquake or a tornado rips apart a town and you say the government shouldn't help out at all?
STOSSEL: The government should keep the peace, make sure there is no looting.
O'REILLY: But no rebuilding money at all?