• This is a partial transcript from "Your World with Neil Cavuto," August 30, 2005, that was edited for clarity.

    NEIL CAVUTO, HOST: Forget insurance. My next guest says not one taxpayer dollar should go toward rebuilding the city of New Orleans (search).

    Joining us now is Jack Chambless. He is the economics professor of Valencia Community College in Orlando.

    Professor, why do you say that?

    JACK CHAMBLESS, ECONOMICS PROFESSOR, VALENCIA COMMUNITY COLLEGE: Well, if we look at Article One, Section Eight of the United States Constitution (search) — and I encourage all Americans to look at that before we start opening up our tax coffers to pay for all of this — we have every obligation to provide for New Orleans in terms of charity, private charity from one person to the other.

    But the founding fathers never intended, Article One, section Eight of the Constitution, never intended to provide one dollar of taxpayer dollars to pay for any disaster or anything that we might call charity. What we now have is the law of unintended consequences taking place, where FEMA (search) has come into New Orleans, a place where, ecologically, it makes no sense to have levees keeping the Mississippi River (search) from flooding into New Orleans, like it naturally should.

    Now with FEMA bailing out Louisiana, bailing out Florida and lowering the overall cost of living in these places, we have people with no incentive to leave. And the law of unintended consequences means that more people are dying with every one of these storms. They're becoming more and more expensive, more and more property loss, just because the federal government has violated the Constitution to provide for these funds.

    CAVUTO: Yes, but, Professor, if you have your way, then, these areas will just be the domain of the well-to-do, right?

    CHAMBLESS: No, no, not at all.

    I mean, people of modest means lived in the Bayou, they lived along the coast of Florida long before the government got involved. But they assumed personal responsibility for their decisions. They paid for insurance. They paid the market premium for insurance.

    CAVUTO: Yes, but those insurance companies, Jack, have left. They're not insuring these people anymore, right?

    CHAMBLESS: Some of them have left. I'm a resident of Florida. We still have insurance in the state of Florida. It's become more expensive.

    CAVUTO: No, wait. To be clear, I know your state well, and there are some areas where that is simply not offered.

    CHAMBLESS: Right. But that's part of the cost.

    You shouldn't have to compel the insurance companies or force them. They are a private for-profit business. If they believe the risks are too high and the probability of incurring losses are too great, nobody should force them to underwrite policies there. But, if we look at what the insurance companies are also doing, in a way, they're able to free ride off of the taxpayers, because they're not responsible for flood insurance.

    CAVUTO: Well, it's a good point.

    But let me ask you, though. I mean, if you had things your way, if and when we have future disasters, including in your home state of Florida, where this frequently happens the government will assume no responsibility. No one will assume any responsibility. Insurance companies, the way they are now, are not assuming responsibility, for the most part. So, you're gouged, right?

    CHAMBLESS: No, not at all.

    Last year, Americans gave $240 billion to charity, which is far more than the economies of many Western European countries. Between charity and between people making rational decisions about where they would like to live and buying insurance if they can afford it, you will still have people living in these areas.

    CAVUTO: OK. Jack Chambless, thank you. It's an argument we don't hear often espoused.

    CHAMBLESS: Thank you.

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