Wednesday, August 29, 2007

In New Orleans Hurricane Katrina is TWO!

August 29, 2007 marks the second anniversary of the disaster created by Hurricane Katrina upon the city of New Orleans, Louisiana. According to various news outlets, up to 60% of the Pre-Katrina population has returned to the "Big Easy". But only 40% of the Pre-Katrina Schools are open. Much of the city looks more like the Hurricane made land fall a week ago, not 2 years. Houses set abandoned, and people complain that their money hasn't arrived.

Any idea how much we (the Taxpayers) have spent on the rebuilding of New Orleans and the Gulf Coast damaged by Hurricane Katrina? For the answer we turn to Larry Kudlow's article (The Big Easy’s Billion Dollar Boondoggle) at the National Review on-line (NRO).
The grand total is $127 billion (including tax relief).

With damages estimated at $81 Billion in New Orleans and President Bush claiming today that the Federal Government has distributed $116 Billion to New Orleans, Why have we already spent $35 Billion more in New Orleans than the estimated damages? The rest of the Gulf Coast only received $11 Billion and the recovery in Mississippi and Alabama is proceeding much faster.
The entire GDP of the state of Louisiana is only $141 billion, according to the U.S. Department of Commerce. So the cash spent there nearly matches the entire state gross GDP. That’s simply unbelievable. And to make matters worse, by all accounts New Orleans ain’t even fixed!
So where did all that money go, and why do we still need so much more? What part did the "Chocolate City" Mayor Nagin play in the rebuilding? What about Governor Katherine Blanco and US Senator Mary Landreau? Presidential Candidates Hillary Clinton, Barack Obama and John Edwards are all insisting that we spend MORE money to fix New Orleans. What do all these Politicians have in common? They're DEMOCRATS.

More interesting stuff from Mr. Kudlow's article.
Meanwhile, according to an article by Nicole Gelinas at the Manhattan Institute, New Orleans has earned the distinct honor of becoming the murder capital of the world. The murder rate is 40 percent higher than before Katrina, and twice as high as other dangerous cities like Detroit, Newark, and Washington, D.C.
This is ridiculous. Why don't we pay the 300,000 residents instead of the Politicians? That's Larry's idea too. His math indicates each resident would have gotten $425,000.00 of our tax money. With this money they could have moved to someplace where the city is not below sea level. My math makes it more like $387,000.00, but that's still a lot of money for folks who have not yet seen any. In Mississippi they are recovering, but not New Orleans.
Think of this: The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government’s $127 billion check represents the quintessential failure of that liberal vision. Hillary Clinton calls this sort of reckless spending “government investment.” And that’s just what’s in store for America if she wins the White House next year.
What would have been the all around better solution? Here's Larry Kudlow's idea.
Right from the start, New Orleans should have been turned into a tax-free enterprise zone. No income taxes, no corporate taxes, no capital-gains taxes. The only tax would have been a sales tax paid on direct transactions. A tax-free New Orleans would have attracted tens of billions of dollars in business and real-estate investment. This in turn would have helped rebuild the cities, schools, and hospitals. Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.
From my perspective, that sounds like a sound idea.

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