Rebuilding After a Disaster - Island of Sanity

Island of Sanity

Taxes & Spending

Rebuilding After a Disaster

I'm writing this in September 2005, about a weak after hurricane Katrina demolished New Orleans. The federal government is discussing plans for rebuilding the city. The government has already spent about $50 billion on disaster relief efforts, and is pledging to spend $150 billion more.

Now let's try some arithmetic. Before the hurricane hit there were about 490,000 people living in New Orleans, in 180,000 households. Of course the hurricane was not bound by the city limits. I don't have statistics on the total number affected, but let's suppose it might be as high as double that, say 1,000,000 people in 400,000 households. So federal disaster relief and rebuilding efforts will cost at least $200,000 per affected person, or $500,000 per household.

Let me offer a simple suggestion to cut the cost of this rebuilding effort in half while greatly improving the end result. Instead of the feds spending $500,000 per family on relief and recovery, how about if they simply give each affected family a check for $200,000. Let's assume it costs the government another 25% to do the paperwork. That would bring us to $250,000 per family, or half the present planned expenditure.

With $200,000, surely each family could fly first class to anyplace in the country they like, and stay in a nice hotel while they have a new home built. In most of the country $200,000 would buy quite a nice house; at the very least it would make a good down payment. Anyone who had a house worth much more than $200,000 probably had insurance. If not, one could well argue that it is not the taxpayers' responsibility to rebuild their mansions for them just because they were unwilling to pay the cost of insurance themselves: I'm happy to pay to get people into decent housing, but I think they should pay for luxury themselves. Those who want to rebuild in New Orleans could pool a portion of their money for the big clean-up jobs. Or we could just leave it to the big corporations with facilities down there to do the big clean-up jobs.

Or if you're a liberal and so don't trust people to use the money wisely without a big organization to run their lives for them, how about giving the money to the Red Cross, the Salvation Army, and Habitat for Humanity. Surely with $200,000 per family they could do an excellent job of resettling people.

© 2005 by Jay Johansen


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