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Friday, September 30, 2005

 

The Worth of Katrina

Once upon a time, I questioned whether the federal government's injection of some $6.7 million dollars to the rebuilding of New Orleans was justified because I questioned whether or not there were any positive externalities in having this city up and running. Indeed, I questioned whether or not there were any positive externalities in having any city (other than the one I live in) reconstructed and conducting business as usual. Since the government has seen fit to subsidize the cost of reconstruction, the powers that be must see some positive externalities... right?

Before I continue, I would like to question whether or not it is an imperative for DHS (Department of Homeland Security) to ensure the reconstruction and maintenance of the highway system there - wouldn't the interstate be considered "critical infrastructure"? If so, then this cost clearly lies with the federal government... and with this taken care of, it might be easier for state and local governments to make their currently-displaced taxpayers' money go a little further in funding the secondary roads.

I think that the positive externalities in the reconstruction effort lie more in preventing the "bads", should New Orleans be left as it is. Some that I can think of right away are 1) clearing up the filth to prevent (or slow) the spread of pestilence and disease, 2) encouraging businesses and individuals to resume productivity, and 3) returning children to their regular schedules to begin their healing processes. Some may argue the last point, but I tend to think that the concerns one generation out are fairly immediate.

Another issue that I consider, mostly because my 13 year old daughter has let me know that she thinks about this since 9/11, is that the children are watching. They are watching to see how the nation (governmentally and ecumenically) works together to ease the burden of disaster. As she asked, "If the government won't be there for the people when it is most needed, then why bother paying taxes? Why vote? What good is government, anyway?".

To uphold property rights? Is that the best we can expect?

Comments:
"To uphold property rights? Is that the best we can expect?"

For a while after Katrina, state and local governments, whose responsibility it is to protect property rights in our federal system of political economy, didn't do very well at this role.

To answer your second question, you may want to stay tuned for our study of public choice economics next semester.
 
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