Paying to Rebuild New Orleans

[RON430]

OK so we still don't have anyone with dry feet in NO and can't get a very good idea of the cost to rebuild in NO, let alone the rest of LA, AL, and MS. But the Feds are spending more per day in NO than they are spending in Iraq. Please don't hijack the thread by saying the solution is to get out of Iraq - start your own thread. I merely mention it to point out the magnitude of the spending and we haven't started rebuilding much yet. And the feds are now going to hand out debit cards with $2,000 on them courtesy of the taxpayers.

So the bill is going to come do and will almost certainly affect everything from tax rates to the federal deficit. The talking heads believed that Katrina would get the Fed to hold off as the impact on the economy is sorted out but the truth is that massive federal spending could well get the Fed to increase their rate increases. And the impact of higher energy is inflationary which also will have the Fed pull the rate increase trigger. So those of you with those ARMs could end up contributing to rebuilding whether you like it or not.

The comments were made today that disaster plans work from the bottom up, local authorities first, then the state gets called, and finally the Feds. The tendency being felt right now is that for rebuilding, the best plan is to skip right to the Feds. And in case no one is aware of it, when the Feds are hit up for money that means it is all us taxpayers that are ponying up. We are not only investors in our country by putting the management in, OK - as incompetent as they are we put them in, but we are also the bankers giving them the money that they spend or guaranteeing to pay whatever debts they incur.

If NO is rebuilt, you have to wonder if the people that left are going to be able to afford to go back. New housing better built will be more expensive. There should be local tax increases and bond issues to pay for improvements, just like we get everywhere else in the country. The costs of being a resident will be more as banks and insurance companies will want premiums to recover losses and protect against future problems. So do we all grin and open wide because it's the right thing to do or do we vote our own wallets?

[GRAND_LS 4]

Lets say that the rebuild is 100% successful. Who would insure property there? and who would move from thier city to NO since most of the current residents wont be able to afford the new housing?

[RON430]

Originally Posted by GRAND_LS 4

Lets say that the rebuild is 100% successful. Who would insure property there? and who would move from thier city to NO since most of the current residents wont be able to afford the new housing?

If they can give away debit cards with $2K on them they can provide subsidies to people moving in. Of course when I say "they" I mean you and I.

[RiverRat]

I was watching CNBC earlier today, and one man had a great idea. Rather than having Uncle Sam provide ALL of the funds to rebuild, hence putting us further in debt and increasing taxes for everyone else, etc, let the areas affected (that need to be rebuilt) remain a safe haven from taxes and other fees associated with building and business for X amount of years(5-10 presumably) . This will immediately attract builders, businesses, etc. to the area to start up, becaus taxes and fees are a signinficant cost of building and business. Not sure how this would actually play out if it were implemented (its never been done before) but it would be interesting to consider. After they fill the current town and raise the land back up above sea level of course.

[RON430]

Originally Posted by NYLexSC

I was watching CNBC earlier today, and one man had a great idea. Rather than having Uncle Sam provide ALL of the funds to rebuild, hence putting us further in debt and increasing taxes for everyone else, etc, let the areas affected (that need to be rebuilt) remain a safe haven from taxes and other fees associated with building and business for X amount of years(5-10 presumably) . This will immediately attract builders, businesses, etc. to the area to start up, becaus taxes and fees are a signinficant cost of building and business. Not sure how this would actually play out if it were implemented (its never been done before) but it would be interesting to consider. After they fill the current town and raise the land back up above sea level of course.

Does anybody think they should do anything to rebuild this area without serious improvements like building it back up to above sea level? Suspending taxes and fees may be a good idea but I hope someone with some brains determines what they are going to allow and how it must be built.

[Lil4X]

Originally Posted by RON430

Does anybody think they should do anything to rebuild this area without serious improvements like building it back up to above sea level? Suspending taxes and fees may be a good idea but I hope someone with some brains determines what they are going to allow and how it must be built.

Tax relief would be a good way to attract businesses back to the area - particularly those serving the port and even the tourist trade. IMHO it might be a good idea for the government who will be footing the bill for the improvements to sell the property to the investors and homebuilders, although I don't know anything about real estate law and abandonment in Louisiana. (The state's common law is based on the Napoleonic Code . . . you are guilty until proven innocent. This and other strange nuances render Louisiana law considerably different and often, quite the reverse of law in the other 49 states.)

I'm sure a whole new set of city codes, related to structure and property zones would combine with contemporary sanitary and electrical codes to produce a vital, modern city. It's not often that a city gets to enact new building codes wholesale. NO's leaders should take advantage of the opportunity.

Unbeliveable! the lights are coming back on in New Orleans tonight!

http://us.news3.yimg.com/us.i2.yimg....jEJie.G1GuEg--

[chicagoblknazn]

Hell naw.....why should we?

[RON430]

You know I have seen reports of people that can't wait to go back. But I have also seen reports of people (including yesterdays Wall Street Journal) saying they are going to take this opportunity to start over some place new and have no intention of going back. If it takes a year to clean the hazardous waste out and reconstruct, you have to wonder how many people are going to go back. So what kind of rebuilding do you do? And of course, who pays for it? My personal opinion is that there will be a lot of spending that we will not have a chance to vote on. And the deficit will increase. And interest rates will go higher. And they are certainly no longer going to look at tax cuts. The governator here is pretty good at not handling hot political issues but putting them on a ballot and letting everyone decide. But Washington doesn't run that way. But bellying up to the bar with an open checkbook for NO is just getting hard to swallow. I saw a news report while working out today from some lady in NO who had been told by her insurance company that she was out of luck because she had no flood insurance and her house was totalled by flood waters. It is really a shame but that is the way it goes as far as I am concerned. ***** happens. And it happens all the time. I know this sounds pretty insensitive but I don't think the real impact of this has set in yet. I think there are two refineries that are going to take a long time to repair and don't forget that I think the report was something like ten oil platforms missing. This short term gas and oil from Europe and elsewhere is not going to do much in ninety days. And gasoline, heating oil, and natural gas prices will just start climbing.

I don't want to drag another thread into this but there are some other threads by guys who have seen what happened in NO and are thinking about buying some self defense, i.e. guns. Like I said, I don't want to drag another thread into this but the point for me is that you set up to take care of yourself and your family and you turn to the gov as a last resort, not first. Being raised on the south side of Chicago didn't exactly have me ready for the Ivy League but I had parents that did the best they could improving themselves and their children and getting us out with a lot of hard work and doing without. So now I have a doctorate and started my own company 25 years ago. Not bragging but NO does have a massive problem and we are going to pay something to help them out. But I don't think they should expect everyone else in this country is going to bail out a city that was a disaster waiting to happen. They were warned. And there are now other stories coming out. In yesterdays Wall Street Journal they had a story about how the flooding happened and a major area was that industrial canal. And you know what? The Army Corps of Engineers had gotten a $600 million dollar program to improve the lock and other areas of that canal and started work on it. That was until the residents in the area, the same ones who got flooded out when the wall collapsed, filed a court order to have the work stopped because of the noise from the work. And they were never able to start back up. It doesn't make me want to rush in with with bushel baskets of money. Wake up calls can be a b*tch. So can waking up and taking responsibility for yourself and your family.

[chicagoblknazn]

Originally Posted by RON430

You know I have seen reports of people that can't wait to go back. But I have also seen reports of people (including yesterdays Wall Street Journal) saying they are going to take this opportunity to start over some place new and have no intention of going back. If it takes a year to clean the hazardous waste out and reconstruct, you have to wonder how many people are going to go back. So what kind of rebuilding do you do? And of course, who pays for it? My personal opinion is that there will be a lot of spending that we will not have a chance to vote on. And the deficit will increase. And interest rates will go higher. And they are certainly no longer going to look at tax cuts. The governator here is pretty good at not handling hot political issues but putting them on a ballot and letting everyone decide. But Washington doesn't run that way. But bellying up to the bar with an open checkbook for NO is just getting hard to swallow. I saw a news report while working out today from some lady in NO who had been told by her insurance company that she was out of luck because she had no flood insurance and her house was totalled by flood waters. It is really a shame but that is the way it goes as far as I am concerned. ***** happens. And it happens all the time. I know this sounds pretty insensitive but I don't think the real impact of this has set in yet. I think there are two refineries that are going to take a long time to repair and don't forget that I think the report was something like ten oil platforms missing. This short term gas and oil from Europe and elsewhere is not going to do much in ninety days. And gasoline, heating oil, and natural gas prices will just start climbing.

I don't want to drag another thread into this but there are some other threads by guys who have seen what happened in NO and are thinking about buying some self defense, i.e. guns. Like I said, I don't want to drag another thread into this but the point for me is that you set up to take care of yourself and your family and you turn to the gov as a last resort, not first. Being raised on the south side of Chicago didn't exactly have me ready for the Ivy League but I had parents that did the best they could improving themselves and their children and getting us out with a lot of hard work and doing without. So now I have doctorate and started my own company 25 years ago. Not bragging but NO does have a massive problem and we are going to pay something to help them out. But I don't think they should expect everyone else in this country is going to bail out a city that was a disaster waiting to happen. They were warned. And there are now other stories coming out. In yesterdays Wall Street Journal they had a story about how the flooding happened and a major area was that industrial canal. And you know what? The Army Corps of Engineers had gotten a $600 million dollar program to improve the lock and other areas of that canal and started work on it. That was until the residents in the area, the same ones who got flooded out when the wall collapsed, filed a court order to have the work stopped because of the noise from the work. And they were never able to start back up. It doesn't make me want to rush in with with bushel baskets of money. Wake up calls can be a b*tch. So can waking up and taking responsibility for yourself and your family.

Very well said, man. I totally agree with all your points.

[RON430]

By the way, in case anyone is interested, I found out that when you do a poll, the categories can only be 100 characters long. This is not a complaint! I think that is a perfectly reasonable limitation. But here are the categories as I originally wanted to put them up:

1. Yes, definitely. Raise my income and gasoline taxes. I don't care if interest rates increase either if it helps NO.

2. No, what are you kidding? If the Feds can't find the money out of the existing budget (cut medicare, student loans, school lunches, etc.) that's tough. Let the oil companies pay to rebuild the ports, refineries, and oil platforms. They are going to raise our prices anyway.

3. Maybe. Everything they can do without a vote, they will. If I get to vote on increased taxes, I will probably OK them.

4. Maybe. Everything they can do without a vote, they will. But if I get to vote on increased taxes, that's where I draw the line. No tax increases for me.

I tried to be "fair and balanced" as there are repurcussions from any selection. I sure wish I had a solution to this but unfortunately our 'elected officials' are going to address this and first and foremost they are concerned about getting votes. Secondly it looks like they are most concerned about how things appear on cable news. If they would start believing that the majority of us out here have brains and we know that there were and are agonizing tradeoffs to be made, life might be better. But watching the news, it sure doesn't appear that this is happening. I can tell you that our military saw what was going on with several beurocracies, in DC, LA and NO, and that General Meyers cut through the BS and told a bunch of 4 stars to work directly with Northern Command and do whatever needed to be done and that is when you started to see action. They were surprised that, exactly as in Iraq, their role was not to be behind city and state efforts but had to handle not only the support but the front line efforts as well. This was a disaster that most cities and states would have handled poorly but there is not enough mention of the abysmal preparedness and efforts from the city and state. Shame on them. And we will get around to DC as well. Having said that, MS and AL also received huge damage and in many places were well behind NO in receiving aid and no one their has shot at helicopters or cell phone repairman. To be clear, if no one is around and a store is for all intents and purposes abandoned, I have no problem with breaking in and taking food and water. But to have people on the news say they witnessed looters in NO break into Wal Mart and not get food and water but get guns and ammo and then break into the pharmacy for drugs, well I better not go on. I am a physicist and business man and I can tell you that you can't solve a problem until you admit you have one. And the people of NO have more problems than Katrina and flood. End of rant. But it does affect my willingness to get a tax increase to rebuild the place. Like bit, I never saw much there to like anyway.

[Lil4X]

Let's think about this rebuilding project for a minute. Although it gets a little too close to FDR's WPA projects of the depression era, overall the rebuilding of the levees, providing better drainage, and possibly raising parts of the city might be beneficial to the region.

First, federal/state money spent in the effort isn't simply burned up. It purchases heavy construction equipment, fuel, and maintenance. It pays wages that go back into the local or regional economy via the work camps. It goes to the engineering and construction companies that will design and oversee the project, and from there, it goes into the nation's economy. Re-circulating the money, 'round and 'round through the economy leverages the investment on every pass. Everyone eventually benefits - grocers, clothing stores, and housing benefit. Tax revenues increase as the local, school district, state, and federal level result from more workers earning more money, re-supplying the coffers of government with a good portion of the expenditure. In time, increased employment, offering more and better jobs could be the best remedy for this economically depressed area.

John Maynard Keynes, the English economist was the spiritual father of the "New Deal" that FDR used to expand the economy out of the Depression by growing demand. This was done with a little deficit spending at the beginning that would reap huge rewards as this federal spending "primed the pump" of our great economic engine. The result was greater prosperity for all. A later generation would call this by the less-elegant name, "Reaganomics".
________________________________

The social consequences of this project could be even more dramatic. For a hundred years, the poor have gravitated toward the "Big Easy", first for the unskilled jobs available in the port, then for the abundant welfare that created a permanent underclass and a corrupt political machine to deal out the dollars. These people are gone, having left the city for higher ground. Those that return for the jobs will self-select themselves right into the mainstream economy. Those that don't will become a burden on someone else's economy, clearing out the deadbeats and welfare slackers from the city and lifting the tax burden they imposed on many levels of government. In time, the corrupt political machine will implode - as welfare dries up and the thousands of jobs that "administered" it disappear.

In fifty years, despite the horrible tragedy, loss of life and destruction, Hurricane Katrina may prove to be a blessing.

[WhiteTiger]

Thanks for further explaining your choices Ron, No. 2 is my choice.

Originally Posted by RON430

2. No, what are you kidding? If the Feds can't find the money out of the existing budget (cut medicare, student loans, school lunches, etc.) that's tough. Let the oil companies pay to rebuild the ports, refineries, and oil platforms. They are going to raise our prices anyway.

Although Lil$x makes some good points, knowing how inefficient our Gov't can be at times is scary and most likely they will miss boat in some way, shape, or form.

[RON430]

Originally Posted by Lil4X

Let's think about this rebuilding project for a minute. Although it gets a little too close to FDR's WPA projects of the depression era, overall the rebuilding of the levees, providing better drainage, and possibly raising parts of the city might be beneficial to the region.

First, federal/state money spent in the effort isn't simply burned up. It purchases heavy construction equipment, fuel, and maintenance. It pays wages that go back into the local or regional economy via the work camps. It goes to the engineering and construction companies that will design and oversee the project, and from there, it goes into the nation's economy. Re-circulating the money, 'round and 'round through the economy leverages the investment on every pass. Everyone eventually benefits - grocers, clothing stores, and housing benefit. Tax revenues increase as the local, school district, state, and federal level result from more workers earning more money, re-supplying the coffers of government with a good portion of the expenditure. In time, increased employment, offering more and better jobs could be the best remedy for this economically depressed area.

John Maynard Keynes, the English economist was the spiritual father of the "New Deal" that FDR used to expand the economy out of the Depression by growing demand. This was done with a little deficit spending at the beginning that would reap huge rewards as this federal spending "primed the pump" of our great economic engine. The result was greater prosperity for all. A later generation would call this by the less-elegant name, "Reaganomics".
________________________________

The social consequences of this project could be even more dramatic. For a hundred years, the poor have gravitated toward the "Big Easy", first for the unskilled jobs available in the port, then for the abundant welfare that created a permanent underclass and a corrupt political machine to deal out the dollars. These people are gone, having left the city for higher ground. Those that return for the jobs will self-select themselves right into the mainstream economy. Those that don't will become a burden on someone else's economy, clearing out the deadbeats and welfare slackers from the city and lifting the tax burden they imposed on many levels of government. In time, the corrupt political machine will implode - as welfare dries up and the thousands of jobs that "administered" it disappear.

In fifty years, despite the horrible tragedy, loss of life and destruction, Hurricane Katrina may prove to be a blessing.

Interesting, almost philosophical points raised. The truth is I probably jumped the gun with this poll but I would guess there won't be a lot of interest in ninety days. CNBC did a pretty interesting story today from Fema City in Punta Gorda, FLA. They are a year after their hurricane and they are about 30% rebuilt. Fema City is the name for a large, as in hundreds, trailer park where people are living in Fema supplied trailers. Destitituion, crime, and despair are pretty rampant talking to the residents. What will the future hold for NO? Will hundreds and hundreds of billions of dollars spent have long term economic and social benefit? Will the ultimate benefits for NO come at the expense of an economic slowdown, increased inflation (many things other than the price of gas), and increased interest rates for the rest of us? Who knows. If you were to ask Keynes is society better served by the recovery from a disaster or by never having the disaster in the first place, what would he say? More stories are coming about how this unfortunate tragedy unfolded and I, for one, cannot accept the notion that unlimited resources should be devoted because whatever and however we spend, there will ultimately be tangible and intangible benefits. Also according to CNBC this morning, the New Orleans is one of the most corrupt in the nation and hasn't had an audit since 2001. They finally hired an outside company to sort out the mess but Katrina may have permanently ended any hope of ending the corruption and misappropriation of funds in the NO school district. Give them a blank check? Well, the poll votes, limited as they may be, seem to be answering that question.

Still would like to thank those that have voted and posted. This is a tough issue at a tough time and my poll could have started off some nasty posts. But at least here we have some folks thoughts captured at this point in time. What we will all think in three, six, twelve months, or longer is anybody's guess. One thing we can all be thankful for is that NO has had spectacular weather since they were hit. If you think hot and sunny are the worst they could get, think about Fla last year. Even moderate thunderstorms could dump enough rain into the city bowl and stir up waves causing more levee failures that would have complicated things tremendously. Let's hope their luck doesn't run out at least until somebody can find the courage to get those last holdout survivors out. How many more times do you risk police and National Guardsman going back into that toxic sludge to "talk" people, that they have already visited numerous times, out? To hear one of their police officials justify these multiple visits to get the same people out with the fact that no one has gotten sick yet just goes to point out why NO's hurricane preparedness was criminally negligent, also IMO only.

[Vegassc400]

Originally Posted by WhiteTiger

Thanks for further explaining your choices Ron, No. 2 is my choice.

Ditto choice 2.