Roy and Daren,
I did not take Paul’s question as
either predictive or normative, but simply as descriptive. Given the
desire to spend, the way to spend responsibly is to cut other spending.
Katrina is obviously a spending priority and as such should be funded
before other objectives. This does not address whether the spending is
worthwhile nor does it address the reasons for the spending.
Yes,
the best way to prevent such disasters is to limit government bailouts
of known risks and thereby eliminate moral hazard. There is no need for
any level of governmentto pay for the rebuilding or repopulation of New Orleans.
Moving from policy and politics to strict economics, is a levee a
public good? If not, how does it receive payment? Lighthouses might be
a good comparison for this discussion.
