Tuesday, January 24, 2006

The finest city other people's money will buy

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The finest government other people's money will buy
The finest government other people's money will buy, part II

This AP article "On Gulf Coast, Dreams of New Kind of City" illustrates the sole problem of government funding to rebuild New Orleans: that it's at all funded by government, meaning tax dollars coerced from everyone else. A few weeks ago, I read an article about plans to expand certain parts of the city once it's rebuilt, with new buildings and the like. Is that why we're giving so many billions, so that New Orleans can become what it always wished it could be, at everyone else's expense?

While my heart goes out to people who have lost their homes, the lofty plans for the money negates any "charitable" intentions in the federal government taking from most people and giving to a relative few. Need we remember how the federal government gave millions to each of the 9/11 victims' families, which the family members then used for luxury item shopping sprees? And, of course, the $2000 debit cards to Katrina victims, some of which were used on designer handbags and at strip clubs.

Let's figure U.S. GDP in 2006 at a conservative $13 trillion, and the population at 300 million. Let's also say that the initial $62 billion from the federal government (courtesy of the rest of us) in post-Katrina "relief" is spent just on New Orleans. The city's pre-Katrina population was about 1.3 million, so 0.433% of the population will get 0.477% of a year's GDP. I doubt that New Orleans contributes to the American economy to such an extent, but even if it does have that kind of wealth, it should then use its own resources. If it cannot, then like individuals, it should rely on the true charity of others.

Worse, New Orleans has perhaps 200,000 people (maybe less). Even if the population returned to half a million, we're now talking 0.167% of the total U.S. population that uses government to coerce 0.477% of a year's GDP from everyone else (all 99.83% of us). Furthermore, the $62 billion is likely to be just a down payment. Indeed, $250 million was one figure thrown around early on, which would be 1.92% of U.S. GDP in 2006.

Charity is one thing, but it's flatly immoral to rebuild your city at everyone else's expense, just because you feel "entitled" after a natural disaster. Sympathy, and the freedom to judge whether the intended recipient really is worthy and needs how much, are key to effective charitable acts. It is lost, however, on politicians and bureaucrats whose very game is to play with other people's money.

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6 Comments:

Blogger Mike said...

Here's the worst part: what are we going to do when it happens again? Contrary to the CW, Katrina was a Cat 2 when it made landfall in Mississippi, while NO only saw borderline Cat 1-2 winds. The levees were supposedly built to withstand a Cat 3 Hurricane, which they obviously did not. If that is what happens when a Cat 1 hits, what happens when the true doomesday scenario (Cat 4-5) slams into NO?

More importantly for this discussion, why the hell are we rebuilding a city that still sits on vulnerable ground? My personal feeling on the subject is that reconstruction should be very very limited until we have solid levees built. If NO is truly worth redeveloping, we should be able to get some private individuals to put up money to support the levees in order to protect their investments.

If not, well, then the writing would be on the wall, or levee in this case, so to speak...

Tuesday, January 24, 2006 1:34:00 AM  
Anonymous Jamie said...

Perry,

I will agree that New Orleans and her politics have not always spent federal dollars in the most efficient manner, however, your ignorance makes me dismiss your entire rant. $2000 dollar debit cards? Why didn't I get one of those!? FEMA did direct deposit money into the accounts of those that qualified for rent and transportation and The American Red Cross did hand out debit cards to again, those that qualified. If a strip club accepted these debit cards, shame on them. If individuals chose to spend there money on ridiculous items and sit around waiting for another handout- shame on them, but you will find those types in any city. My favorite part is that you honestly think that rebuilding this city doesn't benefit anyone but those that chose to return. I find this hilarious since we used to make over 15 million dollars a day off of people that didn't live here. You are a joke. You should read this and form a better informed opinion.

www.nola.com/news/t-p/editorials/index.ssf?/news/content/editorial112005.html

Tuesday, January 24, 2006 5:31:00 PM  
Blogger Perry Eidelbus said...

Mike, as you can see, the joke is how people like Jamie think. By itself, their desire to coerce property from others is meaningless. However, they find enough sympathy from politicians who ignore the Constitutional limitations on government. Jefferson feared such a thing when he advised, "In questions of power, then let no more be heard of confidence in man, but bind him down by the chains of the Constitution."

I think back to my teenage years, when my parents exercised great control over my savings account. My father was far wiser than I took him for, because he knew I'd discover the ease of spending a large quantity of money that others had earned. That's exactly what's happening in New Orleans with people like Jamie.

Jamie, you ignore the fact that there are always "cheaters" when it comes to government social spending. You ignore the fact that you're using the power of government to force the rest of us to give you money.

You complain that you never got a debit card. I ask this simple question: why do you feel so "entitled" to my earnings? Is it because you think you benefit the rest of the U.S. economy so much? While not mitigating that you do, I point out it's far from the extent you seem to think. Your figure of $15 million a day couldn't even be called pocket change when compared to the total U.S. economy. At about $5.4 billion annually, it's 0.042% of 2006 U.S. GDP. Perhaps you need to learn the difference between a million and billion?

You would have the rest of the nation give more of our earnings to people we would never willing help to such an extent. You would have the rest of us forego rebuilding our own deteriorating infrastructure (especially portions that are far more important to the country than your city), and all because you can use the power of government to coerce the rest of us. That's what it comes down to.

Tuesday, January 24, 2006 7:16:00 PM  
Blogger Perry Eidelbus said...

An additional thought, Jamie. You may not have seen enough of my blog to know this, but I support a full dismantling of the welfare state. Full and for everyone. My father used to criticize social programs that benefited non-citizens. He said, "Citizens only." Actually, even citizens should never have such a benefit to fall back on.

Private charity is the only way to go. If the rest of the population won't assist you to the extent you want, there's a damn good reason for it. They can't afford it themselves, because they have needs of their own, or they simply don't want to because they believe you can work and don't need that much "help." "But people don't know there are those who need help" is no excuse at all for using government's coercive power to pick other's pockets.

Every time the federal government gives you another handout, that's less money for the rest of us, money that we earned. While I am not unsympathetic to what you paint as your plight, I remind you that every check you receives means another family must spend less on food, entertainment, their own housing, the cars they drive, and so on.

Tuesday, January 24, 2006 7:26:00 PM  
Anonymous Anonymous said...

You leave out a few things in the GDP to people ratio. New Orleans is a port of entry for a lot of goods. The impact of not rebuilding NO and relocating port facilities has a cost. Another is the oil refineries down river of New Orleans. If New Orleans is not rebuilt, are these refineries viable or at what additional cost keeps them viable? To me, the comparison of GDP/population to rebuilding cost is very simplistic and doesn't measure the cost of not rebuilding.

Tuesday, January 24, 2006 9:56:00 PM  
Blogger Perry Eidelbus said...

It's a simplistic comparison, yes, but not overly so. New Orleans still is not so critical to the U.S. economy that rebuilding efforts should command many, many times per person what it contributes to the national economy.

Regarding the ports and refineries, I doubt that situation will change too much. However, it would hardly cost all those billions to keep them operating as they have been. At least the refineries would be the private responsibility of the oil companies, not taxpayers.

There's a cost to using other cities, but does that justify spending untold billions "to get things back the way they were"? While using another port may cost more than what you spent before less, it could well be less overall, when you factor in the cost of rebuilding. It's the equivalent of not wanting to pay $1 more at another store, but you'll contribute $2 to your regular store so it can rebuild and sell you the item at the same price. You will incur a higher cost either way, so you need only pick the lesser one.

Is New Orleans really worth $250 billion, when other cities are in dire need of that money? Remember that the transportation bill of 2005 was $286 billion, and it's regarded as a behemoth that gives something to every Congressional district. How about the $250 billion in millions of small quantities, taken from families that would have spent it on what they needed?

It's just so easy to get what you want when it's other people's money, and easy to justify your spending.

Tuesday, January 24, 2006 11:08:00 PM  

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