Today, a couple of stories came out about the effect of Katrina on the economy.
The first, which was originally reported in the Wall Street Journal, was that it is now estimated that the tab for rebuilding could top 200 billion dollars. Given that the conservatives in Congress and the administration saved less than a couple of hundred million (0.1 % of that) by four years of cutting budgets for improving drainage and other flood related projects, this doesn't even make economic sense.
The second is a projection by the Congressional Budget Office that Katrina will cost 400,000 jobs and reduce the national economic growth rate by 1%. Given the already sluggish rate of growth in the Bush economy, this is not good news at all. Certainly these new unemployed will be a drain on both state and Federal resources, especially in the southeast. Prices for heating fuel, groceries and energy will spike upward this year.
So, we are now stuck with: a record deficit (mainly due to the massive tax cuts early in the Bush administration, which failed to create any new revenue, but merely put us in hock to the Chinese, who are holding the notes on all that new debt), a war that is going nowhere but has cost us a quarter trillion already, and a similar dollar cost due to a disaster that could have been avoided. Last years Medicare drug bill that is scheduled to send hundreds of billions more in corporate welfare to the pharmaceutical companies only makes this picture worse.
Under the circumstances, it would be prudent to ask Americans to share in the sacrifice. In fact, it is already the only time in history that we have ever cut taxes during wartime, and with the huge costs ahead, it is time to consider raising taxes (at least repealing the ruinous cuts) so that we can at least try to move towards a balanced budget. The failure of the flood control levees shows what can happen if you try to trim the deficit with reckless budget cuts. In fact, FEMA and other agencies have been victims of Republicans' single minded fixation on dismantling, parting out and weakening the Federal Government until it is ineffective (well, except for the police agencies of the state, they have strengthened those).
But, what do conservatives want to do? Well, Americans for Tax Reform (Grover Norquist's group) wants to cut taxes some more on the wealthy. In this case, the inheritance tax, which very few Americans even pay, and which many of those who would pay it, from Warren Buffett to Bill Gates Sr., are opposed to getting rid of. And they even make the point in the memo that they don't want Katrina to get in the way of their repeal of the inheritance tax.
If Republicans can't see now how their policies are hurting the countries, it is time to sweep out their tired old philosophy and replace it with a philosophy that believes that the government should be made effective so it can serve the public.