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New Orleans was one of the cities greatly affected by Hurricane Katrina. Subsequent efforts to rebuild the city back to its initial state have proved much expensive and a real burden to the citizens. The estimated cost for the refurbishment of New Orleans is expected to be about $200 billion.
The biggest compromise is whether the government should go ahead and spend this huge sum or this same amount should be given to the residents. I do object to the idea of spending hugely to rehabilitate the city, and as the economist, Ed Glaeser pointed out; New Orleans should be allowed to fail without being bailed out (Glaeser 2007).
Ed Glaeser’s Argument is indeed true, especially when evaluated from an economical point of view (Glaeser 2007). For instance, insurance policy states that once insured the property is damaged, the owner of such a property is entitled to cash reimbursement. The owner will then decide to either repair or replace the same property. Finding an alternative investment may also work out as is in some circumstances.
The government, in this case, intends to rebuild New Orleans as an insurance measure against the destruction by Hurricane Katrina. It will be wise for the government to give residents vouchers so that they decide on what to do with the cash. This will open up new economic ventures for those who might be still willing to do business in the city as well as provide initial capital for others who may opt to invest elsewhere outside New Orleans.
The current poverty levels in the city of New Orleans are also a factor to go by in evaluating the government’s intention to rebuild the city. It is clear that the city was a major economic hub when water transport was largely exploited in the United States of America. The port by then provided employment to multitudes and exploitation of alternative means of transport and introduction of containerization has greatly cut down such employment rates.
The estimated annual per capita income of the city is less than $20,000 (Glaeser 2007). This implies that more effort should be channeled towards economically empowering the residents to raise their living standards than spending to reinstate the city’s infrastructure. Thus, giving cash vouchers to the residents will act as a major life-changing moment for the residents.
Rebuilding New Orleans does not successfully guarantee economic recovery of the city. However, it will be a big waste to invest such a huge amount of money in a project that will do little to change the people’s overall lifestyle, and status and such a move will be a big economic failure.
The best viable solution to the current state of the city is one that targets the living standards of the residents than the general infrastructure of the city. A lot of money may be spent into the overall processes to reinstate the infrastructure that will serve an aesthetic value rather than an economic one (Germany 2007).
It is absolute that rebuilding New Orleans is not an economic activity at all. The hefty expenditure by the government to sustain this process can be directed into more practically viable projects to economically empower the residents. One such approach advocated by economists is to give vouchers to residents and allowing them to spend the money in ways they deem beneficial.
Works Cited
Germany, Kent. New Orleans after the Promises: Poverty, Citizenship and the Search for the Great Society, New York, NY: McGraw, 2007. Print.
Glaeser, Edward, “Should the Government Rebuild New Orleans or Just Give Residents Checks?” The Economists Voice 2.4(2005): 1-7. Print.
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