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The Economists' VoiceTop Economists Take On Today's Problems$
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Joseph Stiglitz, Aaron Edlin, and J. Bradford DeLong

Print publication date: 2011

Print ISBN-13: 9780231143653

Published to Columbia Scholarship Online: November 2015

DOI: 10.7312/columbia/9780231143653.001.0001

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Should the Government Rebuild New Orleans or Just Give Residents Checks?

Should the Government Rebuild New Orleans or Just Give Residents Checks?

(p.209) Chapter 24 Should the Government Rebuild New Orleans or Just Give Residents Checks?
The Economists' Voice

Edward L. Glaeser

Columbia University Press

This chapter asks whether it would have been better, after Hurricane Katrina, to give residents of New Orleans individual checks rather than spending federal money on rebuilding the city, a place of high unemployment and low incomes, which has been in economic decline since its heyday in 1840. One hundred billion dollars of federal spending would have amounted to a life-changing $200,000 for each resident of a city where the average yearly income pre-hurricane was $20,000. Giving checks to impacted residents, who then will move to Houston or Atlanta or Las Vegas, will actually reduce the negative spillovers from dysfunctional neighborhoods. None of this means, of course, that New Orleans's port or its pipelines shouldn't be rebuit. But rebuilding this basic infrastructure does not mean rebuilding the entire city, and it does not necessarily require federal funding.

Keywords:   Hurricane Katrina, government spending, disaster insurance, New Orleans, infrastructure

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