Must be a Krugman follower. Don't forget to add the multiplier effect of the DEAD to the equation. I am beginning to loath liberal economists.
Economy
Rebuilding Efforts to Give Economy a Boost
By Peter Morici
Early estimates of the direct damage caused by Hurricane Irene are in the range of $7 billion. Add to those the loss of about one or two days economic activity, spread over a week across 25 percent of the economy, and an initial estimate of the losses imposed by Irene is about $25 to $30 billion.
However, rebuilding after Irene, especially in an economy with high unemployment and underused resources in the construction and building materials industries, will unleash at least $7 billion in new direct private spending -- likely more as many folks rebuild larger than before, and the capital stock that emerges will prove more economically useful and productive.
Factoring in the multiplier effect of $7 billion spent rebuilding yields an economic benefit from reconstruction of about $13 billion. Add to that the gains from more a more modern and productive capital stock-likely in the range of $4 billion-and consumer and business spending that is only delayed but not permanently lost-likely in the range of $9 to $12 billion-and the total effects of natural disasters of the scale of Irene are not large two years down the road.
Read more: http://www.foxbusiness.com/mar...irene/#ixzz1WLiNsW1p
