Tuesday, October 30, 2012

Sandy is a Negative

Don't believe the argument that natural disasters fuel economic growth.  That argument is only true if what is being destroyed is something that should have been demolished in the first place.  Otherwise, things like "Sandy" should be viewed as a net wealth loss.  So, who steps up to make up for the wealth loss....the government?

Governments at all level are broke.  Sandy will only exacerbate the problems of state and local governments and everyone knows the federal deficit is on a path to disaster.  So, there is no silver lining here.

The loss is not confined to destruction.  Shutting down New York City and much of the East Coast for two days is not going to be completely made up later.  Some substantial loss is inevitable from the shutdown.

Sandy is a reminder that bad things can happen randomly. It is also a reminder of why people and governments should save for a rainy day.  Sometimes it rains.

No comments: