How to Fix New Orleans

Larry Kudlow prescribes tax-free private-sector enterprise in place of government spending, and it makes good sense:

How much money has Uncle Sam spent on New Orleans and the Gulf region since Hurricane Katrina ripped the place apart?

I'll give you the answer because you'll never guess it. The grand total is $127 billion (including tax relief).

That's right: a monstrous $127 billion. Of course, not a single media story has highlighted this gargantuan government-spending figure. But that number came straight from the White House in a fact sheet subtitled, "The Federal Government Is Fulfilling Its Commitment to Help the People of the Gulf Coast Rebuild." Huh?

This is an outrage. The entire GDP of the state of Louisiana is only $141 billion, according to the U.S. Department of Commerce. So the cash spent there nearly matches the entire state gross GDP. That's simply unbelievable. And to make matters worse, by all accounts New Orleans ain't even fixed!

...The idea of using federal money to rebuild cities is the quintessential liberal vision. And given the dreadful results in New Orleans, we can say that the government's $127 billion check represents the quintessential failure of that liberal vision. Hillary Clinton calls this sort of reckless spending "government investment." And that's just what's in store for America if she wins the White House next year.

Remember President Reagan's line during the 1980 campaign about how LBJ fought a big-government spending war against poverty, and poverty won? Well think of all this Katrina spending as the Great Society Redux. And it failed. I suppose the current Bush administration would like to label this "compassionate conservatism." But guess what? That failed, too.

Right from the start, New Orleans should have been turned into a tax-free enterprise zone. No income taxes, no corporate taxes, no capital-gains taxes. The only tax would have been a sales tax paid on direct transactions. A tax-free New Orleans would have attracted tens of billions of dollars in business and real-estate investment. This in turn would have helped rebuild the cities, schools and hospitals. Private-sector entrepreneurs would have succeeded where big-government bureaucrats and regulators have so abysmally failed.   

Comments

[AndyJ]

Kudlow approaches the problem as an entrepreneur, a voter, a taxpayer. He does not approach it as a politician. For politicians this is a gold mine for the following reasons:

1) it's NOT their money they're spending 2) its not their problem. They live in Washington DC and NEVER-EVER have to spend more than one night in these areas. 3) without a bureaucracy to abuse they would have nothing to do. THIS gives them great credibility with voters. They can hold hearings, get on TV, make speeches, and appear important and caring 4) they get to raise taxes... OBVIOUSLY something this big needs more money. 5) by raiing taxes they can create some exemptions that reward friends. 6) creating new rules, new taxes, spending federal money and abusing the regulators means more in campaign donations.... HOW can ANYONE run against such a caring, compassionate and involved politician...who has all the airays, all the press and all the money... IF this problem goes away, the politicians and TV reporters lose...

Cynical?.... Possibly... OK... I am a cynic