Katrina’s Economic Backlash

A Congressional Budget Office assessment of the first government estimate of Katrina’s economic impact obtained by AP News looks bleak, very bleak. “Hurricane Katrina will reduce employment by 400,000 people in coming months while trimming economic growth by as much as a full percentage point in the second half of this year.”

In the first government estimate of Katrina’s economic impact, the CBO gave a “ballmark estimate” that gas prices would spike by an average of 40 percent this month. That development alone would reduce overall economic growth by 0.4 percent in the current July-September quarter and by 0.9 percent in the fourth quarter of this year.

For all of 2005, CBO had been predicting that the economy, as measured by the gross domestic product, would grow by 3.7 percent this year and 3.4 percent in 2006. Holtz-Eakin said the impact of Katrina on these year-over-year estimates was likely to be smaller than the effects on growth in the third and fourth quarters of this year.

The CBO report said that the economy of Louisiana was about 1.2 percent of the U.S. economy and Mississippi was about 0.7 percent of the national economy. If half of that output were lost for three months — September through November — then it would lower total GDP for the country at an annualized rate of about 1.3 percentage points in the third quarter and 2.7 percentage points in the final three months of the year.

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6 Responses to Katrina’s Economic Backlash

  1. Marjorie G says:

    With Bush knowing about the upcoming severity of Katrina before it touched down, and yet he continued vacationing, supports my conspiratorial fears of this bunch that they allowed the NO destruction so they could rebuild. Something like the fantasies and acceptable losses approaching Iraq.

    A newer New Orleans, commercial port and important for oil, and now Halliburton close at hand with an unbid contract.

    Does anyone know where Cheney was and with whom? Something akin to the Energy Committee and all those maps of Iraq with sliced off pieces for the various companies?

  2. Ginny in CO says:

    Marjorie,

    Cheney was on vacation -like the rest of the Administration. He was in Wyoming.
    You know how hard it is to get out of Wyoming…It must have been easier
    to get out of NO.

    IMHO, you’re right. With their history of using Iraq for the NeoCon ideals and enrichment; looking at all those reports of doom would be great incentive to cut
    funding and drag their feet when it started to come true.

  3. Teresa says:

    Of course. They have a new gulf to occupy since the failure of the original plan.

  4. Marjorie

    I saw somewhere that Cheney was out buying a new mansion. Might have been on the Daou Report. My guess is been holed up drawing up the Halli-looters contracts.

  5. Teresa says:

    Not to worry.

    I’m sure their path in Iraq will be repeated and fare even worse in the American Gulf. Empire builders they are not.
    Especially if we defend our territory. Americans are more united than Iraqis so we should do better. We should not waver at all in recognizing the desperation of this crime group and our massive mobilization in this rescue effort should be contained and continued in the upcoming struggle.

    I think they have met their match and by us not backing down, their defeat.

    There are a million things to do and we should all pick what we most love and enjoy and go forward.

  6. kj says:

    Teresa, I agree. Some of the new employees at work are either unaware of the unofficial “do not speak ill of Bush” rule, or they don’t care, but they are speaking out, and it made my last days there just this short of joyous. One of them kept saying, “Send the bill (re: Katrina) to Crawford!” LOL

    Also agree, we need to pick what we love and enjoy and go forward. What we love and enjoy will fill the well that will sustain us, and we’ll have each other when/if the well runs too dry.
    :-)