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Essay on What are the Impacts of Hurricane Katrina on the U.S. Economy
Hurricane Katrina was declared the most deadliest in the history of Gulf coast and the most costliest natural disaster in U.S. history. At the intials stages experts had estimated the cost of a hurricane disaster to exceeded $100 billion. However, this figure did not include the cost of catastrophic damage that would be caused by inland flooding. Extending this further, experts in their estimation, did not account for the losses that would be suffered by the U.S economy from the interruption in production and supply of oil and from the loss of exports of commodities like grains. Minimum insurance cost of the claims were estimated to be around $12.5 billion, excluding the uninsured damages, this figure gives half of the final insured cost figure. Moreover, Gulf Coast provided non-farm jobs to more than one million people, out of these 600,000 work force was from the New Orleans area.
Many people from the affected region of southern Louisiana and Mississippi and almost everyone in the New Orleans have lost their jobs are now unemployed. Companies have virtually ceased their operations and production in the region has nearly come to a halt. This can can have a very adverse effect on the economy, as no one in the affected wouuld be earning anything , so no there is no buying power in the city to purchase goods from the market. Moreover, if commerce is not taking place, government cannot collect any taxes from the regions. Taxes are a source of revenue for the governemnt and the government use this money to channel resources to the regions. The lack of revenue will limit the resources being channeled to the ares in particulare and to the state in general. This will have adverse long term effects on the ecnomy of the states which are already ranked among the poor regions of America with the highest unemployment rates...........
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