"Either you think it's appropriate (to spend public money on rebuilding New Orleans) or you think it's a shame"
Gil

This perspective is a little too "black and white" for me, Gil. It is possible to favor some government spending without favoring spending $250 billion. And the government has occassionally implemented a few projects that cost less than 250 billion dollars, so government spending less than this amount is certainly possible (Right?).

"Democracy is the least bad way to organize limited coercive power"
Gil

Perhaps I did not make myself clear. When a majority votes for government provision of a public good, if one prohibits the majority from realizing its wishes, this is coercive, as well.

For example, virtually all of us vote for defense spending because the cost of excluding someone who won't pay for the benefits of defense is prohibitively expensive. It would be quite costly to design defensive systems that direct incoming attacking missiles only to the homes of those who did not voluntarily support the military!

The point is not that "democracy rule" is ideal (it isn't, as many as 49% can be coerced in a vote), but rather that economic efficiency, supported by a vote of the majority *decreases* coercion, as well. Though some are coerced by taxation into paying for defense when they presumably never believe we will be attacked; failure to tax, coerces *the majority* into accepting an inadequately prepared military.

It is not logical to say that the majority should simply voluntarily contribute. What marginal benefit, in protecting myself, do I receive by voluntarily contributing an extra dollar to the military? Essentially none. The military is equally powerful whether I contribute an extra dollar or not. Unfortunately the situation is symmetrical for everyone in society, so the military will be inefficiently underfunded without government intervention to coordinate collections. Therefore, taxation to improve the military of a free nation, *decreases coercion* for the majority who favor it, just as it increases coercion for the minority who don't. This is a classic economic problem when transaction costs are high in the production, measurement, and distribution of a good.

Similarly with New Orleans, we can not exclude those who fail to pay for its reconstruction, from enjoying the benefits of the city. And despite its problems, on display for the whole world after the hurricane; its history, unique charm, wonderful Jazz, extraordinary cuisine and even Bourbon street, are valuable assets to most Americans; as would likely be expressed in their democratic preferences given polling data.

But what marginal benefit does an individual citizen receive in contributing an extra dollar to the reconstruction of New Orleans? Essentially none. New Orleans will have the same infrastructure whether I contribute an extra dollar or not, and the situation is symmetrical for all Americans, so infrastructure in New Orleans will not be adequately funded given the incentives of individuals, even if many are quite generous.

But the majority of Americans may very well be interested in contributing 100 dollars to rebuild New Orleans, in the form of new taxes, because they know that the combined total of everyones contribution, coordinated by taxation, will begin to rebuild the city. This commitment to progress then encourages private investment, which often follows infrastructure reconstruction. Failure to allow citizens in the majority to coordinate their economic efforts via a government action for which they are willing to pay, is coercive (and wrong) as well.

But there is surely a difference between government spending 250 billion dollars and 25 billion dollars. And yes, it would be better if most of the work were contracted out by government agencies to private firms using fair bidding practices. And yes, there is bound to be waste and fraud, in any government project.

But reconstructing New Orleans, sends a signal to ourselves and to the world, that we will not back down in the face of natural disaster. In not succumbing to natures wrath, we also force ourselves to learn from tragedy, yet still overcome it, and this is ennobling for our country.
Michael Golding