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Ah - I see you don't know what I'm talking about. ;) Are you really a glazier ?

All hurricanes "promote" business activity in the rebuilding. Just look at Florida - ever see so many roofs replaced in one state in one year ? The point is, what is it you're not seeing ? What you don't see is what does not get spent.

The broken window theory of economics is an essay by Frederic Bastiat in 1850. Essentially he points out that yes, what you see is spending on a new window. What you do not see is that the person who has had to spend money to replace the window will not spend that money to replace his old suit. Since individuals cannot mint money, what is spent one place is not spent at another. And the government ? Yes, they can mint money, but that's called deficit spending and it translates into monetary devaluation.

Bottom line - we are all poorer as a result of the hurricane - whether you live in the affected area or are simply the taxpayer.

....we are all poorer as a result of the hurricane ....

Yes I am or rather was, a glazier, or more correctly a glazing contractor. My trade is but one of many involved in the construction process.

I understand your argument and the concept of universal loss, but I disagree with the applicability to the situation at hand.

I think of gross domestic assets, like gross domestic product. It is a measure of real national assets, private and public. At the time of the hurricane it had an instantaneous finite value. The assets were valued by the market at some momentarily fixed value. After the hurricane many of these assets were gone and the GDA was reduced.

As soon as recovery began the GDA began to increase and will continue to increase for some long indeterminate period. This increase will result in a change in the GDP. The goods and services produced for the affected area will benefit the economy as a whole.Glass manufactured here in Tennessee will flow through the distribution channels to glaziers who will fix broken windows and take part in perhaps the biggest construction boom in history.

These are not all maintenance functions as in your broken window example, these are creation of new assets replacing and superseding the old. All of the old were depreciated, some severely. The old assets are gone, off the books with no salvage value and no continued depreciation. The new Assets will be more valuable than the old depreciated assets. The Gross Domestic Asset value will be very much greater than before.

You noted a governmental function where the result is a decline in the relative value of the currency. There is another source of funds, created from thin air, and that source is bank loans. Long term financing will be obtained to create the new assets. The money will flow through the economy creating GDP, jobs and wealth.

The influx will energize the economy spelling doom for the Rats in '06 and '08.