Who will end up paying for Katrina and Rita? Don't expect an answer from the White House. The president hasn't called for any national sacrifice other than asking Americans to drive less.
Yet Katrina and Rita are likely to demand widespread sacrifice nonetheless. Normally, hurricane destruction improves the nation's economy because of all the rebuilding that has to be done. Conveniently, the national income accounts don't subtract what's been destroyed. They only register what's being built.
This time may be different. The $200 billion tab for rebuilding will stimulate the economy in the short run, but we don't have a clue how we're going to pay for it. Worse yet, consumers hit by high energy prices are likely to slash their spending. That means a slower economy.
The typical American consumer hasn't had much of a pay raise in years, counting inflation. Consumers have stuck to their spending binge by working more hours, going deeper into debt, and sucking home equity out of their homes.
Even before Katrina, these strategies were wearing thin. Most people can't work more hours without turning into zombies. They can't go deeper into debt without risking personal bankruptcy -- which the new bankruptcy law makes particularly unattractive. And they can't get more equity out of their homes because housing prices are starting to level off.
On top of all of this came the hurricanes. The oil drilling and refining capacity that's been knocked out will keep gas near $3 a gallon for many months. And home heating bills this winter are expected to be about 30 percent higher than last year's.
Depressed yet? You're not alone. The Conference Board's monthly survey of consumer confidence showed a steep plunge in September. Even before Katrina, the nation's automakers, big-box retailers, appliance dealers, and restaurants were showing sluggish sales.
Poor and working-class Americans will get clobbered the worst. When energy prices rise, a bigger portion of their paychecks gets hit. When the economy slows, they're usually the first to lose their jobs.
So even though the economic pain caused by Katrina and Rita will be widespread, it will still fall mainly on those least able to cope with it. Yet, hopefully, what we've learned from this disaster is we can't continue to let our most vulnerable citizens take the hardest hits.
Message to Congress: Don't pay for rebuilding the Gulf Coast by cutting food stamps, Medicaid, low-income housing, and other programs for the less well-off. Instead, return the pork you got from this summer's transportation bill. Put a windfall profits tax on oil companies that are making out like bandits.
And don't extend those tax breaks for the rich.
Robert B. Reich is co-founder of The American Prospect. A version of this column appeared on Marketplace.
