Thursday, March 31, 2011

How big is the US federal budget disaster?

The devastating images from Japan are seared into our collective memory. With 10, 901 dead and another 17, 038 still missing, the human toll is almost beyond comprehension. The 9.0 magnitude earthquake and resulting tsunami that ravaged Japan has become the most expensive natural disaster in recorded history.

From Fox News:
Japan's Cabinet Office on Wednesday estimated the catastrophe...could cause losses between 16 trillion yen ($198 billion) and 25 trillion yen ($309 billion). That figure compares with estimates from the World Bank and Goldman Sachs for losses of $235 billion and $200 billion, respectively.

The $309 billion price tag would make Japan's earthquake the costliest on record, surpassing the $125 billion that the Insurance Information Institute estimates Hurricane Katrina cost the Gulf coast in 2005. It would also top the $100 billion in damage caused by the 1995 Kobe quake in Japan.
Uh... hold on a minute. Something seems wrong with these numbers. Do I understand this correctly; all those coastal cities and towns that were leveled, the tens of thousands of cars and homes that were pulverized, all the stores, shops, factories, warehouses, schools, freeways, roads, ships, aircraft, trains, port facilities and infrastructure reduced to rubble and it will only cost as much as US Federal deficit for a couple of months? (read more)