Sandy Leaves Millions Without Power and Some Worrying About the Economy

From the Wall Street Journal article "Sandy Hits Coast, Floods New York" by Jamila Trindle, Michael R. Crittenden, and Michael Howard Saul

Hurricane Sandy hit the East Coast hard on Monday flooding streets in lower Manhattan and wiping away the New Jersey shoreline. Approximately 5.2 million people were left without power across the region Monday night. This is the largest power outage seen since the New York blackout in 2003. Officials predict it will take at least a week to return power to all residents.

A record breaking 13-foot seawater surge flooded New York's Brooklyn Battery tunnel, a major traffic area, as well as portions of the city's subway system. Officials say it will take at least a week for the subway to be up and running again. The subway is a crucial form of transportation for New Yorkers. Many people rely on the subway so much that they do not even have driver's licenses. With the subway down it will be extremely difficult for many people to attend work. 

With businesses, homes, and roads destroyed up and down the coast line, there is concern on how badly the aftermath of this super storm will affect the U.S. economy. According to catastrophe-risk modeling firm EQECAT, damages are expected to affect 20% of the population, which is approximately 62 million people.

The cost of these damages will range from $10 billion to $20 billion compared to Hurricane Irene which cost $10 billion in damages last year. This will add more strain to an economy that is struggling to improve. Even though the disaster will create construction and electrician jobs, many others will be out of work because their companies' buildings no longer exist.

State and local governments will need to use their savings to help pay for repairs to government property such as buildings, national parks, roads etc. Repercussions of this government spending may lead to tax increases in the Northeast to cover repair costs. However, if people are out of work and not making money then they will not be able to afford a tax increase.

In situations like these it is always good to look for the silver lining. Thankfully, damages from Sandy will not be as expensive as Hurricane Katrina which cost $110 billion dollars back in 2005. Hopefully local, state, and federal governments can put their differences aside to work together in an organized and efficient manner to get this crisis behind us as soon as possible.