Local experts say although recent floods have caused plenty of misery, they do have a silver lining, and may in fact, stimulate our economy.When severe floods hit the stateline, people fled their homes, only to return to find carpeting ruined, furniture trashed and walls and floors warped. While no one wanted the floods, they do have a silver lining.
Insurance proceeds as well as loans and grants from FEMA, may actually help stimulate our economy. Residents and businesses may need to hire contractors to refurbish their homes. Retailers may also see a spike in business when flood victims may buy new carpet and appliances.
Floodwaters damaged more than 650 stateline homes along the Rock River.
Builders and contractors who have taken huge financial losses in recent years are finding some relief in Hugo and other east- and north-metro cities where marauding spring storms hammered thousands of houses.Phil Miller pinch-hits for Frederic Bastiat.
The problem, as any economist worth his salt will tell you, is that disasters divert resources that would have been used more productively elsewhere. Instead of creating economic activity, disasters destroy wealth, and make the affected society, as a whole, worse off.Consider this waterfront bar in Love's Park, Illinois that has to replace flooring it just replaced.
Business is down 75 percent, costing [owner Therese Ann] Dobson and her two daughters thousands of dollars. This after they poured more than $100-thousand into renovating the place. It was only open three weeks, before the Rock started to rise.
Then the task turned to sandbagging and pumping. But despite their best efforts, Dobson saw the water start to seep in last Wednesday.
"She came running into the kitchen and said get a mop, it was all coming through the wall actually, it wasn't coming through the door. So we had to move the sandbags," says [co-owner Paula] Schwartz.