Head It Off at the Pass

Let's deal with this one before it becomes the main topic of discussion an the evening news (though its probably been bandied about some already).

Utilizing the classic "Broken Window Fallacy", Dr. Walter Williams proves why Hurricane Katrina (or any other disaster or mishap) is NOT a boon to the economy.

Bastiat wrote a parable about this which has become known as the "Broken Window Fallacy." A shopkeeper's window is broken by a vandal. A crowd formed sympathizing with the man. After a while, someone in the crowd suggested that the boy wasn't guilty of vandalism; instead, he was a public benefactor, creating economic benefits for everyone in town. After all, fixing the broken window creates employment for the glazier, who will then buy bread and benefit the baker, who will then buy shoes and benefit the cobbler, and so forth.
Those are the seen effects of repairing the broken window. What's unseen is what the shopkeeper would have done with the money had the vandal not broken his window. He might have employed the tailor by purchasing a suit. The vandal's breaking his window produced at least two unseen effects. First, it shifted unemployment from the glazier who now has a job to the tailor who doesn't. Second, it reduced the shopkeeper's wealth. Had it not been for the vandalism, the shopkeeper would have had a window and a suit; now he has just a window.

This doesn't even take into account the fact that most of this spending will come from taxes (thats what Federal relief is folks, YOUR money).
This way the misery gets spread around to all.