You're watching...
University of Maryland Economist Peter Morici on the financial impact of Hurricane Sandy.
Also in this playlist...
Auto-advance: ON
Auto-advance
This transcript is automatically generated
-- could this super storm -- -- are already struggling economy.
Normal end up costing about twenty billion dollars in damages that the estimate some predict upwards of thirty billion dollars in lost business activity.
For more.
Joining me now Maryland economist Peter Murray city.
Peter welcome back in the show it's always great to have you here look you have a number that I had seen nowhere else in estimating total costs.
Of this Jordan said something like 35 to 45 billion dollars how do you get there.
Well first of all we're gonna have about twenty billion dollars in property losses the initial estimates of five to ten.
For Irene there was seven but -- -- ten turned out to be close which wanting so I think they'll still be as bad as -- to this twenty billion.
But now look at all the stores that are close the flights that having gone out the hotels the businesses.
On the -- and in New York City that -- that are down for 234 days that's a loss of income.
That's another twenty billion seconds -- have to forty.
Wow.
OK makes a lot of sense of people typically underestimate these costs let's face it.
I've read that New York City alone is an economy with four billion dollars it pumps out four billion dollars every day.
You take that times five that's twenty billion dollars it's not just the damage that you have to repair at the end of the day.
It's also the loss of productivity work days lost payroll.
It even today it could be far more devastating than we've been talking about.
You've also said though and I find this interest saying that.
The short term painful but in the longer term we'll get a much a federal dollars and -- -- pump some energy in this economy.
Absolutely if -- -- trying billion dollars in property damage will spend more than that rebuilding we always do.
Especially along the shore because the property -- value will build bigger homes bigger businesses and so forth.
Obsolete capital replaced by Martin capital that's good thing.
We'll get the multiplier -- data that you have to spend the dollar on infrastructure you get a dollar eighty GDP from additional spending.
And you know so look at those kinds of benefits I think that by the time this is all done the effect on GDP will be to -- -- immediate late.
But -- to let that down the road so that the net effect might actually be a little bit positive in terms of you know GDP growth -- the United States is a whole.
Do you what kind of impact to national GDP do you think this storm -- have in the short term and -- in the long term.
Well in the short term we could certainly lose twentieth thirty billion dollars and in the long term we can pick up.
On a net basis and maybe thirty to forty in other words -- -- about ten additional billion dollars.
-- Peter -- C thanks for coming on tonight and I hope you and your family are safe in your house is is fine thank you Selma.
