I live in Michigan, far away from Hurricane Sandy’s wrath, but I’ve realized that this monster storm could still affect my life and finances in some ways even though I’m not at risk of the ocean storm surge or severe rain and snow.
My heart goes out to the tens of thousands of people living along the eastern seaboard who have been impacted by Hurricane Sandy. The pictures of damage to cars, homes, and businesses inflicted by this monster storm from North Carolina to New England have been astounding.
USA Today reports that losses from Hurricane Sandy could reach $20 billion, though some economists predict it could go as high as $35-45 billion.
These losses are not just calculated in terms of property that has been damaged or lost from the storm, but it includes other factors as well, like lost wages of employees who couldn’t get to work and lost income for businesses that had to shut down due to the storm.
How the economy and your finances could be affected by Hurricane Sandy
In addition to the direct impact of the storm, there are indirect ways the US economy, and your finances and mine, could be affected by Hurricane turned Monster Storm Sandy.
- The closing of airports and cancellation of nearly 10,000 flights may cause future flight prices to increase as airlines try to recoup their losses. The cost of loss travel could exceed $600 million according to the Global Business Travel Association.
- Fuel prices could increase because oil and gas refineries along the coast were shut down.
- The increased demand for cleaning and building supplies to aid in the clean-up and rebuilding efforts could cause shortages and/or increased prices in other parts of the country.
- Insurance rates could increase nationwide as insurers try to cover the cost of claims.
- Food prices could increase due to delays in shipping and trucking.
- FEMA grants and other financial aid provided by state, federal, and local governments may have tax or other economic ramifications. Robert Higg’s classic book Crisis and Leviathan illustrates how crises, both real and perceived, have grown the size, scope and cost of government in the U.S. like nothing else.
We may never know all the different ways the economy will be impacted by this storm, but it will be interesting to see if we can discern direct and indirect results that impact our individual pocketbooks.
What’s your take? Is there anything else you’d add to my list of ways Hurricane Sandy will affect the economy?
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