President Bush has pledged massive federal money for the (IMO unconstitutional) purpose of rebuilding New Orleans and the Gulf Coast. Not only is this unconstitutional (I realize that my opinion in this is in the minority, but I'm not going to argue it just yet), but also yet another example of government subsidizing economically unwise decision making.
To paraphrase (because I don't have access to the book to quote perfectly) P.J. O'Rourke: "You are smarter than the government. Therefore, if the government is paying you to do something that you wouldn't do on your own, the government is paying you to do something stupid."
This is, in essense, what government subsidized hurricane/flood insurance, and government bailout for those whose property was damaged or destroyed by hurricanes, does: they pay people to do the stupid thing and rebuild in a place that is prone to suffering from massive hurricane damage.
I'm not saying that New Orleans and the rest of the Gulf Coast shouldn't be rebuilt. I'm just saying that taxpayer money (that is, yours and mine) shouldn't be spent on the enterprise. There are obvious economic reason for New Orleans, or at least some part of it to exist. Foremost among these is it's port, which is one of the nation's largest. But the cost of rebuilding should be borne by those who choose to live there and/or conduct business there, as well as those who have some other direct stake in the safety of the place, i.e. insurance companies. Insurance companies are the world's masters of risk assessment and cost benefit analysis. If they have a stake in the safety of New Orleans, maybe they, and not the government, should be the ones deciding how much should be spent protecting the place from Mother Nature. The same goes for any other disaster-prone area (San Francisco, Tacoma, etc).