We shouldn't be bamboozled by the left's exploiting of Katrina to lobby for bigger, more centralized government. It wasn't just the hurricane that caused the calamity; it was a catastrophic failure of government at all levels. After ignoring warnings that the levees could not withstand a Katrina-style storm, and then after failing to deal with the calamity they had created, bloated bureaucracies were busy thwarting effective private-sector efforts. Illustrative of this serial government failure was the Federal Emergency Management Agency's preventing Wal-Mart from sending truckloads of bottled water into New Orleans.  A bigger, more centralized government will only mean a bigger, more atrocious failure the next time a disaster hits.

We should not allow ourselves to be put on the defensive by left-wing cant about the need to raise taxes during periods of national emergency to "pay the bills," exactly the opposite of what sound economic and fiscal policy prescribes. Federal debt held by the public has fallen as a share of GDP by more than one-fourth since midway through Bill Clinton's tenure as president (down from 53 percent to about 35 percent), and it is slated to fall further during the next decade. Yes, Congress needs to get spending under control, but we shouldn't raise taxes to cover the cost of a one-time event.  Doing so would only retard economic growth and make paying for Katrina more arduous over the long run.

  The only rational way to pay for the current emergency is to strengthen long-run economic growth to ensure the revenues we need. That means not raising capital gains and dividends tax rates in a few years as provided for in current law and not allowing the death tax to spring back to life at 55 percent after expiring for a single year.  It means enacting fundamental reforms to the tax code that will make it possible to raise more revenues at even lower tax rates.  It means applying private-sector solutions and public-private partnerships to the problems facing those displaced by Katrina and then to all of America's poor.

Supply-side economic principles are sound in both good times and bad. Along with Enterprise Zones and homesteading, these are the principles upon which the recovery and reconstruction of the Gulf Coast should be based and the only principles upon which long-run national prosperity can be attained.