U.S. Taxpayers May Face Steep Tab for Rebuilding Haiti after Earthquake

President Barack Obama has pledged the "full support" of the U.S. government to Haiti after the island nation suffered an epic earthquake that may have left untold thousands dead and injured. What he did not mention is America's generosity may come with a hefty price tag as the federal deficit is mushrooming from spending on the wars in Iraq and Afghanistan.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% The exact price tag for U.S. taxpayers in Haiti is unclear. The costs could be hundreds of millions or even billions, depending on the contributions from other sources. Obama likely will spend big to stabilize Haiti since it is so close to the U.S. He also wants to prevent a mass exodus of Haitians to the U.S.

A Quarter Of The Cost?

Stewart Patrick, a senior fellow at the Council of Foreign Relations, tells DailyFinance that the U.S. may have to bear about one quarter of the cost to rebuild the Western Hemisphere's poorest country. His sentiment was echoed by the Heritage Foundation's Jim Roberts, who served in the Foreign Service in Haiti. "It's inevitable that the US taxpayer will pay for some of this bill," Patrick says. Although the tab will be considerable, it will pale in comparison to the the cost of the war in the Middle East.

Media reports indicate that more than 2,000 Marines will be heading to Haiti as part of a humanitarian effort, along with ships, helicopters and airplanes. These first-responders will have their work cut out for them. The quake was centered 10 miles outside of Haiti's capital Port-au-Prince, a city with a population of more than 2 million, by far the country's largest city. Media reports indicate the the government is in a shambles and the presidential palace lies in ruins. Everything from shanty homes to government buildings to hospitals lie in ruins.

Sadly, the disaster comes as businesses were starting to invest in the Caribbean nation, lured by a dirt cheap pool of labor, giving Haitians a rare bit of optimism. Royal Caribbean Cruises (RCL) reports no damage to its Labadee "private destination" in the country and said it stands ready to assist with the humanitarian relief. Other nations likely will also contribute along with international organizations.

'A Devastating Blow'

"This could be a devastating blow to Haiti's nascent political stability and economic recovery," says Patrick, a former U.S. State Department official.

No one knows the extent of the devastation in Haiti. Singer Wyclef Jean, who also runs a non-profit to help his native country, is reviewing the situation himself, his spokesman says. He released a statement to the press pleading for assistance for Haiti saying, "idle hands will only make this tragedy worse." Of course, life was pretty miserable to begin with in Haiti, which last experienced an earthquake of this magnitude in 1860, according to National Geographic.

The country only provides education to about 10% of its children, leading to high rates of infant mortality and deaths of women in childbirth. Most people earn less than $500 annually. Heart-4-Heart Lutheran Mission Society estimates that more than 80% of Haitians are unemployed and live without running water, sanitation or electricity. So, the government was especially unprepared for the disaster.

Tangled In Haiti For Decades

"The actual capacity of the Haitian state to respond this event is virtually nil," Patrick says, adding that Haitian society was "incredibly unequal" with a small, extremely wealthy, elite and a majority that lives in grinding poverty. "It's hard to exaggerate the level of misery in which many Haitians live."

The U.S. has been tangled in Haiti for generations, Founded in 1804 following a slave revolt, the country was recognized by President Abraham Lincoln in 1862 at the height of the Civil War. Lincoln sent Frederick Douglas, the noted anti-slavery activist, there as U.S. Minister.

In 1915, the U.S. invaded Haiti, occupying the country until 1933. During the Cold War, the U.S. backed the corrupt Duvalier family dictatorship. UN Peacekeepers, including US Marines, were sent to Haiti in 2004 following the political turmoil surrounding President Jean-Bertrand Aristide's unpopular rule.

But even though much of the infrastructure was built by American companies, it was allowed to rot through a combination of corruption and bureaucratic ineptitude. Corruption has been a serious problem in Haiti for decades and will probably be a roadblock to any rebuilding efforts, experts say.
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