It is economical, because if we don't, we'll have millions of homeless people and even worse, people starving and dying on the streets, and people turning to crime just to survive. How can anyone call such a situation good for the state and local economy? It's not, so it's time to grow a heart and a brain and fix this issue.
Rebuilding New Orleans is not economical. New Orleans is situated in such a place where every so often, a hurricane will come an ruin the city. This starts a cycle in which the city of New Orleans is being rebuilt just to be beaten down again, and that's not economically feasible.