A new NO

Tyler Cowen recommends relaxing building standards in New Orleans to encourage the reconstruction (aka, legalize shantytowns). I think he's right, as, at least for now, the only way people will move back there is if it's cheap. My idea, however, is more ambitious (it's probably been mentioned elsewhere, but as far as I remember I've never seen it, so I'm calling it my own). Make New Orleans like Hong Kong was under British rule, a tax-free zone. The tax revenue we miss out on will be dwarfed by the amount of economic activity that is unleashed. It wouldn't even cost the treasury that much in the short-term. I'd love to see it become permanent, but, if needed to get it passed, we could put a time limit on the tax exemption of around 15-20 years. That would be long enough to get businesses and individuals to move in there, but short enough to limit the losses to the treasury.