It is hard to overestimate what is the functional equivalent of a nuclear attack on a city that has been called the "heart valve" of American commerce.
One of the great physical advantages this country has is the drainage system of the Mississippi River. For over two hundred years this river and its barges have brought down and carried up the high weight, low value products that form the raw materials of commerce - this includes such staples as wheat, corn, iron ore, coal, and on and on.
Iowa feeds the world through New Orleans. Detroit builds cars based on low cost barge traffic both up and down from New Orleans.
New Orleans is a horrible place to build a city. It is too humid, too insect ridden, too low and way too subject to flooding to be a place where anyone would really want to live.
Except for the fact that this is the exact place a city has to be to do all the work needed for transport, reloading, off loading, and all the transfers between ship, rail and trucks. This is the critical link - or bottleneck - in the pipeline of raw materials that come and go from this country.
Now, and for a long time to come, there is no longer a city there to do that work. There is not only the physical damage to the homes and buildings. That would be bad enough. But there are no longer any workers there either. They are now refugees living in other towns and looking for new jobs.
When wheat costs four times as much to ship by train as it does by barge prices will go up or farmers will go bankrupt. Neither one is a happy ending.
Here is an overview of the drainage basin issue and what is happening to the area (this pre-Katrina) http://www3.nationalgeographic.com/ngm/0410/feature5/