Unlike many people, I have not been glued to the TV in the last 48 hours watching the destruction being wrought in southern Louisiana and New Orleans. However, I have seen enough pictures and read enough accounts to know that this is going to be very bad for a lot of people. My heart goes out to those affected, some of whom, sadly, have lost their lives.
The underlying question is why did we have a disaster of this magnitude? It is clear, that, despite what some instapundits would have you believe, that there are several contributory factors:

1. Global Warming
This studyfrom earlier this year showed that the mean intensity of tropical cyclones has increased significantly in the last 30 years. There are two fuel items for tropical cyclones; water and heat. Sea temperatures in the Gulf of Mexico and the Caribbean have risen in the last few years, and it is difficult to find any other explanation that makes sense other than the general upward trend in sea surface temperatures that is part of the phenomenon known as global warming

2. Cities sinking below sea level
New Orleans is an artificial city, in that a large percentage of the urban land area is at or below mean sea level. In order to prevent flood inundation, areas like this need good drainage and a network of water barriers to prevent transient water level rises from flooding residential and commercial areas.
There is a lot of accumulated evidence from elsewhere and locally that the land on which the city was built has sunk over time. This is due to a number of events such as groundwater abstraction from underwater aquifers beneath the city, the extraction of oil and gas from deep strata (which creates voids in the strata that are filled by settlement) and the removal of the deposit effects of river silting (which tends to build up soil on top of the existing land) by the extensive dredging required to maintain navigable waterways. These issues are not unique to New Orleans - other low-lying cities (notably Venice) have many of the same issues. The causes are complex, and the cures will be expensive and potentially unpalatable (i.e. stop making dangerous cities bigger).

3. Under-funding of sea and river defences
We know that the sea and water defences in and around New Orleans have been under-funded for some time. This is not a sudden revelation - one can find articles on the Internet from various times in the last 2 years where local district representatives were warning of safety issues due to the diversion of budget monies to other purposes, including expenditures related to the war in Iraq. The Army Corps of Engineers had a backlog of water defense improvements, not able to be properly funded.

This is an expensive, tragic mess, which could have been mitigated by smarter execution of urban planning for a large marginally safe coastal area, more attention to macro issues such as global warming, and proper funding of coastal and waterway defences.
Currently the wingnut fringe on the left is blaming the entire mess on Bushco, while the right-wing fringe is disavowing any attempt to blame the Iraq war for the mess, and suggesting instead that the US axes its foreign aid budget to pay for clean-up and reconstruction. Neither of these two fringes is anywhere near the mark. Here are some of my thoughts:

1. As long as the US administration continues to down-play the issue of climate change (and we should remember that the climate on Earth has changed considerably over time, going back to well before the emergence of homo sapiens) by gerrymandering scientific data and study results, I have zero confidence in their ability to come to grips with any global ecological or meteorological trends. Put bluntly, BushCo are behaving in a negligent fashion born of a laissez-faire worldview that sees addressing climatic and environmental challenges by regulation of societal behaviour as anti-American.
Regulation is not something that only "socialist countries" do. It is part of growing up as a nation, that when you start to stress your natural resources, you have to maximize the return from using them. This administration has the least visionary, most negligent approach that I have ever seen from an industrialized country towards the management of natural resources and environmental quality.

2. It is clear that diversion of funding from water defences to war-related purposes contributed to the magnitude of the disaster that is now unfolding.

3. Axing the US foreign aid budget is a red herring. It would not be necessary to axe any budget if the US was not already running a budget deficit of ridiculous proportions.
The real fiscal issue is that the administration is currently spending money (note: our money, borrowed from outside the US, requiring payback in the future) that it does not have, much of it on occupying a country which was invaded for reasons that turned out to be largely specious, where there is no clear strategy for re-building the country or exitting having met clear objectives that contribute to US or global security.
(Note to TV talking heads: "Stay the Course" is not a strategy - it's an empty political slogan, and you need to start calling people on it instead of behaving like a bunch of nodding dogs).
Yet more of the money has been handed back to a small proportion of the country in the form of tax cuts benefitting only a small percentage of the population. Somehow I doubt that many of the victims of this disaster are net beneficiaries of the tax cuts.

4. The President and other senior political leaders should stay away from the whole area. If they try to fly political entourages (Secret Service, armor-plated boats, the whole nine yards) into the area, that ties up resources that should be used for rescuing people and helping to maintain order and calm.

5. George Bush is not personally responsible for Katrina. However, his administration bears a heavy share of the responsibility for failing to maintain adequate spending on coastal and river defences due to conflicting overseas military priorities, and for failing to take seriously any scientific evidence that might require the implementation of strategic regulation on natural resource exploitation and maintenance of the viablity of the environment of the USA.