Well... up until 48 hours before landfall, the director of the NWS was only 50% sure that it would hit NO. If you had X millions of dollars, and you were certain they would help American soldiers in Iraq, or 50% certain that they would help American citizens in NO, where would you put them?
It seems like an easy call to me.
Besides, if the US allows Iraq to become like Talibanist Afghanistan... well I think the only people who think that is a good idea are Talibanists. =\