Since I wanted to drop some tables and somebody suggested the below and I did it:
postgres=# drop schema public cascade;
DROP SCHEMA
postgres=# create schema
That advice can cause some trouble if you have an application user (like 'postgres') and run the DROP/CREATE commands as a different user. This would happen if, for example, you're logged in as 'johndoe@localhost' and simply hit psql mydatabase. If you do that, the new schema's owner will be johndoe, not 'postgres' and when your application comes along to create the tables it needs, it wont see the new schema.
To give ownership back to your application's user (assuming that user is 'postgres'), you can simply run (form the same psql prompt as your local user):
ALTER SCHEMA public OWNER to postgres;
and you'll be all set.