9/29/2005

Have we asked the Chinese how they feel about rebuilding New Orleans ?

Risk of rebuilding New Orleans in deluge of debt
By Clyde Prestowitz
Published: September 28 2005 19:41 | Last updated: September 28 2005 21:24

In the wake of President George W. Bush’s recent speech in New Orleans, I have been wondering if anyone has asked the Chinese how they feel about his decision to spend “whatever it costs” to rebuild the city. After all, they are the ones who will have to pay for it.

The cost of rebuilding is estimated at more than $200bn (€167bn) but the White House insists it will not increase taxes. That means the entire cost will be added to the $350bn federal budget deficit, driving it close to $600bn. This deficit is financed by selling US Treasury bonds to investors looking for a fair and safe return on their savings.

FT.com / Comment & analysis / Comment - Risk of rebuilding New Orleans in deluge of debt

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