Borrowing Trouble (from China) in Katrina’s Wake – Ron Elving

From NPR.org:

If you think the costs of war in Iraq and recovery from will force President Bush to raise taxes, think again. No matter how high the price may go for rebuilding the Gulf Coast while staying the course in the Persian Gulf, this White House will not choose the revenue option…

So we will borrow what we need to rebuild Louisiana and her neighbors. The future beneficiaries of that policy will be our creditors, including China and her neighbors. Right now, they like investing in America by owning our debt. And in the long run, creditor nations tend to rise as debtor nations decline.

Why do our policymakers accept this trajectory? Why can’t the United States government raise the cash domestically or reduce other spending? The reasons are several, and they are not hard to understand.

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