John Snow tries to reassure on “housing bubble” in wake of Katrina rebuilding
September 20, 2005
In remarks before the National Association of Federal Credit Unions on Tuesday, US Treasury Secretary John Snow said that some of President George W. Bush’s domestic agenda will be put on hold for a period of time in order to deal with recovery from the devastation of Hurricane Katrina along the Gulf Coast of the United States.
He said that the short-term economic impact on the zone directly affected by the hurricane will be “devastating” and that the rest of the nation will suffer what he called a temporary slowdown in growth of jobs and the economy.
He also said that the nationwide downward turn in the economy should last about a quarter, but then also said that the rebuilding effort will likely push economic growth in 2006 higher than it would have been had Hurricane Katrina not hit the United States.
Among the domestic agenda items that will be sidetracked by the recovery from Katrina, according to Mr. Snow, are work on the estate tax and making the Bush administration tax cuts permanent.
In response to a question about the housing bubble, Mr. Snow said that some easing in the market is inevitable, but that he thinks it is improbable that the market will collapse. He called the characterization of the housing market as a “bubble” a “misnomer”.
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