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Argument: $700b bailout would increase US deficit and interest rates

Issue Report: $700 billion US economic bailout

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Dorene Isenberg, an economist and chair of the Economics Department at University of Redlands, in California, said it’s possible that the added 700-billion-dollar debt will drag down the U.S. dollar, depending on how much confidence foreign investors maintain in the U.S. economy. “It might lead to a further decline, that’s truly possible.”[1]

“Bail-out debate: For and against”. BBC. 25 Sept. 2008 – Ballooning state debt: The plan would swell the budget deficit, which could fuel inflation, economists warn (Mr Paulson has asked to raise state borrowing to $11.3 trillion, from $10.6 trillion).