Sen. Hillary Rodham Clinton is raising a red flag regarding the U.S. economic vulnerability she says is being caused by foreign interests owning large portions of U.S. debt, a situation she blames on the Bush administration. Treasury Secretary Henry Paulson, however, has dismissed Clinton's concerns, saying that foreign purchases of U.S. government debt reduce interest rates. The debate was spurred by traders who attributed the recent plunge in U.S. stocks in part to a decline in Chinese equities.

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