Ever since 1985, when the U.S. became a net borrower for the first time in 71 years, its investment gap has been widening. Last week the Government said the imbalance between total foreign investment in the U.S. and American holdings overseas reached $532.5 billion at the end of last year, up 41% over 1987. Britain is the largest direct investor in the U.S., with holdings of $101.9 billion, up 28%. While foreign investment can help stimulate U.S. growth, some economists predict that the imbalance will lower America's standard of living as an increasing volume of payments flows to foreign owners.
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