Debate on Investment By Foreigners Shows Scale of U.S. Change
In a closed hearing room on Capitol Hill yesterday afternoon, conferees from the Senate and House gathered to argue over an unresolved issue in the trade bill before them: Should foreigners who make large-scale investments in this country have to register and disclose data about themselves?</br></br>It was a question that, four or five years ago, none of them would have thought to ask-another sign of how sharp a corner the U.S. economy has turned in the 1980s. Through its history, the United States has generally kept its borders open to foreign investment money. Today, with funds from abroad cascading in with a force never before imagined-an estimated $800 billion since the beginning of 1983-some Americans are worried that the open door may lead in the end to loss of economic sovereignty.</br></br>Using dollars accumulated through years of trade surpluses with this country, foreigners are buying manufacturing companies, banks, hotels and office buildings. They are setting up new factories and sales chains. They are buying huge volumes of U.S. government securities that finance the federal budget deficit.</br></br>Much of this investment is due to the withering of American industry and the low value of the dollar. Beginning in 1985, the drive to force down the dollar was meant to stimulate sales of U.S. products abroad, but it has also meant that the companies and factories that make those products are that much cheaper to foreign buyers.</br></br>Almost every country in the world has mixed feelings about rich foreigners, and this one is proving no exception. In Congress and among the public, some people are wondering if the family jewels are being sold. Will national security be threatened by having crucial production controlled from abroad? Could the U.S. economy be held hostage to foreign interests?