ABSTRACT
The USA became a net debtor internationally in early 1985, for the first time since the First World War. By the end of 1987 it had accumulated a net debt of $368 billion on the books, making it by far the largest net debtor nation in the world.1 The IMF estimates that the debt will exceed $700 billion by the end of 1989.2 At the current rate of borrowing - $150 billion a year - the debt will pass the $1 trillion mark in 1991. Meanwhile, Japan has become the largest creditor nation, with a net foreign investment position predicted to rise from $266 billion at the end of 1987 to more than $400 billion by the end of 1989.
