Revised Figures Show Less Foreign Debt

THE United States did not become a debtor nation until 1986 - two years later than the government initially estimated, according to revised data issued this week by the Commerce Department. The Commerce Department's Bureau of Economic Analysis said sweeping revisions to the nation's net international investment status - reflecting for the first time inflationary pressures and market value - also showed America closer to the black in 1989 than previously thought.

For years, government number-crunchers have used historical data to put a cash value on the difference between the amount of assets foreigners hold in the US and the size of US investments abroad.

The Commerce Department had previously reported that the US slipped into the red in 1984.

The new figures show the United States above the line until 1986, when foreign investment in the US topped for the first time the amount US citizens own in other countries.

Economists say the change is long overdue, noting that the data have been skewed because investment in the United States has only grown tremendously in recent years, and the traditional measurements used by the Commerce Department have failed to keep pace with inflation.

The revision, which covers the years 1982 through 1989 and will be revised next month to bring the data up to date, means that investors and others will have two new numbers to reflect the net investment position of the United States.

One of those numbers, current cost, is an estimate of the cost of replacing property, plant, and inventories. The second figure, market value, is a measure of the intangible assets, such as a well-trained work force.

The two new measurements put the nation's net investment position higher than under the old system. All three measurements show that foreign assets grew more rapidly in the United States during that period than did US investments abroad.

According to the new figures, the US first slipped into the red in 1986, when current-value net investment dropped to a deficit of $74.16 billion.

Market-value prices showed that the US first began running a deficit in 1987, when those investments were valued at $48.99 billion.

At the end of 1989, current-cost net international investment stood at $463.96 billion, with a market value of $281.44 billion.

By contrast, the old data would have valued net international investments at $663.75 billion.