The Nation : Foreign Debt Seen as Threat to U.S. Living Standards

American living standards could be seriously eroded by the mid-1990s with a rise in the nation’s foreign debt to the neighborhood of $2 trillion, according to a congressional study that projected that U.S. foreign debt will climb to $576 billion at the end of this year and surpass $1 trillion in 1991. By the end of 1995, the foreign debt would be $2.06 trillion, or one-fourth of the country’s gross national product. That debt would require an annual payment of $96 billion to foreigners to service the debt, an amount equal to 1.2% of the projected GNP that year. The study predicted that while the country’s trade deficit will finally show an improvement this year, after deteriorating for six years, that improvement could be short-lived.