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WASHINGTON (AP) - The United States sank deeper as the world's biggest debtor last year as foreign investors gobbled up record amounts of Treasury securities and corporate bonds.

In its annual look at the United States international balance sheet, the Commerce Department said Monday that the country's net debtor position rose 27% to $871 billion.

"This is about the only area of the U.S. economy that doesn't get a clean bill of health", said economist Allen Sinal of Primark Decision Economics in New York.  "The fundamental problem is we don't save enough as a nation."

The net debtor position is the difference between the $4.59 trillion that foreigners owned at the end of 1996 in U.S. assets - corporations, real estate, stocks and bonds - and the $3.72 trillion that U.S. residents owned in overseas assets.

About an eighth of the increase can be attributed to adjustments in currency values.  Because of the stronger dollar, R.S. assets abroad, denominated in European and Japanese currencies, were worth less.

The Dollar that U.S. residents paid foreigners for imported cars, oil, and other products were in turn used to buy U.S. investments.

The Commerce Department said that foreign holdings of U.S. Treasury securities, used to finance the $5.25 trillion U.S. national debt, jumped 36 percent to $531 billion at the end of last year.

Foreign ownership of corporate bonds rose 22%.  Stock holdings increased 23%, with most of the gain the result of rising prices of shares already owned.  Foreigners have been relatively wary of buying more shares despite the stock market rally.

In direct investments, defined as ownership of at least 10% of a company, Britain had the largest holding for the third consecutive year at $143 billion.  It was followed by Japan at $118 billion and then the Netherlands, Germany, Canada, France, and Switzerland.

The United States foreign holdings were greatest in Britain, $143 billion, followed by Canada, $92 billion and the Netherlands, Germany, Japan, Switzerland, and France.

But most of the change reflected that the deficit in the broadest measure of trade, the current account, climbed to $148 billion in 1996, the worst showing in nine years.

Until 1986, the United States was the World's largest creditor country.  In that year, it became a net debtor for the first time since early in the century.  Now Japan is the world's largest creditor.
 

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