What are the impact of recent budget deficit of U.S. government on foreign investment in the US?

Analyze the impact of recent budget deficit of U.S.
government on foreign investment in the United States.

I just need some ideas to get my paper started off, If anyone can help I would appricated it.

Go take a look at the TIC report on the treasury.gov site for information on foreign investment in Gov bonds. This report will give you a bunch on info on historical investment, etc. etc.

The real question you should be asking is what the future impact will be? If China and Japan decide that they have had enough of U S dollars, there will be hell to pay. And I doubt that hell will accept U S dollars.

Actually, that is not true. There was an article last week on MarketWatch that was very good in explaining that, even though the Chinese and Japanese are letting loose our Treasuries, they are also buying an awful lot of equities in the US. They know that this is the safest investment on planet Earth.

It is called
Debt and the salesman
Do shifting foreign appetites for U.S. bonds threaten economy?
by Polya Lesova
The article can be found here: http://www.marketwatch.com/News/Story/St...

Oh, and remember- Speel Chekc!

In a nutshell, high budget and trade deficits places pressure on the ability of the U.S. to pay it's debts. The higher the deficits run, the greater the risk the U.S. won't be able to pay it's bills. As the deficits mounted, the dollar sank against the major world currencies. Continued increases in the deficits will put additional pressure on the dollar and as the dollar declines, foreign investors are going to be wary of placing money in dollar and dollar denominated investments.

This is a very simplistic explanation. Hope it helps.