Here's the most amazing statistic: The United States -- traditionally the bread basket of the world -- was a net importer of food in 2005.

According to the Census Bureau, in 2005 we exported foods, feeds and beverages valued at $58.8 billion. We imported food, feeds and beverages worth $68.1 billion. While food used to be a major source of export revenues, it's now just another source of debt, another part of the $726 billion balance-of-payments deficit we suffered in 2005.

One result of our $14 billion a week deficit is that we have devalued our currency. Our dollar is so weak that according to the CIA it's lost value against the Albanian leke and the Vanuatu vatu -- as well as the euro, the pound and the ruble.

Because the U.S. has the largest and most secure marketplace in the world we have certain advantages unavailable to other debtor nations. Foreigners readily accept our cash in exchange for their goods and services so we're able to trade bits of paper and electronic credits for cars, petroleum and computers.

Increasingly, though, foreign investors don't want our cash, they want our assets. Thus, for example, the Chinese firm CNOOC attempted to buy the Unocal oil company for $18.5 billion and was blocked while Dubai-owned DP World acquired a British company that operated six major U.S. ports, an arrangement that at this writing also seems to have been effectively derailed.

The issue here is not whether the collapse of the Chinese and Dubai deals is "fair" or not. They're over and done. Instead, the more difficult question is this: What happens next?

Traditionally, overseas investment has been sought in the U.S. -- but within limits. Quoting the Economist Intelligence Unit, the 2006 Index of Economic Freedom published by the Wall Street Journal and the Heritage Foundation says that "foreign investments face restrictions in banking, mining, defense contracting, certain energy-related industries, fishing, shipping, communications and aviation." The 2006 report adds that the "purchase of real estate is unrestricted on a national level, although purchase of agricultural land by foreign nationals or companies with at least 10 percent foreign ownership must be reported to the U.S. Department of Agriculture. Some states impose restrictions on purchases of land and other types of investments by foreign companies."

Compared to other countries, says the report , we're an investors' paradise, tied with Australia as the 9th most open economy in the world. In comparison, China is ranked 111th while the United Arab Emirates is 65th and Iran is 155th.

The growing problem that we now face is this: The overseas owners of our debt will only carry us for so long. Like all investors, they are always searching for a better return on their money. To do better they might draw down their stock of dollars and invest elsewhere; they could use their excess dollars to purchase U.S. assets; or they could hold back investing in U.S. dollars until they get more interest.

To a large extent, we would be smart to sell selected assets. Once foreign funds are invested in the U.S. we reduce our debt and increase domestic employment. Historically, we have welcomed foreign investment in most areas and it has been very much to our benefit.

As to interest, the decision to buy less U.S. debt would raise domestic interest rates, including mortgage costs. Particularly if you need new financing or have an ARM, what happens overseas is increasingly important to you.

One catch is that foreign holdings of U.S. dollars may be so huge that overseas owners effectively cannot sell. A massive sell-off would make such assets less valuable, thus producing vast losses and allowing U.S. and other investors to buy back our debt at discount.

There is, of course, a better way to solve our balance-of-payments problems then depending on the decisions of others. Rather than higher interest levels or more foreign ownership we can start with a tax on gasoline consumption and mandate higher levels of fuel efficiency. Such policies will significantly reduce the flow of dollars going overseas, provide new government revenues at home, stimulate now-moribund domestic auto production and hold down mortgage rates.

Right now there is much talk regarding "energy," but we don't have a problem with electrical supply, windmills, solar energy, coal production, ethanol from corn or nuclear power. Our supply problem, and our key import problem economically and politically, is with oil.

The time has come to do something about our balance-of-payments deficits -- while we have a choice. The choice will be painful, but not as painful as future choices if we now do nothing.

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