The American Water Co. has an apple-pie name and an important mission — to provide clean drinking water to millions of Americans in 29 states. But a bill in Congress would probably deem the company a security risk and force its sale.

That's because American Water is actually owned by a huge energy conglomerate called RWE AG of Essen, Germany. In the wake of the scuttled sale of American seaport operations to an Arab firm, a bill sponsored by Republican Reps. Jim Saxton of New Jersey and Duncan Hunter of California would require U.S. ownership of all "critical infrastructure" in the United States. That would include anything the Defense Department designates as vital to national security, from ports to bridges to utilities.

Certainly, under this bill, we couldn't allow a German firm to be responsible for America's drinking water. Didn't some of the 9/11 suicide hijackers rent an apartment in Germany to plot their deed?

There is such a thing as being too afraid. This bill would turn fear of foreigners into national economic policy.

It was bad enough for Congress to convict Dubai Ports World of being anti-American without a trial. It would be worse to compound that election-year rush to judgment by declaring to the world that America is essentially closed for business.

The federal government should know, for example, who is making its weaponry. But this bill takes such precautions to a new level of paranoia.

About 80 percent of U.S. port terminals are operated by foreign companies. When pressed on a Sunday talk show about what would happen to the ownership of all those terminals, Hunter backpedaled. He said the operators could have up to five years to divest. If it were such an urgent security matter, why give those risky foreigners five years to get out of our affairs?

The U.S. economy would be vastly different without foreign investment. Currently, America depends on more than $2 billion per day in investment from other countries to keep our high standard of living humming along.

U.S. financial markets reaped nearly $1 trillion in foreign investment last year in securities and Treasury bonds, up 14 percent from the previous year. Countries such as China have been buying up U.S. debt and allowing the U.S. government to keep on spending beyond its means.

If the United States takes steps to discourage foreign investors from buying U.S. companies and investments, the strength of our currency could drop. That would harm the economy with weaker job growth, higher interest rates and an even worse trade imbalance. It also could trigger a damaging backlash against the investments of American companies abroad.

Foreign investment in U.S. assets is a fact of life, and a necessary one.