The United States is becoming less competitive as a nation -- because of its huge budget deficits and problems in its financial markets -- according to The World Economic Forum's Global Competitiveness Index.

The Switzerland-based group said the U.S., which was rated number one in the world two years ago, has dropped to fourth place behind Switzerland, Sweden and Singapore.

The WEC said that although America has excellent businesses, the nation has problems with its huge deficits, growing government debt, and falling trust in politicians and corporate ethics.

"The U.S. has very important strengths, but macroeconomic stability was a problem beforehand and the crisis exacerbated it," WEC Senior Economist Irene Mia told The Washington Post.

A nation's ability to respond to a financial crisis or make investments that could enhance productivity can be limited by government debt, the Post reported. Debt can also lead to higher interest rates.