Many Americans, especially Republicans, are remarkably nonchalant about the prospect of the U.S. defaulting on its credit obligations as early as Thursday, barring a last-minute deal in Congress. But the financial markets aren't blasé — stocks have been jittery, and on Tuesday, the credit rating agency Fitch placed the U.S. on watch for a downgrade of its sterling AAA credit score, specifically citing "political brinkmanship."
Other countries are baffled and nervous. "Faced with Washington's march toward a default, the world has reacted mostly with disbelief that the reigning superpower could fall into such dysfunction," says Damien Cave at The New York Times. "A common question crossing continents remains quite simple: The Americans aren't really that unreasonable and self-destructive, are they?"
It's not just voyeuristic gawking at America's dysfunctional government, either: Many countries believe, with good reason, that a U.S. debt default will hurt them more than the U.S. Here's a look at how some other countries are viewing America's flirtation with a debt default:
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
CHINA: This shows the need for a "de-Americanized world"
The Chinese government is America's largest foreign creditor, holding at least $1.3 trillion in U.S. Treasury bonds, so China has a lot at stake in the U.S. debt ceiling fight. Beijing's response to the looming default date reflects that exposure.
"The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations' tremendous dollar assets in jeopardy and the international community highly agonized," says Liu Chang at China's official Xinhua news agency. "It is perhaps a good time for the befuddled world to start considering building a de-Americanized world."
Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place.... A key part of an effective reform is the introduction of a new international reserve currency that is to be created to replace the dominant U.S. dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.
Of course, the purpose of promoting these changes is not to completely toss the United States aside, which is also impossible. Rather, it is to encourage Washington to play a much more constructive role in addressing global affairs. And among all options, it is suggested that the beltway politicians first begin with ending the pernicious impasse. [Xinhua]
Something to bear in mind as you read China's protests is that the country is actually increasing its supply of U.S. Treasuries at a frantic rate. If you want to know what Beijing is really thinking, "watch what China does with U.S. debt, not what it says," cautions Ambrose Evans-Pritchard at Britain's The Telegraph.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
GERMANY: The U.S. is playing chicken with the global economy
The U.S. is the largest market for European exports, so Europe is extremely worried about a U.S. default, too. The fallout from a default would be so catastrophic that "the Lehman Brothers crisis would be insignificant in comparison," says Thomas Straubhaar at Germany's Die Welt (via WatchingAmerica). "This will turn into a real storm with unpredictable consequences."
How is it possible that intelligent people can allow themselves to get drawn into a Game of Chicken?... To fail together rather than yield the victory to the other side is one of the potential outcomes of the Game of Chicken America is now facing. Even the characters in 2 Fast 2 Furious know that there are other solutions. Maybe Barack Obama and John A. Boehner should watch the movie together. That would increase the chances of saving the global economy from a completely unnecessary crisis. [Die Welt]
Germans and other Europeans are also aghast that the 17-nation euro zone was able to find common ground to tackle its own debt crisis, but the two U.S. political parties seem incapable of a similar feat, says Eleanor Beardsley at NPR News.
ARGENTINA: The U.S. is the ultimate hypocrite
For countries like Argentina "that have had their own experiences with financial crises — often followed by American dictates about the need to be more responsible — the brinkmanship in the United States has produced an especially caustic mix of bewilderment, offense, and more than a little eagerness to scold," says The New York Times' Cave.
Argentina isn't alone, Cave notes. Many people in Greece, Mexico, and Russia also "still have searing memories of defaults and their lasting effects, including lost power." And they find it "especially galling" that the dollar's status as global currency means a U.S. default could do them more harm than it does America.
BRITAIN: The sun is setting on America's global supremacy
The British know a thing or two about waning empires. And all great empires — Greek, Roman, Spanish, and British, to name a few — have "at their heart a dominant means of exchange which is very much part of their political and social hegemony," says Jeremy Warner at Britain's The Telegraph. Right now the U.S. dollar is the undisputed global currency, like the British pound and Roman coinage before it.
That this position — what Giscard d'Estaing referred to as America's "exorbitant privilege" — could so casually be put at risk by politicians on Capitol Hill is an extraordinary spectacle that may be indicative of a great power already seriously on the wane... A steady erosion of trust which began with the financial crisis five years ago has reached apparent breaking point with the pantomime antics on Capitol Hill. The search for long-term alternatives to the dollar is on as never before. Regrettably, there aren't any, or not for the time being in any case. Everyone can only look on in horror as the U.S. commits apparent economic suicide. [Telegraph]
POLAND: The "fourth Rome" has bigger issues than credit ratings
If Rome was the first Rome, Constantinople the second, and Russia the third, "today, the U.S. is considered the 'Fourth Rome,'" says Robert Gwiazdowski in Poland's Rzeczpospolita (via WatchingAmerica). "It is said that America, which issues the dollar, the world's transfer currency, and which has the most modern military technology, cannot fall." But that's what was said about the three previous Romes, too. Still, Gwiazdowski adds, "I would not particularly worry about the downgrade of the U.S. credit rating."
When the U.S. began building its power, there were no such things as financial markets and rating agencies. The much bigger problem for the U.S. is the successive destruction of the American dream: That is, the ideal of freedom, the most dangerous American weapon, much more dangerous than military technology...
The belief that everyone has the same right to the "pursuit of happiness," expressed in the Declaration of Independence, created a competitive supremacy that allowed the U.S. to issue a currency that others trust, as well as build the most modern fighter jets. Some have decided, however, that the right of pursuit alone is not enough and happiness must be decreed, and the federal government ensures it best, and this is where they can be very wrong, just like many before them. [Rzeczpospolita]
BRAZIL: Nobody should be happy about the decline of America
"With the spectacle of dysfunction in Washington," America's credit is at risk, says Caio Blinder in Brazil's Veja (via WatchingAmerica). But it's more than just economic trustworthiness at stake in the debt ceiling fight. It's also about "the determination and the ability of the U.S. to act as a global player." And no matter what you think of America, those "doubts are valid, as much for allies as for adversaries of the only superpower on the planet."
In the end, how can a superpower be trusted when it has difficulties in governing, and is showing itself to be incapable of agreement inside the House over the payment of its accounts? The White House...and Congress live in a permanent duel. There exist worrisome geopolitical ingredients... Imagine what is going through the head of the youthful North Korean dictator Kim Jong Un over the credibility of American threats with respect to these weapons of mass destruction. At the very least, the dysfunction in Washington increases the chance of an error in calculation.
The fact is, as the guru Richard Haass of the Council on Foreign Relations points out, the domestic deficiencies and dysfunctions of America directly threaten the "American ability to project power and exercise influence abroad." Bad for the U.S., very bad for the rest of the world. [Veja]
To continue reading this article...
Create a free account
Continue reading this article and get limited website access each month.
register for free
Already have an account? Sign in
Subscribe to The Week
Get unlimited website access, exclusive newsletters plus much more.
Subscribe & Save
Cancel or pause at any time.
Already a subscriber to The Week?
Unlimited website access is included with Digital and Print + Digital subscriptions. Create an accountwith the same email registered to your subscription to unlock access.
Not sure which email you used for your subscription? Contact us
Peter has worked as a news and culture writer and editor at The Week since the site's launch in 2008. He covers politics, world affairs, religion and cultural currents. His journalism career began as a copy editor at a financial newswire and has included editorial positions at The New York Times Magazine, Facts on File, and Oregon State University.
'Horror stories of women having to carry nonviable fetuses'
Haiti interim council, prime minister sworn in
Today's political cartoons - April 26, 2024
