While there’s global relief that Washington has returned to work and will repay its bills, the entire shutdown fiasco will have lasting implications for the United States.
The shutdown forced President Barack Obama to cancel a key Asia visit and likewise prompted the cancellation of a 17-nation gathering of Pacific air leaders.
Indeed, the combination of the shutdown and sequestration telegraphs to America’s friends, foes and competitors alike that there is something seriously wrong with the world’s leading power.
It’s also sowing doubt in the minds of leaders around the world about America’s credibility as a reliable ally, and presenting China and Russia and other strategic challengers an ideal opportunity to undermine the United States.
China — the biggest holder of US debt and dollar assets — jumped on these events. Its state-owned news service called for a “de-Americanized” world, including creating a new global reserve currency.
Why retain the dollar as the world’s reserve currency, they ask, when some in Washington consistently flirt with defaulting on its debt as a political bargaining chip? It’s becoming a valid question.
To say that’s devastating to America’s global brand is an understatement, all at the hands of a small cadre of radical, but powerful, American politicians.
America’s ragged right fringe, the so-called tea party Republicans, fail to understand their nation is in an incessant ideological competition on the world stage and that authoritarian states such as China and Russia, once poor, are today economically affluent and pushing their own systems as an alternative model, one that trades individual freedom for increased stability.
While nations around the world are drawn to America for a vast array of reasons, from popular culture to its everyman ideals, for its shared values and role as security partner and guarantor, Washington’s perpetual fiscal and political crisis is increasingly a strategic liability. America must put its fiscal and political houses in order to ensure the security of its own global interests.