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Another Casualty of the Debt Battle: America's Image

"Americans always do the right thing. But only after exhausting all other possibilities." Winston Churchill

There is so much that is bad about Washington's debate over the debt ceiling that it's hard to know where to begin. But as someone who lives in England, I can tell you what seems most striking is the degree to which American politicians seem blind to how it plays beyond their shores.

For the most part, Europeans are aghast. You'll see newspaper headlines such as, Russian Roulette in America. How, people wonder, can it be that the government would get itself to the point where it could stop paying its employees?

What all the wrangling in Congress communicates to those outside the U.S. is that Washington politicians either have no sense of the world watching - or they don't care. Either of these is damning. The banking crisis has already provided a painful demonstration, comprehensible to even the most economically ignorant, of the inter-connectedness of global economies.

On one level, everyone still knows that the American economy is a mighty beast and will continue to crank out vast amounts of revenue and products. But already observers are starting to question America's capacity to innovate. Americans may have built the Internet - but why can't it build fuel efficient cars? Or reduce its energy consumption? More seriously, there's growing doubt over America's ability to govern itself effectively. In the UK, a current Guardian poll is pessimistic; the majority of respondents don't believe the crisis will be resolved

None of these doubts is smug. However much Europeans and Americans disagreed over the Iraq war and climate change, there's a persistent affection for American products, culture and optimism. Most Europeans love doing business in the U.S. because the business culture is focused, disciplined and optimistic.

You might ask: Who cares what these smaller economies think of America? Well, clearly the ratings agencies care. And anyone with pensions, investments or savings in dollars cares - and that is most worldwide companies and banks. But the key issue is that America is and must be part of a global market. However parochial its politicians, no economy exists, or can exist, in a vacuum. If America wishes to remain the world's dominant economy, it must prove that it is still functional. It must prove that it is aware that other economies exist and that it can play well with others.

That this crisis is entirely home-grown only makes things worse. The country isn't being held to ransom by other nations but by its own adolescent addiction to games of Chicken. Melodrama makes fine entertainment but poor policy. If, over the next decade, the United States loses its economic dominance, India and China won't provide ample alibis. In this instance, it will have only itself to blame.

Map courtesy of Flickr user asecondhandconjecture C.C.2.0

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