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World perplexed by U.S. shutdown

Analysts worry about harmful impact on other economies

The Washington Post

As the U.S. government creaked toward a shutdown Monday, the world looked on with a little anxiety and a lot of dismay, and some people had trouble suppressing smirks.

“To be honest, people are making a lot of jokes,” said Justice Malala, a political commentator in South Africa.

Over the years, Malala said, South Africa often has been lectured about good governance by the U.S. as well as the International Monetary Fund and the World Bank, which are heavily influenced by Washington.

“They tell us, ‘You guys are not being fiscally responsible,’ ” Malala said. “And now we see that they are running their country a little like a banana republic. So there is a lot of sniggering going on.”

Washington’s meltdown was barely a blip on the radar across much of the world on Monday. Malala said South Africans were much more concerned with the recent Nairobi shopping mall massacre, Syria topped the news in the Middle East, and the Indian news media was keeping tabs on a corruption scandal involving a politician and a cattle-feed company.

Still, many analysts abroad said they were dumbfounded at the game of political chicken playing out in Washington. They worried that instability in the U.S. will further damage the already shaky world economy.

“It would be great if we didn’t add something more onto this precarious recovery; we really don’t need this,” said Jorge Castaneda, a Mexican academic and former foreign minister.

“Everything that happens in the United States affects us directly,” he said. “The last thing we want right now is another problem in the United States which will make things worse in Mexico.”

In Britain, there was a sense of incredulity about the looming U.S. shutdown. Some commentators worried that the chaos in Washington could damage Europe’s recovery from economic crisis. Others used the moment to trash American politicians, singling out the tea party movement for most of the blame.

In The Guardian newspaper, columnist Michael Cohen decried Sen. Ted Cruz as the Republican Party’s “self-made monster.” He argued that Republicans had reached the “point where Cruz’s brand of crazy, heartless, morally wanton, uncompromising conservatism is now the default position of the party.”

A Times of London editorial slammed President Barack Obama along with the tea party, saying, “An argument that is so bitter, prolonged and apparently incapable of resolution cannot but damage America’s diplomatic standing.”

In South America, where U.S. proselytizing about fiscal responsibility has rankled some countries, economists and policymakers watched the shutdown drama with disbelief.

“It’s incredible, it’s surrealism,” said Jose Antonio Ocampo, a former finance minister of Colombia. “I had to negotiate budgets and debt ceilings in Colombia, and this situation is frankly unreal.”

Ocampo said he was astonished at Republican efforts to overturn Obama’s health care law, a key factor contributing to the potential shutdown.

“I don’t remember, as minister of finance of Colombia, a blackmail so absurd like the one that the U.S. government has had to face,” said Ocampo, who spoke by phone from New York, where he teaches at Columbia University.

“This is not some small economic or political matter,” said Ignacio Arcaya, a former Venezuelan ambassador to the United States. “This is a question that could affect the whole world and have unseen consequences.”

In Pakistan, analysts note that the country’s 66-year-old national government has never had a formal shutdown, despite three coups, decades of military rule and dire economic challenges.

Economist Saqib Shirani said there “are lessons to learn” for Pakistan from events in Washington. In a country with 12 major political parties, he said, “there must be political consensus on economic issues, and taking the political bickering to extreme can backfire.”

“But we are good compared to the U.S. on that,” he said. “Major political forces here are usually able to achieve consensus.”

In India, a government minister said the U.S. problems are similar to an ongoing struggle between his government and political opponents trying to block its policies. “It’s heartening to note that administrative paralysis is not unique to a particular democracy,” said Manish Tewari, India’s information and broadcasting minister.

In the Middle East, few expressed interest in a crisis seen as complex, distant and unlikely to affect the Arab world. But in a region where political strife stemming from the 2011 Arab Spring uprisings has battered economies, some analysts were sympathetic to Washington’s politically driven financial woes. “It’s a political struggle that is being played out on the economy’s battlefield,” said Rashad Abdo, a finance professor at Cairo University.

The U.S. crisis has received only fleeting attention in Moscow, where the Russian government is wrestling with its own budget problems. In past years, President Vladimir Putin has scolded the United States for what he has called profligate economic policies. But this time Putin has been silent.

Others seemed to take a certain measure of satisfaction from problems in the world’s richest nation. German officials have frequently seized on fiscal-policy chaos in the U.S. Congress as a reason to disregard American advice about their handling of Europe’s financial problems.

  • Ken5745

    The world should not be perplexed by America’s latest shutdown. There were already more than 15 shutdowns in the past 30 years.

    Unless one is blind one can see that America’s troubles today resemble the economic turmoil seen before the fall of Ancient Rome. Though Ancient Rome’s troubles were not exactly the same as those in America today the parallel is hard to ignore.

    Ancient Rome was a Super Power then. Today America is a Super Power.

    Rome had an Empire’ that was once the largest in the known world.

    Today the US has a military ‘Empire’ that is even bigger in
    scale than that of Ancient Rome, with over 1000 military and supply bases all over the world and it spends $2 Billion EACH day to fund the military, entirely from loans from other nations.

    Both spent well above their means to keep their respective “Empires” functioning. Rome finally succumbed to its debts after tinkering with its currency and it collapsed in the throes of high inflation.

    Today America’s national debt is $16.7 Trillion, which it cannot pay back. The 2014 budget which starts on 1 Oct 2013 has not been passed by Congress which means the Govt has to be shut down.

    Of the $3.8 Trillion proposed budget, $1.2 Trillion has to be borrowed from countries like China, Japan, Saudi Arabia, Germany, etc as well as from the foreign-owned Federal Reserve bunk, which is as ‘Federal’ as Federal Express.

    The FED can print any amount of Federal Reserve Notes (FRN) it wants, which miraculously turn into US dollars when they reach the inner sanctum of the US Treasury.

    While Ancient Rome tinkered with its currency, today the FED prints $85 Billion every month out of thin air to bail out the banks and the US Treasury.

    As if that is not bad enough or ominous enough, on Oct 17 the debt ceiling has to be increased so that America can borrow the $1.2 Trillion needed to supplement the 2014 budget.

    If the debt ceiling is not increased, then America will go
    into default, just like Argentina did in 1982. Then all hell will break loose. It will roil world markets.

    In Bush Jr’ s 8 years in office he added about $6 Trillion to the National Debt. Obama in his first term alone added another $4 Trillion.

    And if that colossal debt does not nudge America into skidding over a fiscal cliff, then consider this.

    America has a hidden unfunded debt, which covers long term entitlements like Social Security, Medicare and Medicaid, not taking the liabilities of Obamacare into consideration and folks the amount is a staggering $240 Trillion, which America, in its wildest dream has no means to honor.

    If all the humongous debts above do not make the Founding Fathers spin in their graves, then what will?

  • 思德

    Thank goodness there was a government shutdown. It shows my country still has some fight left in it instead of marching brainlessly towards the untold glories of socialism.

    What none of the media bothers to mention is that Obama and the Democrats won’t negotiate even one piece of a bill ZERO conservatives voted for. Although Obama sees fit to break the law and modify it after for all his friends to benefit (by being able to abstain, unlike the rest of us). Republicans could have voted for the budget to go on for a couple of weeks while they negotiated over Obamacare in committees- but they don’t want to, because they are wanting 100% of that trash bill and won’t change.

  • Me Piper

    I’m rather happy about the U.S. government shutdown. It’s a good thing and what should happen now is that their government stay shut permanently, followed by the country itself. Contrary to the propaganda and mythology, the U.S. is actually the worst country in the world. Canada and Mexico, which are better countries, ought to annex large portions of the U.S., or perhaps the U.K. can take over again. Or, maybe the country should revert to the Native Americans and this 237-year old anomaly/abomination can finally disappear from history.