I had lunch yesterday with a European diplomat, and naturally the
conversation turned to the debt crisis. Her mortgage back home has gone
up by a third, and who does she blame? America. People in this town have
short memories, she complained. Who tipped the rest of the world into
recession in 2008 over the toxic loans? As a direct result, the U.K. has
embarked on massive spending cuts that are throwing people out of jobs
every day. And let’s not even mention Greece, whose profligate ways have
threatened the very existence of the euro.
So at this very fragile time for the world economy, what does the U.S. do? It has allowed a fringe group of debt-ceiling deniers to play politics with the rest of the globe. Because in this globalized world, what happens in America is bound to influence other countries. It is irresponsible and reckless, and the last adjective is not mine, it’s from the official media in China, which owns America’s debt.
The so-called solution to the debt crisis could still have grave consequences if America’s triple-A credit rating is downgraded. I can’t find a single commentator who is applauding the backroom compromise deal between congressional leaders and Obama. But I think that the real damage to international confidence in the U.S. came from the sorry spectacle of the last two weeks, which almost pushed the country off a cliff over today’s debt-ceiling deadline and sent the markets into freefall. Open your eyes, folks — if the world is tipped into another recession, it will be clear who is to blame. This is not just about America; the whole world is eating a Satan sandwich.