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I don’t envy U.S. diplomats who have to field calls from international officials concerned about the debt ceiling crisis. “Well, yes, the United States certainly could pay its bills,” I can imagine them saying, “but we have a political party that doesn’t want to unless their demands are met.”
“Of course I understand that an economic catastrophe here will affect your country, too,” the diplomat might say in this imagined conversation, “and we’re all hoping that Republicans agree not to hurt us all.”
This came to mind reading a New York Times report on this week’s G-7 summit in Hiroshima.
President Biden left for Japan on Wednesday for a meeting of the leaders of seven major industrial democracies who get together each year to try to keep the world economy stable. But as it turns out, the major potential threat to global economic stability this year is the United States.
That is, of course, a striking summary of an extraordinary set of circumstances, though I’d quibble with the specific nature of the threat: It’s not the "United States" that’s prepared to cause a deliberate economic catastrophe, it’s Republicans in the U.S. Congress.
Nevertheless, as the Times’ report added, our allies have spent many years counting on the United States to serve as the world’s “most important stabilizing force.” That, of course, was before Republican lawmakers embraced government shutdowns, debt ceiling crises, election denialism, and the routinization of “governing by near-death experiences.”
A Wall Street Journal report added this week:
Indonesian Finance Minister Sri Mulyani Indrawati, who attended the G-7 meeting, said the uncertainty every few years around whether Congress will raise the debt limit is starting to undermine faith in the U.S. around the world. “The world is starting to question whether this is only just a game of repetition that can be solved, or the world’s to start to learn to wean ourselves from that kind of situation at the end of the day,” she said in an interview. “That’s not good for the United States.”
This shouldn’t be seen as a random, offhand comment from an exasperated foreign official. On the contrary, it’s a rather ominous warning: The more congressional Republicans threaten international economic stability in pursuit of radical and regressive goals, the less the world feels the need to look to the United States as a global leader.
It’s a point Hillary Clinton emphasized in a New York Times opinion piece last month: “With Russia’s brutal invasion of Ukraine in its second year, tensions with China continuing to rise and global threats looming, from future pandemics to climate change, the world is looking to the United States for strong, steady leadership. Congressional brinkmanship on the debt ceiling sends the opposite message to our allies and our adversaries: that America is divided, distracted and can’t be counted on.”
It’s why Defense Secretary Lloyd Austin and Joint Chiefs Chair Gen. Mark Milley told senators last week that the debt ceiling crisis is great for China, but not us. Director of National Intelligence Avril Haines also warned lawmakers about Russia seizing on these developments to tell the world that the U.S. is gripped by “chaos” and no longer “capable of functioning as a democracy.”
The DNI added, “Almost certainly, [default] would create global uncertainty about the value of the U.S. dollar and U.S. institutions and leadership, leading to volatility in currency and financial markets and commodity markets that are priced in dollars.”
After receiving these warnings, exactly zero congressional Republicans backed off the party’s extortion scheme, apparently unmoved by the international implications.