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Washington deadlock: Foreign reaction morphs from amusement to alarm (+video)

America’s image as a leader is taking hits around the world over the government shutdown, and now a looming first-ever default is adding real alarm over what it could mean for the global economy.

Dartmouth College's Danny Blanchflower discusses how Europe is viewing the US government shutdown. He speaks with Pimm Fox on Bloomberg Television's 'Taking Stock.' (Source: Bloomberg)
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When Egyptian diplomat Mahmoud Karem arrived at Washington’s Dulles International Airport last week, he was shocked to find that the US government shutdown had closed all but a few passport control stations.

The result was very long lines – and a black eye for America, Ambassador Karem says.

“It’s true that two other international flights landed at about the same time, but I would expect Washington to be prepared for that,” says Karem, a member of the Egyptian National Council for Human Rights. Instead, “We had to stand in the line for three hours, there was no place for the old people to sit, and children were crying,” he says. “It was very bad for America’s image.”

America’s image is taking hits across the globe as a result of the government shutdown – and now a looming first-ever default is adding real alarm to what to this point have been mostly expressions of annoyance, incredulity, and even humor over the political dysfunction gripping the world’s sole superpower.

As Christine Lagarde, managing director of the International Monetary Fund, said in a speech last week, “The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy.”

Blasting what she called the “political brinkmanship” in Washington that threatens world markets as well as American families, Ms. Lagarde pronounced it “mission-critical that this be resolved as soon as possible.”

Around much of the world, the shutdown and threatened default are feeding already growing doubts about America’s global leadership role, while confirming for many, especially in Asia, America’s retreat from its top ranking in the world economy.

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