What the international press is saying about the U.S. debt debacle

With just five days remaining for Congress and the White House to agree on a deal to solve the U.S. debt limit crisis, it’s not just Americans who are frustrated and concerned about the prospects of a government default.

The most strident commentary on the crisis has come from China — no surprise, since Beijing’s long-standing affinity for U.S. treasury bonds has made it the largest foreign holder of U.S. debt. An editorial cartoon in China Daily today shows snowballing U.S. debts threatening to crush the rest of the world. A column from state news agency Xinhua yesterday had harsh words for the leaders in Washington:

When countries across the world hold breath watching the debt negotiations between the Democrats and Republicans in Washington, they are once again "kidnapped" by U.S. domestic politics.

As the Aug. 2 deadline approaches for Washington to raise its borrowing limit and avoid a catastrophic debt default, deeply divided U.S. politicians remain stubbornly engaged in what is widely seen as a game of chicken.

Given the United States’ status as the world’s largest economy and the issuer of the dominant international reserve currency, such political brinkmanship in Washington is dangerously irresponsible, for it risks, among other consequences, strangling the still fragile economic recovery of not only the United States but also the world as a whole.

Meanwhile, a number of European outlets have lambasted the Tea Party for its role in the crisis. Der Spiegel‘s Washington correspondent, Gregor Peter Schmitz, excoriates the G.O.P.’s libertarian wing:

Democracy depends on compromise and the American government depends on all branches working together. The Tea Party movement shuns both, preferring instead to drive the state into bankruptcy. On principle.

At the Guardian, editorial cartoonist Steve Bell takes the attack even further, comparing Tea Party members to Nazis. But Spain’s El Pais is thankfully more measured, assailing both Republicans and Democrats for their "accumulated rigidity" and "mutual distrust," but also singling out Tea Party fundamentalism for "diminishing … the possibility of reasonable arguments."

Over in France, Les Echos investigates whether credit rating agencies Moody’s, Standard & Poor’s, and Fitch are more kind to the United States than toward European countries. The paper cites multiple European officials who suspect the agencies of being "very sensitive to criticism targeting them in the U.S. and of turning a blind eye to such criticism here in Europe." (translation provided by France24).

The Tehran Times, a pro-government Iranian daily, uses the debt crisis to criticize U.S. military intervention in the region. In a brief and somewhat rambling column, University of Tehran professor Ebrahim Motaqi illuminates what’s behind the troubled Treasury:

Perhaps one of the main reasons for this situation is the huge cost of U.S. involvement in regional and international military conflicts. …

Since 2001 the mounting expenditures of wars in Afghanistan and Iraq have created a huge threat for U.S. national security which resulted in the devastating economic recession of 2008. Accordingly, in the current situation, the U.S. economy is gripped with stagnation. In fact, the current U.S. budget deficit is a direct result of such a process which began with the invasions of Afghanistan and Iraq.

On the subject of defense spending, it’s worth noting a Congressional Budget Office report released on Wednesday about competing budget plans proposed by Republican Congressional leader Rep. John Boehner and his Democratic counterpart, Sen. Harry Reid. The report said that Reid’s plan would save almost three times the amount that Boehner’s would, mostly because Reid’s version includes more than $1 trillion in savings from the drawdown in Iraq and Afghanistan — although a closer look at the math suggests that the $1 trillion figure is deeply misleading.

That said, even under CBO projections, neither plan appears to have enough savings to fully offset the debt ceiling increase needed to secure U.S. finances through 2013. Some crisis, indeed.