July 29th, 2011
04:36 PM ET

World reacts to U.S. debt crisis

An editorial and op-ed round-up from the world's English language newspapers.

SAUDI ARABIA—“[I]nternational markets are becoming increasingly nervous about the fate of the dollar, the world’s only reserve currency and in times past a haven for anxious investors,” says an editorial in the Jeddah-based Arab News.

“Saudi Arabia is paid in dollars for its oil. Our currency is tied to the dollar. The Kingdom has approximately 2 trillion invested abroad, the greater part of it in the United States. The value of those investments, the value of our oil earnings and the value of our currency are all under threat as politicians in Washington grandstand for their constituents and argue bitterly from two utterly polarized positions.”

AUSTRALIA—““Had Australia – or any other country – tried to build up debt on the U.S. scale, their currencies would immediately have been punished and their folly quickly exposed, ” says an editorial in the Sidney Morning Herald.

"That has not happened to Washington. The arrival of what might, following Paul Keating, be called the United States' banana republic moment has been long delayed, and the delay will make the shock of it worse.”

CANADA—“For the U.S. to begin defaulting on its obligations would be catastrophic, not just for Americans, but for all those who depend on U.S. stability and leadership,” says an editorial in the Toronto-based Globe and Mail.

“The power the U.S. exercises on the world stage comes largely from its economic strength. Default would demonstrate the U.S.’s inability to meet its commitments. In addition to the economic consequences, that could lead to a loss of its moral authority in international affairs – and that would be a very bad thing.”

UNITED ARAB EMIRATES—“While the U.S. is used to the spectacle of noisy squabbles in Congress, the current game of chicken at the heart of the world's leading economy is unsettling to say the least,” writes Alan Philips in the Abu Dhabi-based National.

“In past years, the raising of the U.S. debt ceiling has been treated as a technical issue to be nodded through by Congress. But this year the ideological battles lines are drawn between those who demand cuts, and those who see borrowing yet more money as the only way. But there is another point of view which is gaining attention. This view holds that there is nothing exceptional going on here. Rather, the progress of liberal democracies from affluence to the brink of bankruptcy – and beyond – is normal, and indeed inevitable.”

CHINA—“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,” writes Deng Yushan in China’s government-run Xinhua.

“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.”

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Topics: Debt Crisis • Global • Listen up!

soundoff (377 Responses)
  1. david k lashley

    The middle class in America is being wiped out.
    The 22 statistics detailed here prove beyond a shadow of a doubt that the middle class is being systematically wiped out of existence in America.The rich are getting richer and the poor are getting poorer at a staggering rate. Once upon a time, the United States had the largest and most prosperous middle class in the history of the world, but now that is changing at a blinding pace.
    So why are we witnessing such fundamental changes? Well, the globalism and "free trade" that our politicians and business leaders insisted would be so good for us have had some rather nasty side effects. It turns out that they didn't tell us that the "global economy" would mean that middle class American workers would eventually have to directly compete for jobs with people on the other side of the world where there is no minimum wage and very few regulations. The big global corporations have greatly benefited by exploiting third world labor pools over the last several decades, but middle class American workers have increasingly found things to be very tough.
    Here are the statistics to prove it:
    • 83 percent of all U.S. stocks are in the hands of 1 percent of the people.
    • 61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.
    • 66 percent of the income growth between 2001 and 2007 went to the top 1% of all Americans.
    • 36 percent of Americans say that they don't contribute anything to retirement savings.
    • A staggering 43 percent of Americans have less than $10,000 saved up for retirement.
    • 24 percent of American workers say that they have postponed their planned retirement age in the past year.
    • Over 1.4 million Americans filed for personal bankruptcy in 2009, which represented a 32 percent increase over 2008.
    • Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.
    • For the first time in U.S. history, banks own a greater share of residential housing net worth in the United States than all individual Americans put together.
    • In 1950, the ratio of the average executive's paycheck to the average worker's paycheck was about 30 to 1. Since the year 2000, that ratio has exploded to between 300 to 500 to one.
    • As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.
    • The bottom 50 percent of income earners in the United States now collectively own less than 1 percent of the nation’s wealth.
    • Average Wall Street bonuses for 2009 were up 17 percent when compared with 2008.
    • In the United States, the average federal worker now earns 60% MORE than the average worker in the private sector.
    • The top 1 percent of U.S. households own nearly twice as much of America's corporate wealth as they did just 15 years ago.
    • In America today, the average time needed to find a job has risen to a record 35.2 weeks.
    • More than 40 percent of Americans who actually are employed are now working in service jobs, which are often very low paying.
    • or the first time in U.S. history, more than 40 million Americans are on food stamps, and the U.S. Department of Agriculture projects that number will go up to 43 million Americans in 2011.
    • This is what American workers now must compete against: in China a garment worker makes approximately 86 cents an hour and in Cambodia a garment worker makes approximately 22 cents an hour.
    • Approximately 21 percent of all children in the United States are living below the poverty line in 2010 – the highest rate in 20 years.
    • Despite the financial crisis, the number of millionaires in the United States rose a whopping 16 percent to 7.8 million in 2009.
    • The top 10 percent of Americans now earn around 50 percent of our national income.
    Giant Sucking Sound
    The reality is that no matter how smart, how strong, how educated or how hard working American workers are, they just cannot compete with people who are desperate to put in 10 to 12 hour days at less than a dollar an hour on the other side of the world. After all, what corporation in their right mind is going to pay an American worker 10 times more (plus benefits) to do the same job? The world is fundamentally changing. Wealth and power are rapidly becoming concentrated at the top and the big global corporations are making massive amounts of money. Meanwhile, the American middle class is being systematically wiped out of existence as U.S. workers are slowly being merged into the new "global" labor pool.

    July 31, 2011 at 11:02 am | Reply
    • All too obvious

      Too true.

      July 31, 2011 at 4:22 pm | Reply
  2. fridy

    Is funny how cnn asking how the world sees US?I don't think politicians give a damn how the world sees US as long as they gain a political ground.

    July 31, 2011 at 12:02 pm | Reply
  3. V

    Wow, I have no idea what is worse, The politicans in D.C. or the American people. Just seeing the responses being posted makes me think that the main problem is not just with our government. We seem to be more focesed on who wins than solving the problem. No matter what is passed, we will be at the same place just down the road. All we are hearing if just talking points not how it truly works, and I want to know what else has been agreed to behind close doors with these bills.

    You know what. Just send me their with a camera crew( so that the public knows that I'm not playing with them). And solve this problem that seems to never end. I am just tired with government telling us that they are the only ones that can fix this. If government was that great then they would not get power from the people.

    We need real solutions not talking points or promises. Stop making the people afraid of it and telling them who is to blame for it because both sides are not clean. Just stand up and say, "blame me for all the problems, now lets all come together and see what we can do for our Country."

    July 31, 2011 at 12:44 pm | Reply
  4. All too obvious

    I have spent the past hour reading all of the posts here. Some have made valid points. Some points made here are just foolish and ill-informed. Let's look at the obvious:
    1st- Most of the people that run our country are elitetist and are in it to achieve thier own agendas, be it for power or money.

    2nd- For too long the U.S. has tried to be the world police. In doing so, not only do we spend vast amounts of TAXPAYER money, but also end up alienating those we try to help more often than not.

    3rd- We have become THE free bank, that is to say, we give away way to much money to countries that never have to repay the "loans" we provide. The burden is in turn put on the taxpayer only to have the countries we make loans to turn around and bite us.

    4th- Illeagal aliens recieve benifits that they have no right to. Why should the American taxpayer provide free health care, education, ect. to those here illeagally?

    5th- Our government consistenly, to get a vote on legislation, cuts deals with states to build "bridges to nowhere".

    6th- Why do we worry about being protectionist when other countries manipulate thier currencies?

    7th- We give tax breaks to corporations that export jobs that support the tax base. No jobs, no tax base.

    8th- Why is it that we allow politicians to recieve a retirement benifit for having served only 1 term? Why do we allow them to vote for thier own pay raise? Why do we not have term limits? The only job I know of where you can screw up and not get fired.

    9th- Why do we not use the money we send overseas for our crumbling infrastucture? This alone would create jobs, expand the taxbase and improve the country as a whole.

    10th- Why is it that our millitary may not get paid, yet congress will?

    The list could go on for pages. I have served my country in 2 wars, paid my taxes and have done all I can to be a productive member of our society. The U.S. is a great country. But it is being torn apart by political folley and greed. It seems as if our goverment is hell bent on the rich getting richer at the cost of the average American, who IS the backbone of the country. We can no longer tolerate foolishness in our leadership. Both Democrats and Republicans share equally in the blame for the mess we are in. If we were look back at the founding fathers, they all had different ideas as to how and what our country should be, yet they found the common ground amongst them and went forward. I truly believe that if they knew what was going on now, they shake thier heads in disgust.

    July 31, 2011 at 4:17 pm | Reply
  5. Bonita

    Can't the Chinese yuan be made into the international currency? We live in such a dependable world!

    July 31, 2011 at 4:19 pm | Reply
  6. Bonita

    Is this crisis real or is US government aiming something else at this time being?

    July 31, 2011 at 4:21 pm | Reply
  7. Tallic

    Change comes from 2 ways: Discussion and Force. Discussion has failed. Too bad there's no real option for force in this country.

    July 31, 2011 at 4:22 pm | Reply
  8. T klimchuk

    No money no oil i doubt the oil prducers will accent IOUs

    July 31, 2011 at 9:23 pm | Reply
  9. Aaron L.

    It's all sugar-coated lies. They won't tell you what they really think of "Amerikans."
    As an American citizen living in Canada, I must tell you that they really don't like us that much. If you hear otherwise it's a blatant lie. The only people they don't like more is Quebec.

    July 31, 2011 at 10:58 pm | Reply
  10. Kevin in Atlanta

    I could swear a Democratic Republic was based on compromise. Or perhaps my liberal, marxist, leftist high school social studies teacher was lying to me...

    I just don't know anymore...

    August 1, 2011 at 12:20 pm | Reply
  11. Albert Alexander Lucio

    Less concerned about domestic political gamesmanship over debt ceilings than with the ongoing Sino-Russian discussions about an international reserve currency. If petroleum were to price on the basis of a competing reserve currency the U.S. would not be prepared for the inflationary shock.

    November 13, 2011 at 8:53 pm | Reply
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    December 8, 2011 at 1:03 pm | Reply
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  16. Dave Lych

    I've been listening to the news, like you have, as we are pummeled with the details of the only two candidates the Twenty First Century can offer? Really? – And frankly, to me both Romney and Obama are hell bent on collapsing this economy in favor of a corporate owned America; they will never going to get my vote. So heads up, news media land. I want choices, and not the garbage offerings you throw at us. (Palin, Bachman)
    The rest of the work's view of us is critical. If the international currency, which is now dollars, is dropped because it is becoming worthless, we will be in a work of hurt you can not begin to fathom – We could all loose our jobs and homes.
    I want more choices for President, and I want good choices. I want real debates and lots of them – put them up on PBS. I want people with skills and I don't care about perfect hair. If you have to have to rely on a teleprompter, I wont vote for you. Either we get hold of our government, clean it up, toss out the bums, and balance the books, or its curtains for the good ole, USA

    July 26, 2012 at 6:58 pm | Reply
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