America standing has dramatically fallen in the world in recent years after our misadventures in Iraq and Afghanistan and the 2008 financial crisis. But the political "dysfunction" over the debt-ceiling the past few months may have put the icing on the cake, according to Kenneth Lieberthal director of the John L. Thornton China Center and a senior Fellow at the Brookings Institution.
"This embarrassing display has reduced the allure of the American political model as a system that gets things done despite divided government, he writes. "By calling into question whether America still "works," domestic political dysfunction is reducing US credibility as a regional and global leader."
The next big debate in Washington is already in progress and stems from the debt-ceiling debacle. It's over how to get the country's fiscal house in order. Today House Speaker John Boehner, is set to give a speech to urge the super committee in charge with reigning in the deficit to overhaul the tax code, or cut taxes. This is another issue Republican and Democrats fail to see eye to eye.
If U.S. lawmakers cannot get their act together, Lieberthal believes this could be the "China Century".
"America is not seen as a paper tiger by any means…no one thinks of us other than number one out there. The question is what the future holds and on that I think there are some really serious worries around Asia," he tells The Daily Ticker's Aaron Task in the accompanying interview. "Many see the U.S. as having peaked on a trajectory that will lead to the U.S. playing a relatively peripheral role to China's future Central role in the region."
But there is hope because we still have some of the best schools in the world, a democratic political system and an economy based on capitalism, says Lieberthal.
"If you look back at American history you cannot make the case we've been very good at avoiding huge crises in he course of our history," he says. "What you can make the case for is we have been better than any other country at recovering from those crises and becoming stronger because of the changes we made in the course of that recovery."
Bottomline: The future is really in our own hands and time will tell if America still has its bounce-back capability.
Tell us what you think! Do you think American can remain on top?