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The Chinese hold about $1.2 trillion in U.S. Treasuries, as well as about 2 trillion in dollars. They are understandably nervous about the long-term value of those assets.

If they are left holding paper of diminished value, they have only themselves to blame, argues Tilford, the economist at the Centre for European Reform. China bought U.S. assets in part to hold down the value of its own currency, the yuan, and so prop up its exports.

Walter agrees that China and other countries that have been running trade surpluses, including Germany, are likely to suffer if the U.S. does cut down on purchases of consumer goods and other products.

But he said that is not sufficient reason to dismiss the fears expressed by China, the largest foreign holder of U.S. government debt — or those expressed by major domestic investors in Treasuries, such as pension funds.

"If the savers of the world, who have provided their savings to the U.S., feel that the policies of the U.S. amount to not paying back the loans that have been granted, that is a very relevant concern," Walter says.

Despite Friday's downgrade, the U.S. is having no immediate problem selling Treasuries. And, even though Japan has seen repeated downgrades during its years of economic malaise, it's still able to borrow cheaply.

"The debt level of the U.S. is not materially higher than that even of the AAA-rated countries in the European Union," says Daniel Gros, director of the Center for European Policy Studies, a think tank in Brussels.

Many foreign economists note that despite its challenges, the U.S. remains a good investment over the long haul. Unlike struggling countries such as Greece, Italy and Spain, America has control of its own currency. "The debt is not crippling, given its own economic prospects," says Tilford.

The U.S. also has demographic advantages over its major economic competitors. By 2015, the U.S. will be the only developed nation where the working-age population is not starting to shrink.

"The U.S. maintains a higher potential growth rate — even if only for demographic reasons — than most EU member countries, and certainly higher than that of Germany, whose working-age population will soon start to decline rapidly," Gros says.

But foreign observers worry that the U.S. will squander its advantages, that political polarization will prevent the nation's leaders from taking the necessary fiscal steps. They worry that the debt-ceiling debate represents only a preview of future arguments about taxes and entitlements.

Leaders in few other countries can point to such immediate and practical steps that might be taken to address the nation's indebtedness, says Walter, citing an increase in the gasoline tax as just one example. Yet all such roads are blocked politically in the U.S., he says.

Tea Party Republicans will insist that the revenue side of the ledger is "sancrosanct," Walter says, and insist that the debt be addressed through entitlement cuts, while "middle-of-the-road Republicans" and Democrats will block such a course.

"You can listen to educated people in the street or European leaders," says Kleine-Brockhoff. "There's no confidence that the U.S. political system can deliver in the way that markets need to see them deliver."