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Aruba, November 14, 2013 - The damage Washington’s recurring games of debt default chicken does to America’s reputation tends to be fairly anecdotal. Government employees sent home without pay doesn’t move public opinion, which appears to assume that anyone with a future pension is beyond pity.

So, too, are abstract calculations about the reputational harm done to America’s brand — our ability to lead on the global stage. To such arguments, the average American answers, “Why should I care what foreigners think?”

One reason is foreign direct investment in the United States, known as FDI. That's the money foreign companies invest in factories, offices and other employment-boosting enterprises based on US soil. Over the past 30 years, FDI has grown from a small to an important creator of jobs and economic activity. During that period the US has gone from a somewhat inefficient, waning manufacturing power to the global leader in services, high technology and innovation. But so far this year foreign capital inflows are lagging behind even the anemic 2012 figures. The US brought in $66 billion in the first six months of 2013 versus $84 billion in the first half of last year.

The numbers are troubling and could suggest that traditional heavy investors — from German and Japanese carmakers that site plants on US soil to the Chinese, Gulf and other sovereign wealth funds (SWFs) that buy America’s debt — may have decided their money would best be spent elsewhere.

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