"My message to the world is the United States always has paid its bills and it will do so again. But I think they're not just looking at what I say; they're looking at what Congress does," Obama told a White House news conference on Tuesday. (Agencies)
Obama said every country, every democracy in particular, has tussles over the budget.
"And I think most world leaders understand it. They've themselves been through it if they're in a democracy," he said.
"What you haven't seen before, I think, from the vantage point of a lot of world leaders, is the notion that one party in Congress might blow the whole thing up if they don't get their way. They've never seen that before. And that does make them nervous, particularly given what happened in 2011," he said.
"I mean, keep in mind we've been here before, right? We saw what happened in 2011. I think the assumption was that the Americans must have learned their lesson, that there would be budget conflicts, but nobody again would threaten the possibility that we would default," Obama said in response to a question.
"When they hear members of the Senate and members of Congress saying maybe default wouldn't be that bad, I'll bet that makes them nervous. It makes me nervous. It should make the American people nervous, because that's irresponsible. It is out of touch with reality," Obama said.
"It is based on a flawed analysis of how our economy works. You cannot pay some bills and not others and think somehow that the fact that you're paying some bills protects you from a loss of creditworthiness," he said.
"That's not what happens in our own personal lives. I don't know why people think that that's how it works for the United States government," he said.
Hours earlier, the IMF warned of adverse impact on the global economy if the US defaults if the debt ceiling is not raised by the Congress.
"Failure to lift the debt ceiling would, however, be a major event. Prolonged failure would lead to an extreme fiscal consolidation, and surely derail the US recovery," Olivier Blanchard, IMF Economic Counselor and Director of the Research Department, told reporters at a news conference being held at its headquarters in Washington.
"But the effects of any failure to repay the debt would be felt right away, leading to potentially major disruptions in financial markets, both in the US and abroad," he said.
"We see this as a tail risk, with low probability, but, were it to happen, it would have major consequences," Blanchard said.
Obama regrets missing Asia trip with trade talks
Obama says he regrets not being in Asia this week to help negotiate a trade deal that could create US jobs.
Obama says he doesn't know for sure if he would have been able to secure a trade deal with a dozen countries called the Trans-Pacific Partnership. But he told reporters at the White House, quote, "It doesn't help that I wasn't there."
Obama cancelled his trip to four Asian countries to deal with the partial government shutdown. He said he's sure "the Chinese don't mind" that he's missing the trip so they can push their agenda without US competition.
Obama said he would characterize the short-term impact as "missed opportunities," but he doesn't think it will do lasting damage to US influence in the region.
"My message to the world is the United States always has paid its bills and it will do so again. But I think they're not just looking at what I say; they're looking at what Congress does," Obama told a White House news conference on Tuesday.