In September 2007 Gerrit Six put Belgium on eBay. It was day 100 of his country's attempt to form a government and an exasperated Six suggested selling it for parts. He offered free delivery but made it clear the country was secondhand and anyone who bought it would be saddled with $300bn in national debt. EBay eventually took the ad down, but not before the bidding reached €10m. A government wasn't formed for another three months. A few years later Belgium went 589 days without a government.

At the time the German paper, Die Tageszeitung, described Belgium, home to the headquarters of Nato and the EU with a per capita income of $38,100, as the "most successful 'failed state' of all time". Now the US is giving it a run for its money.

Not in terms of longevity – at the time of writing the American federal government has been closed for almost a week – but in terms of dysfunctionality. Belgium's stalemate was shaped by the challenges of a linguistic divide that reflects an economic imbalance. In other words, it was about something.

The US government shutdown has been prompted by the party that recently lost an election trying to overturn a law it doesn't like. Having failed to stop healthcare reform in the legislature, the supreme court and during the presidential election, House Republicans are now refusing to pass a budget until the reforms are delayed. This is their compromise position. They originally wanted it scrapped. It's less a shutdown than a shakedown.

Predictably, Obama is adamant that the Grand Old Party should not extort him out of his most prized legislation. Moreover, negotiating under these circumstances sets a dangerous precedent in which the nation can be held hostage to overturn laws that have been democratically settled.

Even most of those who oppose healthcare reform do not believe shutting down the government is a winning strategy. Polls show a huge majority of Americans disapprove of the shutdown and far more blame the Republicans than the Democrats, even though neither party comes out looking particularly accomplished. In practical terms the protest is largely futile. A key provision of the healthcare reforms kicked in the day before the shutdown and will continue whether the federal government is working or not. So Republican plan A is to close down the government until reforms are delayed, even though their demands have been rejected and the reforms are under way. There is no plan B, beyond belligerence.

"We're not going to be disrespected," insisted Republican Congressman Marlin Stutzman last week. "We have to get something out of this. And I don't know what that even is."

If this continues for another few days, the damage will be limited. So far, the shutdown barely affects most peoples' daily lives. National parks and monuments are closed, some government websites are down and some regulatory bodies aren't working. But by 17 October Congress must agree to raise the debt ceiling so that the US can pay its bills. Republicans have used this as a bargaining chip before. If this standoff over the budget were to bleed into talks about the debt ceiling then the US risks defaulting, with ramifications for the global economy. At that point you wouldn't be able to give the country away on eBay.

There are three main reasons the country has reached this position. First, the US is more polarised politically than in recent memory. There are fewer self-described moderates and far more conservatives and liberals among Republicans and Democrats respectively than there were in 2000 – the year the nation was evenly split between George Bush and Al Gore. The divide is not just ideological but geographical. In his book, The Big Sort, Bill Bishop explains that in 1976 roughly a quarter of Americans lived in counties where the presidential victor won by 20 points or more; by 2008, that figure was up to a half.

Second, if that weren't enough, the electoral constituencies have been so shamelessly gerrymandered that consequences for acting in an extreme manner are rare. Electoral boundaries, in most areas, are drawn not by independent commissions but local politicians. Their aim is not to create congressional districts but safe seats for their party. Consequently, precious few congressmen or women fear losing an election so long as they keep their base happy. During the government shutdown of 1995-96 a third of all Republican members came from districts won by Democratic president Bill Clinton; today only 7% come from districts won by Obama. This means that for most of them to keep their jobs they must appeal not to the mainstream but to the margins.

Finally, as a result, the roots of this shutdown lie far more in an internal dispute within the Republican party than they do in a battle between Democrats and Republicans. On one side are the dwindling number of moderate Republicans and those in the party establishment who see the Tea Party as an electoral liability and fear the party has been overtaken by extremists who mistake acting out for strategy and opposing everything Obama does for opposition. On the other side are the Tea Party hardliners who believe the GOP establishment has compromised too often and given away too much. Branding negotiation a weakness in itself, they are not in Congress to make legislation but to make a noise.

Since Republicans took over the House in 2011, the latter have been running the show, forcing the country from one self-imposed crisis to another with gay abandon, shameless guile and clueless zeal.

For while the economic fallout from this particular shutdown may be limited so far, the damage to America's credibility is huge and enduring. Belgium doesn't claim to be the leader of the free world, insist on its exceptionalism or have its currency (now the euro) as the world's reserve. The day before the shutdown, as the Italian government teetered towards apparent collapse the New York Times wrote: "Italian politics has a turbulent, baroque flair even when little is at stake". To the rest of the world American politics looks pretty similar. Only there's a great deal at stake.

It's not obvious how these trends can be effectively checked. It is, however, clear that until they are the American political class will look less like the elders of the shining city on the hill they claim to be and rather more like kids in a kindergarten playground waiting for an adult to intervene.

Twitter: @garyyounge