What kind of recovery can there be in the United States given the debt crisis?
It will not be “quite as dire an outcome as Japan has seen over the last decade and a half,” Dr. Resler said. In both the U.S. and Europe, quantitative easing has been employed to good effect, whereas Japan’s use of that tool “has been marginal at best.” As Americans deleverage, he added, we won’t see the early surge in consumer spending that typically happens after a deep recession. Thus the U.S. recovery will have to rely to an unusual extent on exports and capital spending. The good news here is the strength of demand in China and other non-Japan Asian countries, which will lift American exports. Ms. Jansen noted, “The largest share of the U.S. corporate market is sitting on absolute mountains of cash.” Companies’ expectations for their own growth are restrained. Given these factors, even a slight rise in demand will trigger the deployment of some of this cash, for example on technology, where spending has been low relative to GDP. In both Japan and the U.S., companies have cut jobs
