Does it have to be this way? Not necessarily. Barack Obama or one of his Republican challengers may yet discover the courage to tell the truth<\/b> about the American economy in next year\u2019s presidential election. But given the politicians\u2019 current uselessness, the only institution with the power to avert danger is the Federal Reserve. With interest rates so low, that means more quantitative easing. Printing more money is justifiable in the circumstances, but still a tool offering diminishing returns. Fiscal help would have been much better.<\/p>\n
If America does manage to avoid recession and slowly begins to pull out of this mire, it will be testimony to its underlying strengths. It still has huge advantages over other rich countries: a younger, less-taxed population, a more innovative economy and, for now at least, the dollar as the global reserve currency. If only it had the political leaders to match, its chance of avoiding recession would be far better than one in two.<\/p>\n