Japan’s lost decade: still a risk for U.S. conomy
On Monday September 19, 2011, 10:59 am
By Steven C. Johnson
NEW YORK (Reuters) – As the U.S. conomy slouches toward another recession and confidence in policymakers erodes, investors are coming to grips with the notion that the country may already be several years into a Japan-style lost decade.
If so, the years ahead could be a very tough slog. U.S. households, unlike those in Japan, have higher debts and lower savings, while massive deficits have sapped political support for the type of robust government spending Japan relied upon.
In short: in a prolonged period of anemic growth, the U.S. conomy may have a slimmer margin for error.
“I’m more convinced we are headed in that direction,” said Scott Mather, portfolio manager at PIMCO, the world’s largest bond fund with $1.2 trillion in assets under management. “We might have an even harder time than Japan did.”