The world recession

For four long years, a recession rolled across the world. Now, at last, it's over.

The United States was the first to go into it and first, in the spring of 1991, to begin to pull out of it -- although slowly and haltingly at the beginning. Then the rest of the English- speaking world followed -- Britain, Canada, Australia and New Zealand. In Europe the recovery began only last year -- again, weakly until recently. Finally, a solid recovery is now under way in Japan.

Each of the rich countries has its own particular responsibilities to meet in keeping this recovery going. The United States' task is to keep working on its budget deficits and its inflation rate.

Those familiar admonitions come this week from the Organization for Economic Cooperation and Development, which acts as a sort of international council of economic advisers for the industrial democracies.

Here in this country, the economy's growth rate probably peaked in the past year, with the Federal Reserve Board now hard at work to slow it to a safer and more sustainable speed.

Meanwhile, for the next couple of years, growth rates in Europe and especially Japan are likely to keep rising -- which among other things means expanding markets for American goods. The huge American trade deficit will keep rising next year, the OECD forecasts, but will then level off as foreign demand strengthens for American exports.

As Americans struggle with their budget deficits, they quarrel over whether entitlements -- meaning Social Security and other benefits -- are too great a burden. The OECD observes that the United States is only in the middle of the range among the rich countries. Entitlements are much more generous in Western Europe, and one result is that budget deficits there tend to be even higher than here.

Deficits are financed out of savings, and because Europeans save much more than Americans do, they can handle big deficits with less strain. But the anguished debates over deficits and entitlements now go on throughout the industrial world.

The economic success of all these countries and their governments depends heavily on what's going on elsewhere in the world. It's a system that puts a high premium on cooperation.

The subject makes many politicians uneasy, since it rightly implies that no country really controls its own economic destiny.

Whether the American economy is performing well or badly during the next presidential election campaign probably depends as much on decisions to be made in Tokyo, Frankfurt and London as here in Washington.

-- The Washington Post