We've taken the most likely road out of the financial crisis of 2008: avoiding Armageddon and getting stuck instead in an economic bog, which is neither horrific nor good. Krugman talks about a Third Depression, by which he means an overall slump of more than a decade. What we are seeing right now looks to be an all-too-predictable long-term period of low economic growth following a financial crisis, but regardless of its predictability from 2008, here is where we are three years later. This was not inevitable by any means, but Obama shot low on the stimulus and especially screwed up with his (non-) appointments to the Fed, and much of the political world on both sides of the North Atlantic is just bonkers and repeating a good part of the range of macroeconomic mistakes from the Great Depression. As an historian, I should note that this is par for the course (the missteps and bonkers bits). But we face this slump as a country that is wealthier than almost any other country in similar circumstances and with a fairly well-developed public sector (if lumpy in both size and performance). On the other hand, we have an aging population and an extraordinarily dysfunctional public debate over the most rapidly-expanding cost of aging (health care).
But we are not alone. Today, several European countries such as England (yes, it's part of Europe!) have the historically-relative wealth if not the health-care dysfunction, and that comparison is likely to dominate vapid punditry when the vapid punditry deigns to look outside our borders. (I am convinced that the bloated reputations of Thomas Friedman and David Brooks are in large part because they are less insular than George Will and other columnists with lifetime tenure.) But another country has gone before us in being a very wealthy, aging nation heading into years of subpar economic growth: Japan in the years after 1990.
On the one hand, the recent macroeconomic history of Japan is sobering: years of too little, too late. On the other hand, life expectancy in Japan did not drop the way it did in post-Soviet Russia, there has not been extraordinary crime, and more generally there doesn't appear to have been a collapse in civilization. So maybe we need another spate of "what did Japan do?" hype stories. Well, let's skip the hype but maybe keep the comparative focus…