Before we get too giddy about any U.S. economic "recovery," we should remember that the preceding collapse was global. No recovery can succeed unless it, too, is global. Will that happen? The world can no longer rely for growth on free-spending Americans, who are overburdened by debt and sobered by trillions of dollars of losses on homes and stocks. Without a substitute for American buying, any global revival will be feeble, because the U.S. needs export-led growth and other countries must somehow offset their lost sales to the United States.

Developing countries would seem to be the obvious replacement for American spending as the world's economic motor. These countries already account for nearly half of global economic output, estimates the International Monetary Fund, with China (11.4 percent), India (4.8 percent), and Brazil (2.9 percent) together representing nearly a fifth. By comparison, the United States is also a fifth.

All these societies have huge needs for housing, consumer goods, and health care. Except as a job creator, export-led growth doesn't make much sense. Logically, these countries should produce more for local markets and less for export. Stronger domestic spending would also increase their demand for imports. As a result, the United States would export more and import less. What economists call "global imbalances"—big U.S. trade deficits matched by big surpluses in China and elsewhere—would shrink. World economic growth would revive. Problem solved.

Just possibly, this transformation is starting. Reacting to America's shellshocked consumers, other countries have stimulated their economies, most conspicuously China. Government spending increased; credit eased. China expanded at an impressive 7.9 percent rate in the second quarter. As for India, the IMF reckons it will grow 5.4 percent this year and 6.5 percent next. Brazil's prospects are good, judges Norman Gall, an American who heads the Fernand Braudel Institute in São Paulo. The country has a "strong industrial base and energetic and creative entrepreneurs"; government debt has dropped from 85 percent of gross domestic product (GDP) in 2002 to 65 percent now.

Sounds reassuring. Still, there's room for skepticism. If Americans are spending less and saving more, then a balanced global economy requires people elsewhere to spend more and save less. That's the permanent fix, not repeated bursts of temporary economic "stimulus." The large trade imbalances fundamentally stemmed from high savings rates, especially in Asia, that dampened domestic spending and encouraged export-led growth. In 2008, China's saving rate was an astounding 54 percent of GDP, Hong Kong's 35 percent, and Taiwan's 28 percent, reports economist Eswar Prasad of Cornell University. The U.S. saving rate, including households and corporations, was 12 percent of GDP.

In theory, these vast savings could be absorbed by equal amounts of investment spending—on factories, machinery—but for most Asian countries (an exception: India), there was an investment shortfall. The surplus savings were then invested abroad, exchange rates were artificially depressed, and exports substituted for domestic demand.