IHT: Davos asks if U.S. can sustain global economic recovery

IHT: Davos asks if U.S. can sustain global economic recovery: "DAVOS, Switzerland The United States is pulling a sluggish global economy forward, but imbalances threaten to derail the world�s growth engine.
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That was the conclusion of leading economists Wednesday as they addressed politicians, business leaders and their assorted hangers-on during the annual meeting of the World Economic Forum.
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As the meeting got under way in this deeply snowed-under mountain town, the state of the global economy remained one of the biggest question marks.
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There was widespread agreement that the U.S. economic outlook has brightened after several quarters of better-than-expected growth. But analysts remain divided about the sustainability of the recovery.
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��I�m bullish on the U.S. economy,�� said Jacob Frenkel, president of Merrill Lynch International. ��Because the U.S. economy is the locomotive for the world, I�m bullish on the world economy.��
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But he acknowledged that there were risks to that optimism, chiefly the imbalance between U.S. imports and exports, which has been one of the main weights pulling the dollar lower.
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Stephen Roach, chief economist at Morgan Stanley, is more pessimistic. Roach has been consistently bearish as the global economy weathered the dot-com stock collapse three years ago, followed by a recession in the United States and elsewhere and a less-than-scintillating recovery over the last year.
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By keeping interest rates unnaturally low and greatly increasing fiscal spending, he said, U.S. policymakers have fueled the creation of a series of bubbles in asset markets. A new one might be forming now in technology stocks, he added.
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By opening the fiscal and monetary taps, Washington policymakers have also inflated the current account deficit, the broadest measure"