Amid increasingly turbulent credit markets and ever-weaker reports on the U.S. economy, the Federal Reserve has been unusually swift and determined in its lowering of the overnight lending rate. The White House and Congress have moved quickly as well, approving rebates for families and tax breaks for businesses. And more monetary easing from the Fed could well be on the way.

The central question for America's economy is this: Will this medicine work? The same question was asked repeatedly in Japan during its "lost decade" of the 1990s. Unfortunately, as was the case in Japan, the answer may be no.

Like their counterparts in Japan in the 1990s, American authorities may be deluding themselves into believing they can forestall the endgame of post-bubble adjustments. Government aid is being aimed, mistakenly, at maintaining unsustainably high rates of personal consumption. Yet that's precisely what got the United States into this mess in the first place - pushing down the savings rate, fostering a huge trade deficit and stretching consumers to take on an untenable amount of debt.

A more effective strategy would be to try to tilt the economy away from consumption and toward exports and long-needed investments in infrastructure.

The central question for the economy is this: Will the medicine work?

If the American economy were entering a standard cyclical downturn, there would be good reason to believe that a timely countercyclical stimulus like that devised by Washington would be effective. But this is not a standard cyclical downturn. It is a post-bubble recession.

American authorities may be deluding themselves into believing they can forestall the endgame of post-bubble adjustments. A more effective strategy would be to try to tilt the economy away from consumption and toward exports and long-needed investments in infrastructure.

American authorities harbor the mistaken belief that swift action can forestall a collapse. The greater imperative is to avoid toxic asset bubbles in the first place. Steeped in denial and engulfed by election-year myopia, Washington remains oblivious of the dangers ahead.

(This article was published at NYT as Double Bubble Trouble.)