"Markets go up and down," said White House Press Secretary Jay Carney. "The president believes that the economy will continue to grow, that the economy will continue to create jobs and that we need to do everything we can to enhance that growth and enhance that job creation."
But with federal spending slated for a cut of at least $2.1 trillion over the next decade as part of the debt ceiling deal, additional stimulus spending from Washington is unlikely.
More bad economic news, which could come as soon as Friday morning with the report on July unemployment, would change that dynamic, said Mark Zandi, chief economist at Moody's Analytics.
"If it looks like we're going back into a recession or the deflation threat revives, then I think the tenor and the nature of the debate will change quite rapidly," he said. Zandi put the chances of a double-dip recession at 25%, but "rising each day as confidence fades."
Congress could move to extend the one-year payroll tax break, set to expire in December, and extend unemployment benefits, Zandi said. But those moves simply would maintain the status quo, not provide any additional stimulus.
Bolder steps are difficult with the huge U.S. budget deficit, Reinhart said.
Similar constraints exist in Europe.
"In terms of a way out for the Euro zone, it looks very, very tricky, because none of these countries — particularly Italy — have any strategy for growth and competitiveness," said Mats Persson, director of Open Europe, a European think tank.
European blue-chip stocks fell to a two-year low Thursday. Key indexes in the European Union have fallen between 8% and 11% this week.
"Investors are getting out of stocks massively, period. And it might take a while before they come back," Jean-Yves Dumont of Dexia Asset Management told French journalists.
As in 2008, he said, "We're facing the risk of another confidence crisis."
Times staff writers Nathaniel Popper in New York, Kim Willsher in Paris and Janet Stobart in London contributed to this report.