For all the euphoria at the turn of the year about Japan's latest efforts at stimulating the economy out of its 20-year blues, investors' combined wishful thinking is having a hard time making it so. Japan's struggles offer a salutary lesson for markets everywhere.

During much of the past two decades, Western economists have argued that Japan's post-bubble economic problems would be solved if only the country did more--more monetary and fiscal stimulus--and more aggressively. If only policymakers didn't hold back, the economy would have returned to a sound footing long ago.