This doesn't necessarily mean it will call publicly for the Treasury to abandon its plan to tighten fiscal policy this year.
They were too reluctant to raise public borrowing and cut interest rates in the early 1990s, after Japan's financial bubble burst, and then much too quick to tighten fiscal policy again last year.Viewed from the supply-side, the answer is the same.
The deal also threatens to tighten fiscal policy further in 2012, when the recovery is still struggling to establish itself.It marks, too, another deeply worrying change.
Catalonia was also among the regions instructed this week by the Spanish finance minister, Elena Salgado, to tighten fiscal discipline after failing to meet its 2010 budget deficit target.
One consequence is that if Italy misses its target of a balanced budget next year, it is unlikely to be forced to tighten fiscal policy again — something that would risk sucking Italy into a Greek-style austerity spiral.
It gave warning this week of a "hard landing" if the government does not tighten fiscal policy again.
Indeed, the temptation over the next year, on both sides of the Atlantic, will be to loosen, not tighten, fiscal policy.
"It is appropriate that today's audit of the Manhattan district attorney's office includes recommendations to establish transparency, tighten fiscal controls and register all accounts — all of which will help ensure that funds are managed in the best interests of the city and the administration of justice," Mr. Bloomberg said.
Another solution is to tighten fiscal policy.
They used the crisis to tighten fiscal policy.
You should tighten fiscal policy in the boom years, not the slump ones.
