A shadow or actual International Monetary Fund program would vastly enhance the credibility of a policy of fiscal retrenchment and structural reforms.

This, by contrast, implies a need for retrenchment.

They would help to ensure that, even in an era of retrenchment in American foreign policy, the world would continue to enjoy the most important benefits of the expansive foreign policy that the US can no longer afford.

Five years of economic retrenchment have deeply scarred the Palestinian economy.

The appropriate timing of fiscal retrenchment is, in fact, difficult to decide.

So the budget deficit will persist, and more retrenchment will be required.

American consumers unprecedented retrenchment has turned the US economy s growth calculus inside out.

For starters, banks current retrenchment of long term investment financing is likely to persist.

But when the economy is booming, the effects of fiscal retrenchment are unlikely to be damaging.

The reasoning seems to be that growth requires market confidence, which in turn requires fiscal retrenchment.

To dampen the additional inflationary pressures implied by a weaker rupee, more aggressive fiscal retrenchment is needed.

After five years of decline in living standards, voters oppose more austerity and further retrenchment without growth.

Thus, the state s coffers (and hence spending) overflow during booms, but then collapse, forcing emergency retrenchment, during busts.

To be sure, retrenchment could entail some short term costs but the longer term benefits would be much bigger.

Economic growth plummeted from 13 in 1936 to 6 in 1937, and GDP shrank 4.5 in 1938, while unemployment rose from 14 to roughly 20 . Although fiscal policy was not the only cause of the double dip, ill timed retrenchment certainly contributed to it.

With retrenchment and balance sheet repair only in its early stages, the zombie like behavior of American consumers should persist.

Until the Reinhart Rogoff paper, the main argument for fiscal retrenchment rested on concerns about the sustainability of public debt.

But when there is spare capacity in the economy, the resources freed up by public sector retrenchment may simply be wasted.

After a period of massive expansion during which the financial services sector nearly doubled in size, some retrenchment is natural and normal.

Given synchronized fiscal retrenchment in most advanced economies, another year of mediocre growth could give way to outright contraction in some countries.

Thus, Europe s failure to recover immediately has been due to a lack of austerity, even though public sector retrenchment has been unprecedented.

They will warn that other EU countries like Portugal will refuse to undertake more reform, retrenchment, and repayment unless they receive similar largesse.

Indeed, all Western governments, with the exception of the Obama administration, are committed to retrenchment and Obama cannot get a new stimulus package through Congress.

From this perspective, the crisis countries would not be spared painful retrenchment as long as they remained in a monetary union that includes competitive countries.

At the same time, financial markets are forcing fiscal retrenchment on governments, as will the planned new fiscal treaty (on which Germany, among others, insisted).

The sharp fiscal retrenchment that has now started throughout southern Europe should contribute further to a sharp deceleration, if not outright fall, in domestic demand there.

Instead, what the coalition seems to be proposing is a sort of correction, a retrenchment from various excesses and dysfunctions to something more restrained and disciplined.

If Germany wants the rest of Europe to swallow the bitter pill of fiscal retrenchment, it will eventually have to recognize the implicit quid pro quo.

A one dollar spending cut was believed to reduce GDP by more than one dollar, so that fiscal retrenchment was economically costly (while, conversely, stimulus was effective).

Having overstretched its forces in Afghanistan and Iraq, and facing economic retrenchment at home, the US is withdrawing, and there is no other power to take its place.

The traditional remedy for countries caught in the kind of crisis that Spain, Greece, Portugal, and Ireland find themselves in is to combine fiscal retrenchment with currency depreciation.

If repeated, this pattern may erode confidence in financial markets and regulators, which could well lead to heavy handed regulation, the expansion of the state, and retrenchment from globalization.

So, in mid March, Cyprus was heading for a precipitous retrenchment of its banking system, resulting in the loss of a very large part of the country s financial wealth.

During this period, there was rapid expansion among small and medium sized firms and a gradual retrenchment among the large firms which had hitherto characterised the region's industrial base.

On the supply side, permanently lower output makes fiscal adjustment even more compulsory but, on the demand side, a weak private economy lacks the resilience needed to weather fiscal retrenchment.

Although its pledge last August to purchase unlimited quantities of short term government debt has calmed markets, activation of the ECB s outright monetary transactions program is conditional on continued fiscal retrenchment.

The reasoning seems to be that growth requires market confidence, which in turn requires fiscal retrenchment. As Angela Merkel puts it, growth can t come at the price of high state budget deficits.

PARIS The dispute that has emerged in the United States and Europe between proponents of further government stimulus and advocates of fiscal retrenchment feels very much like a debate about economic history.

Most would suggest that a period of financial retrenchment and slow GDP growth poses a serious threat to the legitimacy of the Chinese Communist Party (CCP), which is based on economic performance.

Call them fiscal policy, credit policy, monetary policy, and inflation.

An Israel and Palestine that could resolve their differences and live side by side as democracies would become an island of stability and sanity in a sea of political disorder and economic retrenchment.

In fact, many other rapidly growing emerging economies have suffered and worse than China from the drop in global demand resulting from ongoing retrenchment in high income economies since the 2008 financial crisis.

After a decade of reforms and retrenchment under President Fernando Henrique Cardoso in the 1990 s, and a decade of policies favoring social inclusion under Lula, Brazil needs a decade of economic growth.

True, fiscal retrenchment in Germany is more cautious than official rhetoric suggests. But, overall, the eurozone and Great Britain have clearly shifted towards austerity, which the US is still very reluctant to consider.

But when the economy is booming, the effects of fiscal retrenchment are unlikely to be damaging. So it was right to start planning for a change of gear when the recovery started to materialize.