In previous blogs, we have discussed how the three credit rating agencies have hinted that the United States needs to get its debt under control (see these blogs on Moody's, U.S.

Here are the highlights from this weekend’s editorials on fiscal and budget policy:

The Wall Street Journal criticized plans by Democrats to introduce new health cost control measures in response to a report that said the recently passed health care legislation would increase premiums.

Airline traffic may not be the only thing slowed by Iceland’s volcanic eruptions. The slow-moving, fragile economic recovery may take a hit as well. While a just-released report from the International Monetary Fund predicts stronger worldwide growth than previously predicted, the projections were made before the volcano erupted.

The big question now is: Did the volcano blowing its stack cause enough damage to cool optimism about a recovery?

With global recovery underway but still fragile, reducing government (sovereign) debt risk is important, so that global economic recovery can be sustained. The IMF elaborates on this fiscal theme in its stage-setting documents released on the eve of the spring meetings of the Fund and World Bank:

- The policy agenda for countries should include, the IMF says,

According to the IMF, we are entering a new phase of the economic and financial crisis: the world has averted a depression, a recovery is taking hold (multispeed, depending on the country), and the recovery looks stronger than it had expected in the fall.

US growth this year is expected to be 3.1% (about half a percentage higher); and 2.6% next year (slightly higher). The Fund attributes the US recovery to fiscal stimulus, and notes that private demand remains weak.

Japan is considering legislation to impose deficit-targets, according to an article in The Wall Street Journal.  With their debt nearing 200% of GDP and concerns that they may follow countries like Greece in having a fiscal crisis, lawmakers have been proposed a number of possible ways to show the bond-market they are serious about getting their debt under control. 

U.S. Treasury markets were relatively quiet most of this week, although some Friday morning news had translated into market gains, as of early afternoon. (Most notably mentioned, the SEC indictment of Goldman Sachs moved investors from stocks to bonds and lower consumer confidence in early April suggested a weak recovery in the near term.)

Commentators generally reported that demand was bolstered by safe haven effects related to continuing uncertainties with Greece’s sovereign debt challenges and possible concerns about other high debt Eurozone members. 

In order to help address its debt crisis, the country of Greece has set up a "solidarity account" to which people can donate money to help pay down the debt.

Here are the highlights from this weekend’s editorials on fiscal and budget policy:

The Wall Street Journal noted the lessons that the United States could learn from Greece and their debt crisis.  They noted how the US's debt held by the public was projected to reach 90% in ten years, close to the 113% level Greece is at now.  According to them, "Greece's predicament...is signaling loud and clear that the spend-and-tax economic model has hit the wall."

For budget and market watchers, the month of March has been a little scary. It is not easy to come out of the deepest recession and financial crisis since the 1930s, particularly when the fiscal outlook and prospects for its successful management are so uncertain.

Sovereign risk jitters are on the rise as markets are being asked to digest massive amounts of government debt, at the same time the supply of private sector debt going to market is increasing and investors' appetite for risk is returning. The changes underway are complex and shifts could well be sudden.