slashing government spending and im- ports, look good on paper but diminish long-term prospects for eco- nomic growth.
"Muddling through" will not suffice during the next phase of the debt crisis. Dornbusch warns. U.S. officials should 1) lower barriers to Latin imports; 2) get US. banks to write off some Latin debt in return for agreements South American leaders to devalue national currencies in order to promote exports. That would leave the Latin nations poorer "but with employment...