The paperback edition of Lost Decades is officially released as of today.
As I noted last week, a lost of disinformation regarding the nature of recoveries from balance sheet/debt recessions has been circulated.  One is that adjustment can be accomplished by austerity and tight money. Chapter 3 of the IMF’s newly released World Economic Outlook suggests otherwise.
Figure 3-13 in particular illustrates the hazards of deflation in terms of making the public debt dynamics more challenging.
Figure 3.13 from IMF WEO, Ch. 3.
The summary notes:
…First, successful debt reduction
requires fiscal consolidation and a policy mix
that supports growth. Key elements of this policy mix
are measures that address structural weaknesses in the
economy and supportive monetary policy. Second, fiscal
consolidation must emphasize persistent, structural
reforms to public finances over temporary or short-lived
fiscal measures. In this respect, fiscal institutions can
help lock in any gains. Third, reducing public debt
takes time, especially in the context of a weak external
I would certainly agree that merely slapping on caps on spending levels, and voucherizing entitlements, is unlikely to be a credible path to debt stabilization.
The authors note the special aspects of the US debt decline in the post-WW II period. We have argued that a more expansionary monetary policy which leads to slightly higher inflation is an essential component to adjustment — not only because it will erode real public debt  , but because it will facilitate relative wage and price adjustment.
Jeffry Frieden has elaborated on the challenges we outlined in “Lost Decades” in a recent Bernard Schwartz Lecture on the global debt crisis at Johns Hopkins University School for Advanced Studies.