The Hemisphere: Fiscal Sense

U.S. support for the idea of an inter-American development bank caused hopeful smiles to blossom in every Latin American capital last week. Even more hopeful were signs in some" of the hemisphere's key countries that free-handed spending might be replaced with tight budgeting, that careless deficits would give way to more careful planning. The results promised to solve many of the new bank's problems before they become problems—and even before there is a bank.

Brazil. When tough-minded new Finance Minister Lucas Lopes took charge eight weeks ago, he found that his predecessor had run...