As I have been predicting since the beginning of the year, I believe the Republicans will be able to force through some form of austerity before the budget battles in Washington are over this quarter. As the year began, we saw the fiscal cliff showdown end in a Republican defeat with taxes being raised. WHile the payroll tax hike was the biggest drag on growth, these tax increases were not likely enough in total to throw the US into recession.
Afterwards, the timetable for the debt ceiling made it the most pressing issue. That was three weeks ago. My sense at the time was that the Republicans, having raised taxes, would be hard pressed to stick to the ideological views of their base of supporters and cut spending in one of the next rounds of fiscal negotiation in this quarter. The Republi...
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Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He has also been a regular economic and financial commentator in print and on television for the past decade. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.