As the New Year begins, there are four events that are creating significant headwinds for the US economy. There has been a lot of talk about the fiscal cliff in the press but behind this is the debate over the US debt ceiling, which will be breached by 31 December. In addition, there are two strikes that threaten to hurt the American economic infrastructure or raise prices to consumers.
Overall I am more positive about the US economy’s ability to continue to sustain this multi-year recovery on purely economic grounds than I was at the beginning of 2012. However politically the situation is dire, much worse than it was in 2012.
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