My position since October 2009 has been that the United States could not hold off deficit hawks for more than three or four years. 2013 is the deadline for that prediction to be fulfilled and we are right on schedule with the fiscal cliff and the debt ceiling showdowns.
The latest news on timing is significant because it could mean recession. As I wrote earlier today in my post on the Trillion Dollar Coin, I expect the debt ceiling fight to spark political animosity and to harden positions in Congress over other issues. And to the degree any large fiscal fights happen after the debt ceiling fight, we should expect more austerity than is commonly anticipated. [Content protected for Gold members only]