2012 may be the austerity election

For years, American politicians – and voters – have approached the growing debt crisis and its impact with detachment and as a problem beyond the horizon. Just as there is plenty of blame to assign, austerity (read sacrifice) will have to be shared as well. Whether the proverbial can is kicked down the road, or passed around to collect contributions may be determined in the upcoming election.”

“A stimulus package consisting of a payroll-tax cut, investment tax credit and enhanced unemployment insurance expires then, as do George W. Bush’s tax cuts (which have already been extended by two years from their original end-date of 2010). At the same time an automatic, across-the-board cut in domestic and defence spending, called a “sequester”, takes effect, cutting about $100 billion from government spending next year,” notes The Economist.

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