Jim Flaherty, Canada’s Finance Minister, is reported as having said yesterday that if the America hits the so-called fiscal cliff on December 31 Canada will follow the U.S. into recession.
I believe that out of necessity U.S. politicians reluctantly will cooperate before, and perhaps even after December 31 (retroactive changes to scheduled deficit reductions and tax changes could always be made after December 31) to forestall U.S. fiscal cliff issues. However, consider that U.S. Federal deficit and debt ceiling (a separate issue from the ‘fiscal cliff’) eventually have to be dealt with.
