Why the US will lead global growth next year

US

The US fiscal cliff looms large, casting a shadow over the macroeconomic outlook for next year.

At midnight on 31 December – just a few weeks away – the Budget Control Act 2011 is due to take effect, leading to higher taxes and a genuine bloodbath in public spending. Many in the markets are worried that the policymakers on Capitol Hill are gathering on the brink of the precipice like a horde of lemmings preparing to throw themselves off. But those are the lemmings of myth. Contrary to received wisdom, lemmings do not commit suicide. In fact, as the Alaska Department of Fish & Game notes with approval: “Perhaps one of the most fascinating aspects of the lemming is its capability for...