Last month, the chattering classes were fretting about the 'fiscal cliff', which the United States would supposedly go over if Congress could not agree on a budget deal. Jim Flaherty, Canada's finance minister, even got into the act, claiming that we too could go into recession if the issue was not settled — which it eventually was, temporarily at least.
Now U.S. politicians are manufacturing another crisis as they try to agree on deficit reduction. This time the issue is 'sequestration' — $1.2 trillion in across-the-board budget cuts to take effect over the next 10 years, beginning March 1, barring an agreement between the president and Congress. As the date approaches, every day brings new warnings of dire consequences.