American Austerity May Have Begun to Bite in March

UNTIL RECENTLY America's squabbling politicians have mostly resolved their fiscal differences by delaying them. That tactic came to a head at the end of last year, at which time a host of tax rises and spending cuts were scheduled to drop. Despite wide fears that such budget changes would derail a shaky recovery, Congress mostly opted to let the hits fall. Marginal income tax rates on top earners went up at the first of this year, andâ??more importantlyâ??a reduction in the payroll tax rate adopted for stimulative purposes was allowed to expire. Other automatic cuts were delayed by a few months, but they too were allowed to take effect in March.