Getting economists to agree on almost anything is tough. But on the subject of the fiscal cliff, a survey by CNNMoney found an almost unanimous consensus.
Of 17 top economists surveyed, 14 believe the end of tax breaks and the steep federal spending cuts set to take effect at the start of next year would cause the economy to tumble into a new recession.
Twelve of them believe the fiscal cliff is the most serious risk facing the economy, more serious than the European sovereign debt crisis, business uncertainty about various government regulations or the continued weakness in the job and housing markets.
“Should gridlock prevail, business sector investment and hiring will be stymied, and the household sector will sharply curtail spending,” said Patrick O’Keefe, director of economic research for accounting firm JH Cohn.
But all 17 agree on one thing — the economy won’t plunge over the fiscal cliff.
Despite partisan bickering ahead of the election, all the economists said they believe Democrats and Republicans will come together to extend the tax breaks and prevent the spending cuts either during the lame duck session of Congress or early in the new year.
Via – CNNMoney