Photo: Flickr/Justin Ornellas
No one seems to be freaking out about the fiscal cliff: the end-of-year expiration of government programs that threatens to hack off 3 to 5 percentage points of U.S. GDP.Unless policymakers can agree on some extensions or new programs, experts fear that the fiscal cliff will send the U.S. economy right back into recession.
Politico’s Ben White points to a SIFMA survey of economists that revealed “All survey respondents opined that some attempt would be made by Congress to mitigate the ‘fiscal cliff,’ with the majority expecting a temporary extension of the Bush era tax cuts.”
Yesterday, Barclays published the results of an institutional client survey that showed the big money was not worried about the fiscal cliff. Over 80 per cent of the respondents said the fiscal cliff is “likely to create some market anxieties as the deadline approaches, but in the end will probably be resolved to avoid adverse economic impact.”
This is remarkable. It was just a year ago that U.S. policymakers mishandled the debt ceiling and lost the AAA rating for the U.S. government.
SEE ALSO: THE TRUTH ABOUT THE FISCAL CLIFF >