- Scenario 1, “Cliff-hanger”: A last-minute deal is struck that preserves many, but not all, of the mandatory cuts and tax increases, leading to anemic 2013 growth, but no recession.
- Scenario 2, “Temporary step back”: Washington decides to delay the pain by continuing most tax breaks and not reducing spending in 2013, pushing the fiscal problems into the future.
- Scenario 3, “Free- falling”: With no agreement between feuding political parties, the US falls off the fiscal cliff, leading to a government shutdown, widespread uncertainty and a likely recession.
UBS Global Asset Management: Ramifications Of The Potential US ‘Fiscal Cliff’ Dominate Cyclical Market Forum
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