2. Can Congress dive off the cliff?
If Congress goes on autopilot, some analysts have noted flippantly, Americaâ€™s debt and deficit problems will largely fix themselves.
While Americaâ€™s annual budget deficit would be nearly cut in half, the impact on the American economy would be severe.
The CBO estimates that such a course would slash annual growth of the gross-domestic product (GDP) to a measly 0.5 percent. During the first half of 2013, the US economy would likely decline by 1.3 percent, according to the CBO. Once the economy starts tanking â€“ potentially taking consumer confidence and the stock market with it â€“ the rebound the CBO sees in the second half of the year could never come to pass.
By contrast, if Congress simply delays again â€“ putting off the entire package for another year, say, the economy would grow by a robust 4.4 percent in 2013.
Thatâ€™s roughly the difference between growing nearly as fast as India on the high end versus tipping back into a European-style near-recession on the low end.
So Congress could do a full fiscal belly flop. But it would be harrowing short-term experience.