Pimco’s El-Erian: Chances of US Recession Surge as Fiscal Cliff Talks Stall

“A decision by House Republicans to cancel a vote on House Speaker John Boehner’s fiscal-cliff proposal increases the chances the U.S. economy will plunge into a recession next year, said Mohamed El-Erian, CEO of fund giant Pimco.

The rebellion against Boehner among his fellow Republicans stalls a deal with the White House to craft a 2013 fiscal framework and avoid what many see as a preventable recession.

Sweeping tax hikes are due to take effect at the end of this year at the same time deep cuts to government spending kick in, a combination known as a fiscal cliff that could tip the country into recession next year, according to both government and private-sector estimates…”

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