All month I have been speaking about the $600 billion fiscal cliff that our government is facing as it heads into the New Year. Following up today, let me fill you in on how businesses and consumers are reacting differently to this serious issue.What’s interesting is that while businesses and their CEOs fret about higher taxes and lower government spending as a double whammy, consumers are not all that worried and surprisingly, consumer confidence is at its highest since the recession in 2008. This is an odd sort of dichotomy between businesses and the people they employ i.e. consumers. So while economists were earlier focused on businesses to drive our economy out of its slump, they’re now looking to consumers to play a more important role in turning around the economy.In fact on Wednesday, November 14th, business executives met President Obama to voice their concerns while launching a blizzard of advertisements announcing contingency plans – subtly hinting at future layoffs. And while Wall Street overwhelmingly supported Mitt Romney, now that the election is over, they are rushing to make amends with the new chief – this strengthens the President’s hand potentially forcing the Republicans to strike a decent bargain or risk looking like the bad guys.Wall Street’s new take, as expressed by Goldman Sachs CEO Lloyd Blankfein, is a willingness to support tax increases provided they’re also accompanied by strong enough cuts in government spending. In fact, as I see it, Wall Street and American businesses are doing all they can to soften up both sides of the aisle by talking up points that matter most to each half… warning the Democrats of a weaker government while alarming the Republicans with talk of a weaker business environment.And… interestingly… through all of this, consumers have been largely unfazed and even a little perplexed at all the press this issue is receiving… perhaps confident and comfortable that with Obama as President things might just be settled in a manner where the government does all it can to protect ordinary citizens-a sentiment they likely would not have had, had Romney won the election. Also, recent polls show that most consumers really do not know a whole lot about the fiscal cliff and suggest that this ignorance perhaps underlies their sunny disposition.Two surveys out this month, the Gallup poll and the University of Michigan survey show consumer confidence at its highest since the recession in 2008. I think that’s because consumers believe that our economy is finally turning around with more jobs being created, far fewer layoffs, a stable housing market, rising home prices in many regions and even lower gasoline prices. And recent reports of weakness in consumer spending have been written away as being tied more to storms and the lack of power and gasoline in the northeast than to waning consumer confidence.Now let me go into just a few specifics. Chances are, lawmakers will let payroll tax cuts expire, which would mean that the average worker will take home $1,000 less next year or about $80 per month… this adds up to a $100 billion shift from your pocket to the governments’. This payroll tax increase impacts everyone, not just the rich. It also appears that lawmakers will not renew extended unemployment benefits, subtracting another $40 billion from the unemployed to the government.So while the payroll tax and unemployment benefits’ extension issues will hurt many people and dampen our economic recovery in the first half of 2013, they’re unlikely to wreck the economy too much. So, for the first half of 2013, most economists do not see break-out growth because of the fiscal issue and lagging growth in Europe.For my listeners, every day the fiscal cliff issue remains unresolved is one more day of uncertainty that will dog the markets. Therefore, anticipate increased volatility over the coming month-and-a-half with a strong likelihood of a rally should a reasonable compromise be reached and an equally likelihood of a drop should the compromise not have sufficient teeth to reign-in our deficit and debt. Any dips caused by worry, could throw up enticing investment opportunities. Perhaps now is a good time to identify your favorite stock picks and watch the markets over the coming 45 days to hunt down bargains.