With these factors in mind, Bovino puts the chance of a recession at 20%.

FORBES: Connect

Bovino forecasts that GDP will expand 2.1% in 2012, 2.4% in 2013, and 3.4% in 2014.

FORBES: Connect

While Bovino avoids speaking of the stock market, one could expect a dramatic decline in U.S. stock prices.

FORBES: Double-Dip Recession 20% To 25% Likely If Fiscal Cliff Hits, S&P Warns

At the same time, the deep distrust between Republicans and Democrats could cause both the Bush tax cuts and the payroll tax cuts to expire, Bovino notes.

FORBES: Double-Dip Recession 20% To 25% Likely If Fiscal Cliff Hits, S&P Warns

The good news here is that Bovino has lowered her recession possibility forecast from a peak of 40% from last fall, when recession fears soared amid a raft of negative events.

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The recovery would be weak and arduous, Bovino noted.

FORBES: Double-Dip Recession 20% To 25% Likely If Fiscal Cliff Hits, S&P Warns

With the shadow inventory down 14.8% in the year to April to 1.5 million (four months supply), residential real estate markets are no longer dragging on growth, but for the first time since 2005 will actually add to output expansion, Bovino explained.

FORBES: Double-Dip Recession 20% To 25% Likely If Fiscal Cliff Hits, S&P Warns