Investors hate uncertainty, and Washington's game of cat and mouse on the so-called fiscal cliff of tax hikes and spending cuts has erased hundreds of billions of dollars from the wealth of Americans.

If a deal is not reached, the consequences for the economy will be severe, wiping out as many as 5 percentage points of Gross Domestic Product in the coming year, according to some estimates. Though economists argue about the impact of the numbers - the $1.2 trillion in spending cuts would happen over 10 years - nearly all agree the combined effect would be recessionary.

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The Dow Jones Industrial Average has lost 400 points since the "cliff" talks began in earnest in mid-December. That wiped out nearly half the gains in the index for the year, which, as of mid-morning, was up 5.9 percent for 2012. It's a blow to investors and 401(k) savers who, since 2008, have seen only about 2 percentage points added to their wealth with the stock market's gyrations.

The Dow Jones Industrial average, after opening sharply higher on hopes for a deal, fell 11 points to 12,938 at 11 a.m. today, the last trading day of the year.

It's easier to gauge the "fiscal cliff" effect on the financial markets, but what's less apparent, though equally significant, is impact on non-publicly traded companies, says Sageworks CEO Brian Hamilton.

"There are 27 million private companies out there, and they're watching the cliff negotiations closely," he told ABC News today. "This uncertainty is weighing heavily on business owners. You can't throw policy at them on the last day of the year and expect them to adapt and plan for their businesses.

"They're uncertain and they should be; they need some time to prepare for what's coming at them. If it's a great policy, that's fantastic. However, any policy is better than the uncertainty they're facing right now."

Perhaps the most discouraging aspect of the "cliff" talks is that even under the rosiest scenario, any deal worked out to avoid it will do little to solve the nation's budget and debt morass, built dollar by dollar in three decades by politicians in both parties. The budget deficit has topped $1 trillion four years in a row, a shortfall higher as a percentage of GDP than any year since World War II.

Meanwhile, the national debt has ballooned to more than$16 trillion.

No deal being contemplated would even bring the budget into balance until nearly the end of the decade, nor would it envision cutting the national debt by even a dollar. Instead, the debt will continue to rise. President Obama needs authority to raise the debt ceiling or face drastic cutbacks, starting as soon as today. Treasury Secretary Tim Geithner told Congress last week that the government would hit its $16.4 trillion borrowing limit Dec. 31.

The government will be able to move money around between its accounts to stave off a crisis but only for a month or two. It's not clear then what would happen if the debt ceiling is not increased.

Bill Gross, at Pacific Investment Management Co., manager of the world's biggest bond fund, tweeted today that he expects stocks and bonds to return less than 5 percent in 2013 as high unemployment persists.

"There may be no miracle policy drugs this time around to provide the inevitable cures of prior decades," Gross wrote in his December market commentary on Pimco's website. "These structural headwinds cannot just be wished away."

Even if there's a deal, the economy is in for headwinds next year. A 2 percentage point jump in payroll taxes for Social Security will take place Jan. 1, sucking about $2,000 from a worker earning $100,000 a year. Higher taxes on the wealthy - a given in any version of a budget deal - will draw money out of the economy, cutting job creation.

Economists expect that even with a deal, GDP will rise at a 2 percent rate in 2013, not enough to make a dent in the jobless rate, which has remained near or above 8 percent since 2009.