The U.S. economy could slingshot higher if politicians reach a compromise on the country's fiscal problems, Greg Fleming, Morgan Stanley Wealth Management president, told CNBC's "Squawk Box" on Wednesday.
"I believe that both sides in the final analysis want a deal and the compromise is in the revenue side for the president, and potentially higher rates, which I think he's serious on, and real entitlement reform for the Republicans," Fleming said.
Fleming doesn't believe either side wants to go over the "fiscal cliff" of automatic tax increases and spending cuts that hit at the end of the year. "They do understand that not only would that present a problem in the near term as we went over the cliff at the end of the year, but we still then have the whole debt ceiling fight that would transpire shortly into the new year," he noted.
To instill more business and consumer confidence going into 2013, both sides need to reach a compromise that involves more revenues and entitlements, Fleming said.
(Read More: What Investors Should Do If We Go Over the 'Cliff')
"There's a bit of slingshot effect," Fleming said, "and that is … if we can remove the uncertainty, I think the American economy is better positioned than many foresee."
He doesn't necessarily buy the idea that interest rates will be zero through as long as 2018, or that economic growth will be 2 percent for the foreseeable future. (Read More: Investors 'Should Get Used to 1-2% Growth': Pimco's Gross)
"I think it's been a very difficult four or five years in this economy and because of that, you hear people talk about rates will be at zero through 2018," he said. "Nobody really knows."