The president believes, and even the Fed chairman believes. I'm not talking about Santa Claus or the San Diego State Aztecs -- or even the supposed Mayan doomsday prediction. I'm talking about the U.S. economy, which looks ready to move to a higher level if only certain things fall into place. 2013 is setting up to be a banner year, and the stock market has sniffed it out.
Following the 2008-to-2009 financial crisis, the economy has had difficulty moving on quickly; the crisis, after all, created a deep fiscal hole and carried a real threat of a longer-lasting recession. Yes, the Fed and even politicians have tried to get the economy on sound footing, but the 2009 passage of $700 billion in growth initiatives fell far short of anything useful -- and any future package will be scrutinized for its efficacy, given the current unacceptable growth rate vs. the plunge that had come just prior.
That said, the Fed's monetary stimulus has provided a fertile ground for growth, and it will likely continue for years to come. Many have disagreed with the methodology of stimulus, but that is ultimately of no consequence.
Today, we have an economy that seems to be limping along but ready to fire. How so? Well, industrial production is improving, inflation is low and the job situation seems continue getting better. The consumer is spending and the housing market is enjoying a renaissance. These are all the major indicators of economic growth.
Overseas, China is reengaged in its growth plans -- action that will only help stabilize the global economy. Last week the World Bank estimated mid-8% growth in China next year. It appears Europe is likewise out of the danger zone, and will perhaps even contribute some growth in the second half of 2013. Other economies around the world are likely to contribute, as well.
As for impediments to a better environment next year, they're quite obvious -- and, in a nutshell, they are the psychological effects from the U.S. "fiscal cliff." This crisis has gone on far too long, and it may become a thorn in the side of the economy. Recessions are created through fear and constant reminders that things will worsen. Consumers and corporations will step back -- and any natural disasters, wars or attacks will also hamper a better recovery.
While we can't prepare for things like this, we can believe in a better 2013. After all, we got past the Mayan calendar.