Economy Set For Marginal Improvement In 2013
American economy could see rebound in 2013, but much will depend on what Washington does and does not do. As the year draws to a close, consumber and business confidence has waned and businesses are holding off on capital investments in anticipation of higher tax rates and the destructive side effects of government cutbacks.
“Given that capital expenditures have been weak recently, some economists believe businesses will start spending more if Congress ends or at least delays the risk of severe fiscal tightening,” reports The New York Times.
While many financial forecasters see improvement in 2013, there is a blief that any growth will be far short of robust.
“The economy is far from fully healed. The combined net worth of American households remains 12 percent below its pre-recession peak, after adjusting for inflation. Incomes, too, have yet to fully recover. And most significantly, U.S. businesses still employ 3.3 million fewer workers than before the financial crisis, a gap the economy won’t fill next year under even the rosiest of plausible job-growth scenarios,” cautions the Wall Street Journal.
Global Efforts To Battle Corruption Heat Up
The next year could be a watershed moment for global efforts to combat corruption, according to The Economist citing progress being made by the G20 and other international organizations.
“A working group set up in 2010 by the G20 (the world’s largest economies) has done more than many observers expected, particularly in drawing up rules on seizure of corrupt assets and denial of visas to corrupt officials. Unlike the United Nations Convention Against Corruption, the G20 is not so far split between keen sleazebusters and countries like Russia and China. Another body, the Paris-based Financial Action Task Force, will start a fourth round of monitoring member states next year, chiefly for effectiveness in implementing anti-money-laundering laws.
Fiscal Cliff Not Only Worry For Business Community
If and when Congress and the White House reach an agreement on the fiscal cliff, another confrontation looms – raising the debt ceiling. Mark Zandi of Moddy’s Analytics warns of the potential damage another drawn-out fight would have on the economy.
“Simply scaling back the cliff and extending the political brinksmanship over the debt ceiling would doom the economy to at best continued slow growth and possibly another recession if policymakers take it down to the wire as they did in summer 2011,” he told The Hill.
Geithner To Replace Ben Bernanke At Fed?
As President Obama gets set for a second term, the deck chairs are being rearranged with the latest buzz about Timothy Geithner replacing Ben Bernanke as chairman of the Federal Reserve.