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What will new year hold?

December 31, 2012
The Journal

This is usually the time of year when people reflect on the past year, smile about the successes and take note of the failures, and look ahead to a new year with hope for a better future.

This year, however, Americans are looking ahead to a year that could start with a tumble into a new recession, due to the major failure of past year. Congress and the White House have (so far)?failed to come up with a debt reduction plan that would stave off the automatic tax increases and draconian federal spending cuts. They had a chance to set the country on a more sensible course, but stubborn partisanship has held up any possible action.

Congress has today left to come up with a plan all can agree on, and get it passed.

Observers and analysts agree that if a last minute deal is even possible, it will likely fall far short of the kind of legislation either side had been looking for. There may be some middle-class tax break extensions, and a few timid budget cutting measures, but nowhere near the kind of change needed to significantly change the course of the country.

Economists fear that the tax increases and across-the-board budget cuts that will arrive on Tuesday without any intervening deal will slam our still-tender economy, driving it back into recession. Some think we are facing a fiscal "slope" rather than a cliff, with the effect of the changes coming gradually rather than immediately. But come they will.

So this is definitely not a fresh new year full of promise and hope. It is a new year that is overshadowed by the failures of the past to a signficant degree. So celebrate tonight. There may not be much to celebrate tomorrow.



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