10 Glimmers of Light Amidst Economic Gloom

The fiscal cliff and other potential pitfalls abound, but a lot of things are slowly getting better.

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A bitterly divisive election is three weeks away, and our newly elected and re-elected leaders will then have little time to prevent a perfect economic storm of tax hikes and enforced federal spending cuts. Things don't look any better overseas. Iran may be close to getting the bomb, North Korea says its missiles can hit American soil, and our Afghanistan and Middle East problems remain enormous.

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four women jumping along the beach at sunset

Underneath this drumbeat of bad news, however, are a number of smaller-scale causes for optimism. They often don't make headlines and get lost amidst the din of election-season shouting. But things in the U.S. of A. may actually be getting better, often in spite of ourselves. Time may not heal all wounds, but it has provided needed recovery time for individuals and businesses.

1. Consumer confidence is up. Pollsters report that consumer confidence remains near a five-year high. Given all that's gone wrong in the world over the past five years, it's nothing short of miraculous that people have emerged from their bunkers and like what they see at least a little bit.

2. We are paying down our debts. It's taken years, but consumers have made solid progress paying down debts, shedding credit card accounts, and refinancing mortgages. People are hardly flush. But they are doing much better when it comes to living within their means and creating a foundation for future growth.

3. We are spending more money, too. At the same time, consumer spending is growing at the kind of modest pace that can support growth without putting us back into a credit bind. Holiday sales are forecast to grow 4 percent this season. That's a bit less than the past two years but, to use the new buzzword for economic trends, it is a "sustainable" trend.

4. More of us are working. Last month's improvement in the unemployment situation should be put in the longer-term context of an economy that has stubbornly resisted any kind of traditional recovery. Without getting sucked into the endless rabbit hole of possible reasons, let's just take a step back and appreciate that things are moving in the right direction on the jobs front.

[Read: What Would Happen If We All Paid Off Our Debt?]

5. The housing market continues to improve. Likewise, no one is handing out any awards for how the nation's mortgage mess has been handled in recent years. It's been a shambles, yet the nation's housing markets have slowly recovered. Stronger sales of existing properties have lead, over time, to a boost in new housing starts and better times for the depressed homebuilding industry.

6. Health reform is bringing real benefits. Let's put aside for the moment the issue of whether there are better or more cost-effective ways to insure Americans and provide them with good healthcare. The health reform law we've got, whatever its flaws, is enabling more people to get access to healthcare, including an expanded list of free preventive health services.

[Read: Major Health Reform Changes Effective in 2012.]

7. Europe has still not collapsed. Giving the European Union the Nobel Peace Prize may have been overstating things a bit. But the Euro has not fallen apart so far, and neither has the EU. And the longer it avoids a contagious calamity, the more likely it is that any unpleasant consequences will at least be manageable.

8. Demographics are on our side. The flow of retiring baby boomers is reducing the nation's pool of available workers. Over time, it also will lead to lower unemployment rates and, just maybe, wage gains that reflect worker shortages in some industries and metropolitan areas.

9. Congress can't get any worse. OK, I know this is a really dangerous thing to say and risks the wrath of the gods. But it is very hard to imagine a worse-performing Congress. After arguing a lot but doing very little to address the country's serious problems, the 112th session of Congress has earned its single-digit public approval marks. Even modest signs of some type of stability in federal budget policies would give a lift to the economy.

[In Pictures: The S&P's 10 Worst Trading Days.]

10. The worst is over for state and local governments. Lacking the ability to run deficits (except, of course, in their seriously underfunded pension systems), state and local governments have laid off employees, cut services, and raised taxes and fees to make ends meet. The nation's unemployment rate would look a lot better were it not for the million-job gap between current employment levels and what they would have looked like with normal growth during the past four years. With the exception of some high-visibility municipal bankruptcies, the financial picture in most states has stabilized. Jobs are coming back as well.