What Could Go Right (and Wrong) for the Economy in 2012

If things go right, 2012 could signal the beginning of the end of a four-year economic slump.

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Things aren't likely to improve in 2012, either. As the presidential election race moves forward, Obama and the GOP candidate will offer competing economic proposals and Congress will remain divided. Action on these plans won't take place until 2013.

[See How Americans Are Rethinking Prosperity.]

Reasons for optimism. Despite the threat posed by the European crisis,and the political gridlock in Washington, there is reason for hope. According to Goldman Sach's Tilton, U.S. consumers are saving more and spending less, lightening the country's debt burdens. Tilton also said that the U.S. Federal Reserve could rise above partisanship in Washington and act to stimulate the economy.

Alec Letchfield, chief investment officer of wealth management at HSBC Global Asset Management, said that stock investments made in 2012 would pay off down the line. So 2012 might be a good time for Americans to invest some of the money they saved during the downturn.

@davidcfrancis


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2012 presidential election