For the fourth year in a row, Americans approach the final day with economic worries on their minds. In 2008, we expressed a sense of trepidation on New Year's Eve, wondering just how bad the sudden collapse of financial institutions and markets was going to be. Today, we see many signs that point to brighter days ahead for the new year, but we gaze on them with a dose of skepticism and caution.
2011 should be remembered as a time when America's politicians utterly failed to confront the reality of looming problems. As 2010 ended, President Obama's deficit commission issued a report that competently defined the problem and suggested a solution that involved a combination of reforms and budget cuts. Despite this, the president proposed a budget early in 2011 that included none of this and instead raised the federal deficit further.
That budget was forgotten almost the moment after it was proposed, but as the year progressed, attempts similar to the deficit commission's efforts to find dry-eyed solutions to the runaway debt and overspending met the same fate. Republican Rep. Paul Ryan of Wisconsin made a budget proposal that, rather than marking the start of a serious debate, was demagogued to death by politicians who offered no alternatives.
In the midst of this, Standard & Poor's downgraded the credit rating of the United States, while other rating agencies warned the nation to get its finances in order. At various times during the year, Congress nearly shut down the government over differences as to how to extend its debt ceiling or extend tax cuts. It organized a so-called "supercommittee" to draft a workable solution to the long-term deficit and gave it a November deadline. But when the time came, the committee could only declare its efforts a failure and walk away.
With each new fiscal crisis in Washington, the nation's politicians seemed to be willing to push problems onto voters in 2012. But unless voters give one party a decisive majority in November, the need for compromise will loom greater than ever, with history promising to be the ultimate harsh judge.
The year that is ending also saw the official end of the U.S. involvement in Iraq, as well as the beginning of a significant draw-down in Afghanistan. Here, too, history will judge whether the missions were successful or whether the pullouts were premature. That judgment is bound to come more quickly, however. Recent violence in Iraq is a reason for concern.
In Utah, the end of 2011 provides much reason for optimism. Unemployment here is at about 7 percent, much lower than the national average. End-of-year reports show the commercial and industrial real estate markets are beginning to prosper. Even residential real estate, which suffered another 8 percent drop in average prices this year, shows signs that it could be poised for a strong year.
That news is a good prelude to the scheduled opening of the downtown City Creek project in 2012, which likely will infuse the state's capital with commercial energy and spur other development. In addition to this, the Utah Transit Authority opened two major new TRAX lines this year and continues to work on an airport line and an expansion of FrontRunner. And for the first time since the recession, the governor has proposed a budget that assumes a growth in state revenue.
These are reasons for cautious optimism as 2011 ends. If Utahns could count on Washington (and on Europe getting its affairs in order), that optimism would be much stronger.