Associated Press
Saeed Halim, an employee at Party Warehouse in Kansas City, Mo., installed a display for New Year's Eve hats inside the store on Friday afternoon, Dec. 28, 2012, in advance of Monday's end of the calendar year.

New Year's Eve means predictions for 2013. Here are mine.

In Europe

The Eurozone is in a slow recovery from a "double dip" recession and its outlook is not good. In spite of hopeful press releases, the situation in Greece is still dire. There are street riots protesting the measures taken by the government — it had no choice, considering the terrible state of the country's balance sheet — which add the uncertainty of political instability to the challenge of an unravelling economy. Italy, Spain and Ireland are in danger of going the same way. The survival of the Euro depends on the determination and survivability of Germany's Chancellor Angela Merkel, who will face an increasingly restless electorate in the fall.

Prediction: In 2013, Europe's economic troubles will create unpleasant consequences for our own recovery because the Eurozone is our biggest trading partner.

In housing

A vigorous housing recovery has always led the way out of past recessions, but not in this one. However, there are now good omens with respect to housing that indicate that things are changing for the better. Residential housing values rose in 2012, as the huge inventory of unoccupied homes created by the housing bubble in 2008 continued to shrink. Mortgage rates went to all time lows while rental fees started going up. Realtors are finally optimistic.

Prediction: 2013 will be a good year in residential housing, both in construction and price appreciation, which will be good for the economy.

In health care

President Obama's health care program contains many new taxes that take effect in 2013. The companies on which they are levied will not be able to absorb them and will pass them on in higher prices. This will trigger higher insurance premiums, triggering in turn political calls for legislation to stop "price gouging" on the part of insurance companies. In the meantime, more and more doctors will stop seeing Medicare patients and a large number of states will opt out of the plan's Medicaid provisions.

Prediction: In 2013, controversy over healthcare issues will escalate, with neither an easy resolution to them nor a smooth transition to the new law.

In government

For the first time since the end of the Cold War, there are crises of political governance in every developed nation at the same time. I've already described Europe, the world's largest regional economy; in Japan, once the second largest national economy, economic stagnation has been going on for decades with no clear path out. China had decades of rapid growth but now is racked with uncertainty about its ability to handle problems that were pushed aside during those years. "Arab Spring" not withstanding, the Middle East is in flames and disarray.

In the U.S., our fiscal situation lurches from one crisis to another, with the two parties more ideologically polarized than most people can ever remember. Regular procedures in Congress are frozen because of partisan gridlock — no budget passed in the last four years — suggesting that our political system has become incapable of addressing our long-range problems.

Prediction: 2013 will be a rocky year, politically.

In the long term

Since leaving the Senate and re-engaging with the private sector, I have rediscovered the forces within America that have the capacity to shape the future in wonderful, productive, inventive ways. Government is important, but it isn't all-important; throughout our history it has been the energy contained in the entreprenurial spirit of the American people that has gotten the job done. We have problems, but that spirit is still there. I remain an optimist.

Prediction: 2013 will be a better year than 2012. Keep the faith.

Robert Bennett, former U.S. Senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.