Face It: 2013 Is Gonna Be a Bummer

Whether it’s Barack Obama or Mitt Romney taking the presidential oath of office in January, someone will have the misfortune of overseeing an economy that looks a lot like the one we have today: low growth, persistently high unemployment, and huge amounts of debt. Depending on what happens with the “fiscal cliff,” there’s at least a chance the U.S. will be in recession. The mere threat of $600 billion in tax hikes and spending cuts is already delaying business spending. Yet even if Congress does broker a deal and the worst of the fiscal cliff is postponed, 2013 is shaping up to be a rough year.

Big economic forces, both domestic and abroad, are combining to dampen growth. Fundamentals such as demographics and household finances that helped spur past recoveries are now slowing things down. These trends aren’t affected much by policy, so fixing them will be beyond the immediate grasp of an Obama or Romney administration. “No matter who wins the election, from a truly economic standpoint, 2013 will be an extremely challenging year,” says David Rosenberg, chief economist at Gluskin Sheff + Associates.