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Economic Forecasts

9 Things Going Right

The lingering effects of the Great Recession may still cast a pall across your finances and your future. But fear not -- here’s good news for 2011.

Woe is the economy these days. Unemployment persists near 10%, and skyrocketing public debt threatens to bankrupt state and local governments. Small businesses can’t get loans, and home foreclosure rates are still on the rise in some places. Meanwhile, strident partisanship rules our political discourse.

But don’t despair. Here are nine things going right as 2010 comes to a close and a new decade unfolds. See what you think. And please share your own thoughts and contributions in the reader comment area below.

Got a job? You’ll likely get a federal tax cut next year. As part of the new law extending Bush-era tax cuts, Social Security payroll taxes will drop starting in January 2011, and the cut will be significant for many Americans. For example, taxpayers making $50,000 a year will see an extra $83.30 a month in their paychecks. Those making $106,800 a year or more will see an extra $178.00 monthly in their take-home pay. Our quick and easy Tax Cut Calculator can show you what the tax cut is worth to you.

Bye-bye, bear market. The major stock indexes have risen impressively two years in a row, with the S&P 500 returning 27% in 2009 and 15% in 2010. And barring a calamity, we predict the Dow Jones Industrial Average should finish 2011 above 12,500, with another 7-10% gain. See our 2011 Investing Outlook for specific opportunities in stocks, bonds, mutual funds and other investments.

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Violent crime in the U.S. is falling. Here’s a surprising trend. Historically, crime has risen during hard economic times. Not during the Great Recession, however. Incidents of violent crime fell 6.2% in the first half of 2010 versus the same period in 2009, according to the FBI. Robberies were down more than 10%, car thefts and arson declined 9.7%, rapes fell more than 6%, burglaries dropped 1.4%. Why? Demographic experts point to an aging U.S. population less inclined toward aggression and mayhem, plus improvements in law enforcement. The FBI said the biggest declines were in medium-size cities with populations under 1 million.

The U.S. is far richer in natural gas reserves than previously realized. Supplies are 50% larger than in 2006, and still growing. Huge production increases have boosted winter storage levels of the fuel to a record high. That means prices during peak winter demand next year likely will top out at $5 per million Btu, one-third of the average winter price for the last decade. This superabundance of gas supplies should temper costs for residential and commercial heating and electricity generation for years to come. The good news doesn’t end there: Rapidly evolving technologies are yielding vast new quantities of the fuel from shale rock from New York and Pennsylvania to Texas, Montana and North Dakota.

If you buy a new car, you’ll probably be saving at the pump -- or not filling up at all. After decades of stop-and-go policies, better fuel economy finally seems to be a genuine priority in the auto industry, even as gasoline prices are likely to stabilize around $3 nationally next year. It’s not just better fuel economy in new models and more sales of hybrids. The first mass-market electric vehicles are ready to hit the market with Nissan’s Leaf and Chevy’s Volt (read our review of the 2011 Volt). And the infrastructure is growing every day to support such vehicles.

Traffic deaths are at their lowest level in 60 years. There are more cars on U.S. roads and more miles driven than ever before. Yet highway deaths totaled 33,808 in 2009, a 10% drop from 2008 and the lowest number since 1950 (33,186), the year the National Highway Traffic Safety Administration began keeping records. The 2009 fatality rate was 1.13 deaths per 100 million vehicle-miles driven, the lowest it has ever been. Experts credit far safer vehicles, nearly universal seat belt use and stronger enforcement of traffic laws.

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Genetic testing is revolutionizing medicine. As researchers become more adept at gene mapping, they are offering doctors and patients better choices for successful therapies. For example, the Food & Drug Administration is close to approving a promising drug for lupus, Benlysta, from Human Genome Sciences and GlaxoSmithKline. Scientists are tweaking genes to make disease-resistant livestock and using genetically altered cattle to make antibodies to fight human diseases such as botulism and anthrax. The discoveries are accelerating, and greater breakthroughs lie ahead. For more, see our Slide Show: 9 Technologies That Will Change Your World.

Technology is revolutionizing the way we live. Ever wonder how you got through the day without a computer? Or Google? The next wave of advances is under way with mobile phones and the consumer embrace of tablet computers such as Apple’s iPad and Amazon’s Kindle. There are now more than 200,000 applications for your handheld device that can do everything from finding your bank’s closest ATM in a city you’re not familiar with to getting instant updates from all the major news and financial media outlets. And magazines and newspapers are reinventing themselves on new mobile platforms that promise to deliver information you value in smarter, more interesting ways.

Score one for the wild turkey. The wily bird that Benjamin Franklin wanted to crown as a national symbol (instead of the bald eagle) was hunted almost to extinction in the early 20th century, gone from half of the 39 states it once roamed and scarce in the rest. Conservationists and wildlife advocates worked for decades to turn that around. Today, wild turkeys are so common that they are hunted in all 49 continental states, plus Canada and Mexico. If there’s a hunter in your household, you may get to taste one this holiday season -- or next.

Happy Holidays from Kiplinger -- and may you have a prosperous 2011!