So President Obama has been reelected (I hear both the cheers and the boos) and he is facing some big challenges on the economic front.

In the broad sense he’s facing a European crisis that is bound to impact the American economy, spiraling deficits, high, but slowly improving unemployment numbers (not counting the chronically unemployed; another problem), banks who are still not lending and much more.

In the short term he has to lead through some tough choices to avoid the automatic spending cuts that are due to take effect in January 2013.   In the long term it is his wish to address some issues of the middle class (a tale every candidate tells.)

The unemployment rate sits at 7.9%, down from earlier in the year and housing prices are creeping up, as sales increase to their best levels in two years.  As a business.time.com article points out, rising home prices help consumer confidence because they “feel richer” and banks are more likely to lend, as they believe that the homes will hold or increase in value.

Some believe that the record low interest rates will begin to pay off this year, as less money is spent on home finance, so more can be spent on other goods and services.

Another optimistic note – Americans owe less as a percentage of after tax income than at any point since 1993.  Consumers pay 10.7% of their after after-tax income on interest on homes, credit cards, installment loans, etc. 

That is down from 14% in 2007.  This means they have more income to spend on other things.

Assuming the President and Congress reach an agreement on the pending “fiscal cliff,” there are many indications that a slow, but steady recovery will continue through 2013.