The economy is doing alright despite government cutbacks

The economy is holding up surprisingly well in a year of austerity:

It adds up to this reality: In a year when tax increases and spending cuts by the federal government were expected to bleed life out of the economy, the strengthening housing and financial markets are proving to be more powerful than acts of Congress.

Americans with higher incomes are wealthier thanks to the stock market’s 16 percent rise so far in 2013. Middle-income earners, whose assets are disproportionately tied up in their homes, are becoming wealthier thanks to higher housing prices — up 10.2 percent in 20 major cities in the year that ended in March, according to the S&P/Case-Shiller home price index released Tuesday.

The tax increases and spending cuts as a result of the fiscal cliff this winter haven’t crushed the economy – but they have kept it from doing much, much better.

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