Actual GDP

Now, check out that graph. In 2001 we went through a recession. What is interesting is the drop in GDP corresponds to that exact time frame. At the same time you can see the deficit spending started to increase. Now what I find interesting is look at 1/1/95 and you will see all three lines trending down during that small recession. They then started trending back up about a year later and continued up for about a year until 1/1/97. Fast forward to 1/1/2001 and we see that when the federal deficits increased at a faster rate, the nominal and actual GDP decreased. In 1/1/2002 the nominal GDP started to improve, but the actual GDP continued to slide down for about another year. Beginning about 1/1/2003 the lines continued on about the same course until 1/1/2008 when things took a drastic change. What I want you to pay attention to, that I found interesting, was what happens about 1/1/09. At this time the nominal GDP started to become an upward slope while the actual GDP continues down. Now if you remember we saw the same thing in 2002. Look at the slopes, even they look similar to what is happening now, but the real difference is the deficit spending as it increased at a sharper rate than before. The actual GDP has dropped over 12%. This will be hard to recapture anytime soon with the deficit spending that is occuring now. Hold on, I don't think we are done yet....hope I'm wrong though.