Increase In Spending, GDP, National Debt, and Deficit, Since 1999

Increase In Spending, GDP, National Debt, and Deficit, Since 1999

Tomorrow the 2012 Federal Budget is revealed. To help forecast what this will mean for the economy and the stock market, take a peek at the Figure above. The US National Debt (in blue) shows what is called "hockey stick" behavior, i. e., a sharp change in slope upward, which occurrs at the start of 2009 and continues at an accelerated rate or slope, as compared to calmer period 1999-2008.

The GDP, on the other hand, starting in 2009, pretty much runs into a brick wall, leveling off and nearly ceasing its previous steady upward climb from 1999. Most important however is the behavior of the Deficit (black line) which shows "hockey stick" on steroid behavior between 2008 and 2009, rising almost vertically.

The deficit jumped from averages of about $300-$400 billion 1999-2008, to current levels of $1300-$1500 billion, nearly tripling in value from 2008 to 2009. This is what drives the blue curve (National Debt) through the roof. The word is that the new budget tomorrow projects a 2012 deficit of $1.5 trillion, matching the highest levels since the Great Recession. Follow me on abelesnik.blogspot.com for discussion, economic predictions, and more charts and graphs on the economy, plus some Shakespeare quotes.