Geronimo 909 Wrote:
Jun 13, 2012 3:51 PM
These graphs only tell a part of the story. The graph represents spending in a fiscal year compared to GDP for that year. Discretionary spending has a one year lag, ie the money spent this year is from last years budget process. GDP is representative of the relative health of the economy and is the result of actions taken and laws passed 1 to 5 years previously. Laws and rules enacted today may prompt a car manufacturer to build on new plant in Kentucky but it will take 3 years to build that plant and another year or two to realize the new efficiencies that plant brings to manufacturing that car and thus affect the price or sales of the car. In other words, the economic climate established under Reagan & Bush I may explain GDP growth.