Recession GDP Drop Revised Bigger

As economic data becomes more aged (to a point), it becomes more accurate because lagging data points are included.

From the end of 2007 when the recession began through June 2009 when the recession ended, GDP fell 5.1% with newest revision increasing the drop from 4.1%.

Now for those who think that TARP and the Fiscal stimulus passed by Congress under both Bush and Obama was a waste of money, please rethink that again.  How far would GDP have fallen without that stimulus?  How much higher would unemployment be today? and where would the housing market be if unemployment were significantly higher?  What would have generated the turn around?

Keynes was not wrong!  Fiscal stimulus is a necessary precondition to ending deep recessions and depressions.  Monetary policy can only support that.  Milton Friedman was also correct.  Governments cannot borrow indefinitely and need to run a budget surplus when the economy is growing.

This is why Ronald Reagan raised taxes during his second term.  This is why Bush I raised taxes.  Revenues were needed to pay for the necessary government and create the room to have fiscal stimulus when needed.  Bush II forgot this and didn't find a way to pay for the War on Terror.  Now the government is out of room to borrow, the messy politics of deficit reduction have only begun, and the country will likely slide into another recession or an extended period of very slow growth.

Fortunately, for those looking to enter the work force, the baby boomers are burning out and want to work less if they can afford it so there will be good jobs for the educated cream of the crop.