1. Recent U.S. Economic Growth
In Charts
MAY 2012

2. 1 GROWTH SINCE 2009
The Growth Story Since 2009
 Despite the worst financial crisis since the Great Depression and a series of shocks in its
aftermath, the economy has gradually strengthened since mid-2009, though more work remains.
Real quarterly GDP growth
2009 Q4 2010 Q1 2010 Q2
3.8% 3.9% 3.8%
2011 Q4
2010 Q3 3.0%
2010 Q4 2012 Q1
2.5% 2.3%
2009 Q3 2011 Q3 2.2%
2011 Q1 2011 Q2 1.8%
1.7%
0.4% 1.3%
Japanese
2009 Q2
-0.7% earthquake/tsunami
Debt limit
Apr. 15, 2011 Aug. 2, 2011
Government shutdown Debt limit deal reached
narrowly averted
High oil prices High oil prices
Aug. 2011 Oct. 2011
Feb. 2011 Oil prices fall Oil prices pass $90/barrel
2009 Q1 Egyptian President steps down below $90/barrel
-6.7% Libyan conflict begins
President Obama ratchets up sanctions on Libya
Oil prices pass $90/barrel
2008 Q4 European debt crisis
-8.9% Oct. 2010 Jul. 2011 Oct. 28, 2011
Early May 2010 Greece, Ireland Portugal Greek, Irish, and Portuguese Italian 10y bond yields
Cost of borrowing spikes across Europe bond spreads widen spreads spike close above 6 percent,
Euro falls to four-year low against the dollar remain near or above that
level through late Jan. 2012
2008/09 financial crisis
Source: Bureau of Economic Analysis, Wall Street Journal. U.S. DEPARTMENT OF THE TREASURY

3. 2 GROWTH SINCE 2009
The Components of Growth Since 2009
 U.S. economic growth has been led by consumption, private sector investment, and exports.
Percentage point contribution to real quarterly GDP growth, by component
+10
+5
0
-5 Cumulative contributions to growth since 2009 Q2,
Personal consumption expenditures by component
+8
Gross private domestic investment
+6 +4.3 Total
+3.8
Exports +4 +2.9 +6.8
+2
-10 -0.7
Imports 0
-2
Government consumption and gross
-4
investment -3.5
Total GDP growth -6
-15
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2009 2010 2011 2012
Source: Bureau of Economic Analysis. U.S. DEPARTMENT OF THE TREASURY

4. 3 GROWTH SINCE 2009
International Growth
 Growth in the U.S. has outpaced that of other advanced economies affected by the global
financial crisis.
Real GDP, 2008 Q1 = 100
104
102 U.S.
Germany
100
98 Euro area
Japan
96
U.K.
94
92
90
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2009 2010 2011 2012
Source: Regional sources (see Notes section). U.S. DEPARTMENT OF THE TREASURY

5. 4 UNWINDING THE CRISIS
Wealth, Savings, and Private Demand
 Despite challenges, growth in private demand has outpaced GDP growth since late 2010.
Household net worth, inflation-adjusted (constant 2011 dollars) Year-on-year percent change in real GDP and final sales to private domestic
80 purchasers
$80 trillion
recession 4%
70
Growth in real
60
GDP
50 2%
-$19.3 trillion
40 2007 Q2 - 2009 Q1
30 1
Household wealth has begun to 0%
20 Household come back from a sharp decline
wealth in 2007-08, but has not fully
10 returned...
Growth in final
0 -2% sales to private
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
3 domestic
Household debt and savings as a percent of disposable income Despite these drags purchasers
on spending, private
150% 8% demand has begun
recession -4%
140% Household 7% to show stronger
debt-to-income growth as the
6% overhang of the
130% (left axis)
5% financial crisis fades.
120% -6%
4%
110% 2
…and families are 3%
100% saving more than recession
Household 2%
before the crisis.
90% savings rate 1% -8%
(right axis) 2006 '07 '08 '09 '10 '11 '12
80% 0% Q1
'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11
Source: Federal Reserve Flow of Funds, Bureau of Economic Analysis. U.S. DEPARTMENT OF THE TREASURY

6. 5 UNWINDING THE CRISIS
Fiscal Drag
 State and local governments have been forced to cut deeply and shed jobs in response to fiscal
challenges…
Change in quarterly state and local employment, end-of-period (line, left axis) State and local government contribution to
real GDP growth, percentage points (bars, right axis)
+100 thousand +0.30%
Change in state State and local
0.25 and local government
+50 employment contribution to +0.15%
0.16 0.16
(left axis) 0.12 real GDP growth
0.02 0.01 0.05 (right axis)
0 0%
-0.08 -0.01 -0.08 -0.06
-0.14
-50 -0.19 -0.19 -0.15%
-0.26
-100 -0.34 -0.33 -0.34 -0.30%
-0.37
-0.41
…while private sector growth has continued.
-150 -0.49 -0.45%
Quarterly private sector changes in employment
and contributions to real GDP growth
-200 +1,000 +5% -0.60%
0 0%
-1,000 Private sector Private contribution to -5%
job growth real GDP growth1
-250 -2,000 (right axis)
-10% -0.75%
(Thousands, left axis)
-3,000 -15%
'07 '08 '09 '10 '11 '12
-300 -0.90%
2007 '08 '09 '10 '11 '12
Q1
Source: BLS, BEA. U.S. DEPARTMENT OF THE TREASURY

7. 6 MISCONCEPTIONS
Three Misconceptions About Recent Economic Growth
Some analysts have asserted that the following
factors have been impediments to growth:
1. Regulations. Have increased regulations or
regulatory uncertainty been a major factor in
holding back growth?
2. Taxes. Is a high tax burden – or fears of future
tax burdens – impeding growth?
3. Government. Is government so large that it is
getting in the way of private sector-led growth?
But the facts do not support these assertions.
U.S. DEPARTMENT OF THE TREASURY

8. 7 MISCONCEPTIONS
Are Regulations Holding Back Growth?
 Regulations are not impeding business lending or investment.
Commercial and industrial loans outstanding, constant 2011 dollars (log scale) Percent change in real investment in equipment and software 11 quarters after
NBER trough
1,700
$1,700 billion
1981-82 Cycle 38%
Commercial
and industrial
loans 2007-09 Cycle +34%
Jul. 15, 2010
Wall Street reform enacted
1990-91 Cycle 28%
1,500
1973-75 Cycle 28%
1960-61 Cycle 26%
Average
21%
1,300 (excl. 2007-09)
1969-70 Cycle 21%
+12% 2001 Cycle 19%
($144b)
Since Oct. 2010
1957-58 Cycle 8%
1,100
Jan '09 '10 '11 '12 1980 Cycle 2%
2008
Source: Federal Reserve, BEA. U.S. DEPARTMENT OF THE TREASURY

9. 8 MISCONCEPTIONS
Are Regulations Holding Back Growth?
 Regulations have not dampened corporate profits, even in the industries undergoing significant
regulatory change, such as energy, health care, and finance.
Corporate profits after tax, constant 2011 dollars (log scale) S&P 500 Economic Sectors Index, trailing 12-month earnings per share
70 Consumer Discretionary
1,600
$1,600 billion recession Industrials recession
Utilities
Materials
60 Telecommunications Services
1,400 Information Technology
Consumer Staples
After-tax 50 Energy
corporate profits
1,200
40
30
Health
1,000
Care
+57% 20
($570b)
Since 2009 Q1
10
800
0
-10
Financial
600 -20
2007 '08 '09 '10 '11 '05 '06 '07 '08 '09 '10 '11 '12
Q1
Source: BEA, Barclay’s. U.S. DEPARTMENT OF THE TREASURY

10. 9 MISCONCEPTIONS
Is a High Tax Burden Damaging Growth?
 From 2009 to the present, federal revenues relative to the economy have been at their lowest
levels in 60 years.
Total federal revenues as a percentage of GDP (line, left axis)
22 percent of GDP
recession
21
20
19
18
17
Federal
16
revenues
15
14
14.4% 15.4%
13 of GDP of GDP
1950 2011
12
1946 '51 '56 '61 '66 '71 '76 '81 '86 '91 '96 '01 '06 '11
Source: OMB, BEA, NBER. U.S. DEPARTMENT OF THE TREASURY

11. 10 MISCONCEPTIONS
How Large are Proposed Tax Changes?
 The President’s Budget proposes new revenues that amount to less than 1 percent of GDP.
Projected revenue raised in the President’s FY2013 Budget and projected cumulative GDP, Fiscal Years 2013 – 2022.
Total new revenue
proposed in
President’s FY2013
Budget, 2013 - 2022
<1% of GDP
CUMULATIVE
GDP
2013 - 2022
Source: Office of Management and Budget. U.S. DEPARTMENT OF THE TREASURY

12. 11 MISCONCEPTIONS
Would Proposed Tax Changes Hurt Small Business?
 Letting the top two income tax brackets return to pre-2001 levels has a minimal impact on
small businesses with employees.
Projected revenue effect of reinstating 36 and 39.6 individual income tax brackets as proposed in the President’s FY2013 Budget, Fiscal Year 2013
Total income of high-income
filers in the top two brackets2
$1.2 trillion
13% of total income
Total income1 of all filers
$9 trillion
Total income of high-income filers in the
top two brackets who own small
businesses with employees3
$400 billion
4% of total income
Small business income of high-
income filers in the top two
brackets who own small
businesses with employees
$113 billion
New revenue4 from small business income of 1% of total income
high-income filers in the top two brackets who
own small businesses with employees
$2.9 billion
<0.03% of total income
Source: Treasury analysis. See Notes section for methodology. U.S. DEPARTMENT OF THE TREASURY

13. 12 MISCONCEPTIONS
Has Government Grown?
 Federal employment is at historic lows relative to the overall workforce.
Federal civilian employment as a percentage of the labor force*
5%
recession
4%
3%
Federal
civilian
1.8%
February 2012
employment
2%
1%
0%
'48 '52 '56 '60 '64 '68 '72 '76 '80 '84 '88 '92 '96 '00 '04 '08 '12
* Periods after 1980 exclude temporary Census workers.
Source: OMB, BEA, BLS. U.S. DEPARTMENT OF THE TREASURY

14. 13 MISCONCEPTIONS
Is There Concern About the Size of Government?
 Investors remain confident that the U.S. government will meet its real fiscal obligations, as
demonstrated by…
5-year sovereign credit default swap prices One-, five-, and ten-year U.S. inflation expectations
300 basis points 3 percent
2
…low inflation
expectations.
10-yr inflation
250 expectations
France 2
1
…low cost of
200 insurance against
default and…
1
150
5-yr inflation expectations
Germany
100
0
50 1-yr inflation expectations
United States
-1
Jan '10 '11 '12
0
2009
'10 '11 '12
Source: Bloomberg, Federal Reserve Bank of Cleveland, Treasury. U.S. DEPARTMENT OF THE TREASURY

15. N
Chart 1
Notes
Oil prices are West Texas intermediate crude oil spot prices.
Chart 10 cont.
2 “High-income filers” are those who would be subject to the top two individual income tax
brackets under the President’s FY2013 Budget proposal.
Chart 3
Regional sources 3 “Small business owners” defined as filers a) with business income and deductions of less
Euro Area: Statistical Office of the European Communities than $10 million, and b) who employ other individuals. See Knittel et al, “Methodology to
Japan: Cabinet Office of Japan Identify Small Businesses and Their Owners”, Office of Tax Analysis Technical Paper 4, August
U.K.: Office for National Statistics 2011.
U.S.: Bureau of Economic Analysis
4 “New revenue” includes revenues raised in Fiscal Year 2013 by reversing the
“Euro Area” consists of the following 17 European Union member countries who have adopted EGTRAA/JGTRAA rate cuts on the top two individual income tax brackets to small business
the euro (European Monetary Union): the 11 original members - Austria, Belgium, Finland, income of high-income filers who own small businesses with employees.
France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain - and Greece
(from January 2001), Slovenia (from January 2007), Cyprus and Malta (from January 2008), U.S. Department of the Treasury, Office of Tax Analysis calculations. Revenue estimate excludes
Slovakia (from January 2009) and Estonia (from January 2011). increased revenue that would come from the expiration of other upper-income EGTRAA/JGTRAA
tax cut provisions such as those affecting itemized deductions, personal exemptions, qualified
Chart 5 dividends, and capital gains.
“Private contribution to real GDP growth” defined as the sum of the contributions of real
personal consumption expenditures, real gross private domestic investment, and real exports to The calculation of the additional revenue from small business employers takes into account the
overall annualized quarterly real GDP growth, in percentage points. variation among taxpayers in the importance of small business income. Since the highest
income classes pay most of the added tax but are less dependent on small employer income,
Chart 10 the small employer share of the total tax increase is lower than the small business share of total
1 “Income” defined as adjusted gross income. income.
U.S. DEPARTMENT OF THE TREASURY