Congressional Budget Office Real GDP gap graph

Next term is Macroeconomics and we will be watching how the new administration attempts to "Fill the Gap":

                                   
The figure above is from the CBO report on page 2 (Click for the report in a .pdf file).  There is a huge amount of interesting estimated data available from the report.

For example, 3 month Treasury Bills are expected to average 0% through 2010!!  Unemployment is anticipated to still average 9% in 2010!

Also noting the above graph, the U.S. never was above potential Real GDP since the 2000 Technology bubble burst!  Very interesting!   So WHAT does "Potential Real GDP" mean?  The level of production in the U.S. economy when we are operating fully.  That is, the U.S. is using resources to their best use but NOT overusing them.  Notice that during the technology boom, the U.S. was actually "OVERUSING" her resources.  We call these ups and downs "the Business Cycle (Booms and Recessions)" in Macroeconomic terms.
 

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