Sorry to disagree with you but a 3% drop in GDP is not based upon a cut in government spending...that would be a huge huge cut in spending that simply did not occur.
I went to the Treasury Department and checked expenditures for the third quarter and the fourth quarter...I saw expenditures were up by over ten percent. Small increases in consumer spending which has been low is perhaps some improvement...but is not something to write home about.
Those defense contractors are laying people off now, the “savings” from government not investing in private sector that has been established for a long time is going to cost in GDP exponentially the first quarter. Not to say that we should not cut spending, but defense is the one industry sector for the government that actually has a probable good velocity of the dollars spent cause it is entered into an established private sector...
You aren’t disagreeing with me. You are disagreeing with facts in the report from the BEA:
“Real federal government consumption expenditures and gross investment decreased 15.0 percent
in the fourth quarter, in contrast to an increase of 9.5 percent in the third. National defense decreased
22.2 percent, in contrast to an increase of 12.9 percent. Nondefense increased 1.4 percent, compared
with an increase of 3.0 percent. Real state and local government consumption expenditures and gross
investment decreased 0.7 percent, in contrast to an increase of 0.3 percent.”
http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Here’s the table with the data: http://www.bea.gov/newsreleases/national/gdp/2013/txt/gdp4q12_adv.txt
If you have issues with their reported data I suggest you take it up with them.