Because most states have to run a balanced budget, we’re seeing a very large drop in state government spending, which almost matches dollar for dollar what the federal government is increasing its spending by. The net result: little total change at all. While we did have a preliminary uptick of 3.5% in GDP growth last quarter, that’s the preliminary number. Analysts are now expecting it to be revised downward to about 1%. Since federal spending accounted for over 2% of that growth number, one can see how it vanished so quickly.