The economy has shrunk because businesses have had no confidence on what was going to happen.  Businesses don't know how much our taxes will go up, how much Obamacare is going to affect them; we are not hiring people because of Obamacare, the taxes, the "fiscal cliff" etc. Right now you never know when you get up in the morning what new disaster is going to be waiting for our future!  Businesses do not budget one month at a time.  We have to prepare our budgets and our financial plans for months in advance.  You can't do that when you don't know what next month is going to bring!