On my January 21st posting (http://rudyrentzel.blogspot.com/2009/01/infrastructure-spending.html), I spoke about how increased spending under both Hoover and Roosevelt at the start of the Great Depression did not end our economic woes. One way to measure this increase in spending is as a percentage of GDP, which gives a better picture than numbers.
In 1930, government spending represented 3.4% of GDP. By 1932, even before Roosevelt entered 
office, government spending increased to 6.9% of GDP. This increase occurred under Hoover and a Democratic Congress. (See the above link.) By 1934, government spending increased to 10.7% of GDP. From there it hovered up and down around 10% ending up at 9.8% in 1940. Under Roosevelt, the government increased spending by about as much of a increase as a percentage of GDP as it had under Hoover. Under the combination of both Hoover and Roosevelt, government spending tripled as a percentage of GDP from its 1930 level.
On the deficit side, in 1930, the government did not have a deficit, it had a surplus. By 1932, the deficit represented 4.0% of GDP. By 1934, the deficit represented 5.5% of GDP. From there it hovered around 3% of GDP, ending exactly at 3% of GDP in 1940, though it briefly droped to 0.1% of GDP in 1938.
By April 3rd of 2009, both the House and the Senate approved modified versions of
President Obama's fiscal year 2010 budget of $3.6 trillion. The Congressional Budget Office projects this spending will represent 25.5% of GDP, more than double the percentage of GDP ever reached in the Great Depression with New Deal spending. On the deficit side, the CBO projects a deficit of near $1.4 trillion, which will represents 9.6% of GDP, almost double the percentage ever reached in the Great Depression under New Deal spending. This represents an unprecedented level of government spending and deficits, with the exception of a war on the level of WWII.
While both the government spending spending and deficit, as a percentage of GDP has risen significantly over recent years, President Obama often reminds us he inherited a fair size spending increase and deficit to start with, since it started under the second Bush. What he doesn't mention is that he is in part to blame. He was a U.S. Senator from Illinois when those budgets and spending plans were passed, and voted for those outlays, including the bank bailout - the TARP. He was part of the majority that controlled Congress starting in 2007, and thus set the budget. He cannot escape responsibility by the simple claim that he inherited this budget.
The increased government spending and deficits will tend to keep investors from investing as 
occurred at the start of the Great Depression, and prevent the recovery that normally kicks in after a recession, or at least stagnate it as occurred in the 1970s. The money the government spends comes out of the private sector, and is not available for invstors to invest. Investors will tend to keep money they have on the sidelines there until they see a government that controls its spending and debt (even China is now concerned about our level of government spending and deficit), though they will invest some as they see the economy improve. They will be concerned that such spending will inevitably lead to higher taxes, and they will tend to seek countries to invest that they believe will keep the tax burden lower which will leave them with more profits. Until they wholeheartedly invest in our economy, any recovery will tend to only limp along.
