From Recession to Recovery: Analyzing America's Return to Growth by the Milken Institute

The Milken Institure believes that's what's fueling the recovery is economic growth in developing countries, a trend that supports U.S. exports,  business investments in equipment and software, previously deferred consumer purchases of durable goods, record long term interest rates, and a benign inflationary enviroment that will allow the Fed to keep short term interest rates at zero until late 2010 or even into 2011.

Real state and local government purchases are projected to decline 0.8 percent in 2010. By 2011, a modest gain of 0.7 percent is expected. Real state and local purchases are projected to rise over 1.0 percent on average from 2012 to 2015.

Federal spending cuts, tax increases and a cyclical improvement in tax receipts will bring the deficit down from $1.3 trillon in 2010 to $553 billion in 2013. The deficit begins to grow again in 2014, and by 2015, it's back to $681 billion. By 2015, the budget deficit represents 3.5% of nominal GDP.

New home construction won't aid economic growth in 2010, but residential fixed investment should jump 26.0% in 2011, and 25.7% in 2012. We've been bouncing off the bottom.