There's a joke my grandfather likes to tell. A man goes to his doctor. Bad news, says the doctor. He gives him the bad news. "Smile," he says at the end. "At least things can't get worse." So the guy smiles. And then things got worse. Come to think of it, that joke isn't very funny. But it's a good description of what's going on in the GDP numbers. First the CBO came out with depressing estimates for economic growth. Then the Administration came out with a substantially more optimistic forecast and folks accused them of juking the numbers. They didn't juke the numbers. They just added in the likely effects of the stimulus. But now it looks like GDP as actually contracted much more rapidly than was first understood, and even the CBO's projections were wildly optimistic. Which is to say the economy appears to be doing worse than even the pessimistic forecasts suggested.
