So Much Worse than We Realized

washingtonmonthly.com — We knew that the Great Recession was bad. We didn't appreciate just how bad. When Obama administration's economists put together its Recovery Act, it was working with a certain set of data and expectations, and envisioned what a worst-case scenario might look like. They were right about the need for action, but wrong about the scope of the disaster they'd inherited -- the worst-case scenario was far too rosy and the stimulus response was overwhelmed by conditions that were more severe than officials even imagined. Part of this was the result of faulty expectations. The notion of the U.S. unemployment rate going from under 5% to over 10% in just two years was so absurd, many just didn't consider it possible. But it was -- the mess the Bush administration left for Democrats to clean up really was that mind-boggling bad. But part of this was also the result of faulty statistics.

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