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CBO: largest growth shortfall since the Great Depression
New Economist —  The Congressional Budget Office's new director, Douglas W. Elmendorf, testified on the state of the US economy before the House Budget Committee today. It makes sober reading. An accompanying ...

links for 2009-01-28
Economist's View — The perfect (Fed Chair) appointment - Bronte Capital The numerate honey bee - EurekAlert Misplaced Handwringing on the Stimulus - Tom Bozzo The Economy and Stimulus - CBO Director’s Blog Toll Roads Are Paved With Bad Intentions - WSJ.com Stimulus Plan Would Provide Flood of Aid to Education - NYTimes.com Globalisation and business cycle transmission - voxeu.org How Nice Should Aid Commentators Be? - Easterly Ricardian ...

We're Nowhere Near A Bottom In Housing
The Bonddad Blog — Click for a larger image Consider the following chart from the latest CBO Congressional testimony:

What the centrists have wrought
Paul Krugman — I’m still working on the numbers, but I’ve gotten a fair number of requests for comment on the Senate version of the stimulus. The short answer: to appease the centrists, a plan that was already too small and too focused on ineffective tax cuts has been made significantly smaller, and even more focused on tax cuts. According to the CBO’s estimates , we’re facing an output shortfall of almost 14% of GDP over the next two years, or around $2 trillion. Others, such as Goldman Sachs, are even more pessimistic. So the original $800 billion plan was too small, especially because a ...