Remember back in the beginning of 2009, when the administration was telling us a small stimulus was sufficient? Well, part of the reason may have been the rose-tinted glasses with which the administrations' economists saw the recession. Check this CEA report from February, 2009, in which they projected that this recession would be one of the lightest and briefest in the postwar era. They projected GDP would decrease only 1.2% in 2009 (following a contraction of 6.4% in Q4 2008 and an expected 6.0% contraction in Q1 2009), making the 2009 recession the 3rd lightest of 11 post-war recessions.
I'm not sure how the deepest financial crises since the Great Depression, in which the Fed hits liquidity trap territory early on, leads any economist to think it's going to be a light, quick recession.
In any case, the latest revision was that GDP shrank 2.6%. So, what seemed at the time to be a hopelessly optimistic forecast turned out to have been a hopelessly optimistic forecast by the "best and brightest" economists around.
In Defense of the Conventional Wisdom
34 minutes ago