A 6.2 Percent GDP Drop? Ouch!

And there is more pain to come.

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The revised fourth-quarter GDP number is pretty terrible, biggest drop since 1Q 1982. And it might get a twin in the current quarter. And 2Q might not be much better. But yet Team Obama expects over 3 percent GDP growth in 2010, followed by an acceleration in 2011 and 2012 despite higher income and investment taxes on wealthier American and higher energy taxes on everyone. Here in alternative view:

IHS Global Insight expects that in the current quarter the U.S. economy will contract by another 6%.  We also expect a second quarter contraction of 3% to 4%. The recently enacted $787 billion stimulus package will have virtually no impact on growth in the first half of this year, but will help to turn the economy around by the second half.  Even then, the best we can hope for is an average growth rate of around 0% in the third and fourth quarters—with a small contraction in Q3 followed by weak positive growth in Q4.