Just How Bad Will It Get?
Notice that the no-stimulus counterfactual output gap and unemployment rates are noticeably worse now than only a month ago (see this post). For 2010, the February counterfactual was -6.3% of GDP, now around -10%; the February counterfactual for 2010 was 8.7% unemployment, now it's nearly 11% (I'm eyeballing the current counterfactuals off of Figures 2-1 and 2-2)....My guess is that that "massive" stimulus is going to look a lot less "massive" given the severity and duration of this recession.
A month ago CBO estimated that unemployment would hit 8.7% in the absence of a stimulus package. Now they think it would have been around 10.5%. With the stimulus, they think it will top out at a little over 9%.