Vice President Biden acknowledged this weekend the administration underestimated the extent of our economic problems:

“There was a misreading of just how bad an economy we inherited,” he said in the interview, which aired Sunday. He and other White House officials say the administration relied on consensus economic figures in January when they were developing the stimulus package.

Of course, everyone knows the consensus of economists are never right.

Now, Laura Tyson, who serves on a panel that advices the president on economic policy, is reported to be recommending additional stimulus spending:

Addressing a seminar in Singapore, Tyson said she felt the first round of stimulus aimed to prop up the economy had been slightly smaller than she would have liked and that a possible second round should be directed at infrastructure investment.

“The stimulus is performing close to expectations but not in timing,” Tyson said, referring to the slow pace at which the first round of stimulus had been spent on the economy.

Tyson, who is a dean of the Haas School of Business at University of California, Berkeley and was also a White House economic adviser to former President Bill Clinton, said an additional factor affecting the stimulus was that the economy was in a far worse shape than the administration had estimated.

Swamp Report is not sure how Dr. Tyson can argue the stimulus is performing “close to expectations”.  Consider this chart (click to enlarge) prepared by Calculated Risk:

Looking at the chart, one can argue that the stimulus package made unemployment worse than doing nothing.  But at best, Biden and Tyson are right – the administration has indeed underestimated the extent of the problems facing us.  It appears to be more than just underestimating the extent – it’s misunderstanding the cause of the problems.  Spending and debt got us into this mess – more of the same will not get us out of it.