You may recall my warning that the 3.5 percent figure in the Advance report would be revised downward on the day it was published. Now, according to the BEA's newly revised estimate, only 1.3 percent of GDP growth was NOT provided by Cash for Clunkers. So, if you consider the even larger stimulus provided by the $8k housing credit, which is not separately accounted for, it is quite obvious that economic activity is still contracting even if the GDP statistic is not.
It's like watching someone inflate a dead horse and then viewing the horse deflate in jittery slow motion. Soon, others come to the painful conclusion that the horse has been dead for some time.
Okay, that was a weird analogy.