Today's earlier post has naturally aroused suspicions that I am simply a knee-jerk stimulus opponent. This is not true. I tepidly supported the notion of stimulus, though I also thought that the stimulus we did was not well executed, because Democrats wanted to use it to execute their policy priorities, rather than to provide maximal stimulus. I said at the time that "shovel-ready" infrastructure projects really weren't; that's not how the government procurement process works, and the federal government tends to slow things down, not speed them up. As it was under George Bush, politicians seemed more interested in using stimulus as an excuse for stuff they already wanted to do, than in actually figuring out what was most stimulative. (My candidates: payroll tax cut, more lavish unemployment benefits).
And what do I think now? Well, protestations aside, the stimulus we ended up doing was huge. Maybe it wasn't as huge as some would have liked, but $800 billion dollars is almost 6% of GDP. (2% if you spread it over 3 years, as the stimulus was). All told, running a deficit of 10+% of GDP ought to have some pretty powerful stimulative effect.
So far, I've been underwhelmed. Maybe we were going to end up so far in a ditch that we wouldn't even be able to see sky when we looked up, only mud. On the other hand, maybe simply not repeating the massive, massive monetary mistakes of the 1930s was enough to keep us out of the Great Depression, and the stimulus merely tinkered around the edges. I find the latter at least as plausible as the former.