Jay Fitzgerald lays it out:
But I’ll restate my case (made here and here and here, even before the stimulus bill was officially passed): It wasn’t a “stimulus” bill. It was more of a “stabilization” bill. The Stabilization Bill was primarily aimed at propping up the public sector, not the private sector, where the true problems lay. There was nothing wrong per se with spending money to preserve public-sector jobs. But that’s not “stimulating” the economy. That’s merely “stabilizing” the economy, i.e. preventing things from getting worse. The Dems either never understood this — or didn’t care. They eagerly embraced the argument that federal debt spending actually creates jobs, latching onto a “jobs multiplier” theory uttered by one economist at Moody’s Economy.com, and launched a massive spending spree on programs that had nothing to do with the underlying economic problems at hand. Sure, they preserved public-sector jobs. But how can you have a new jobs multiplier effect by preserving already existing jobs? You’re merely preserving the already existing jobs-multiplier effect. Right? Repeat: The “stimulus” bill was largely a “stabilization” bill.