“There is every indication that the “stimulus” had a multiplier less than 0.5 once we get all the downward adjustments done in a year or so. That is truly pathetic when you consider that long term borrowing or taxation we need to pay it back will certainly have a negative effect on aggregate demand much larger than that.”
But that is my point. You don’t spend money on fixing potholes and shovel ready projects and unemployment extensions and call it a stimulus because it would increase aggregate demand. You’re only going to get a bang for the buck when the govt spends on things that only it can do very well. This is an application of micro, not macroeconomics.
You do if you're a Keynesian, because that's the whole point. Aggregate demand did increase; the economy did have positive growth. That's never been the debate really. The debate is whether the government's choice of how to spend the money it borrows to increase demand is better than the choices of millions of individual Americans.
As a side issue, I'm not sure how much I agree with your point about the government's involvement in things "only it can do well." The Internet really was not what it is now when it was a DARPA or even a predominantly DARPA-University project. It took commercial [private] participation to really create what most people now think of as The Internet. I think the same thing is also true of NASA: once the space industry had matured, it was probably a mistake for NASA to remain involved -- although I agree with you that NASA's initial participation was necessary and good. Public transportation, postal or parcel delivery, etc are all mature industries, and it's time now for the government to get out of them, or to take the same role that the military does vis-a-vis defense contractors.