That's today's topic in the blogosphere, starting with Bruce Bartlett, and then Paul Krugman (and here) and Megan McArdle. The economy hasn't exactly gone well but a priori that could support either the view that the stimulus won't much help, or the view that we needed (and still need) a bigger stimulus.
I'll restate a few of my core points on this topic:
1. If we're not in a liquidity trap, monetary policy is a better way to stimulate aggregate demand.
2. If we are in a liquidity trap, the stimulative effects of fiscal policy will die out pretty quickly.
3. I have never defended "the Treasury view."'
4. The worst case scenario, which requires that you put your balance sheet in somewhat better order, remains relevant. I am suspicious when I hear "efficient markets" defenses of current fiscal policy ("Interest rates remain manageable," etc.) from the same people who for years criticized those arguments as applied to banks or for that matter homes.
5. Some temporary, short-run stimulus was indeed called for, consisting mostly of aid to state and local governments.
6. The employment benefits of fiscal policy are mostly temporary and will require a "redo" in two years' time or so, unless we are willing to lose those jobs again or move to "permanent stimulus," which I do not recommend. We are postponing required labor market adjustments, not solving the labor market problems.
7. There were better ways to spend most of that money. The assumption was that the American public would be so happy with the stimulus that they would be clamoring for more and more government programs. That does not appear to be the case.
One new point, based on recent history: We've just seen what special interest groups have done to legislation on health care reform and climate change and neither has even reached the Senate yet. Round one of the stimulus represented the high water mark of the influence of the technocrats in the Obama administration. What do you think round two of the stimulus would look like?
I'll also note this: even if you think the pro-stimulus forces are correct, they are losing the rhetorical battle rapidly. American voters do not in fact have the patience for a lot of good ideas.