I've been having discussions with some associates about what it means when a measured short-run multiplier is positive yet less than one. It is occasionally suggested that a multiplier less than one means that fiscal policy is necessarily a bad idea, but I don't see it that way.
Keep in mind there is no a priori argument that the government purchases "don't count," even though sometimes they don't produce much value ex post. And the borrowed dollar isn't "taken out" of the economy in a meaningful way. It can come from abroad or it can accelerate velocity, at least potentially.
Let's say the multiplier is 1.0. That typically means a dollar is spent on a road (or whatever), which is in the plus one column. There is some crowding out of private investment but not usually one hundred percent. Let's say that's minus 30 cents. The spending on the road, and road workers, has some positive second-order effects. Let's say those are plus thirty cents per dollar.
In that particular case, the multiplier ends up as equal to one and that is net, all things considered. The spending still would yield a short-term positive for gdp if the multiplier were 0.5.
The case against fiscal policy should examine long-term budgetary costs, possible confidence factors, implementation lags, political economy problems, difficulties in targeting unemployed resources, and also the (underrated) notion that sometimes fiscal policy postpones problems into the medium run rather than solving them through jump-starting a recovery. But it is difficult to deny that fiscal policy brings some economic benefits in the short run, or can brake an economic decline, even if the measured multiplier is less than one or for that matter well under one.
As an aside, I do not prefer to emphasize the notion of "investment crowding out" for analyzing fiscal policy. The notion is a coherent one, but frequently analysts, and audiences, end up confusing nominal flows of finance with real resource opportunity costs. I instead prefer to ask how effectively the fiscal policy is targeting real unemployed resources and to deemphasize the financial angle, at least for the first-order analysis.