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.

I was asked six questions (mostly about Create Your Own Economy, but not all), here is one of them:

FE: What has most surprised you about the current economic downturn?

Mr Cowen: That
it happened with such severity.  As an economist I grew up reading and
thinking about two formative events.  The first was the crash of the
real estate bubble in the late 1980s, preceded by the stock market
crash in 1987.  The second was the Third World debt crisis of the early
and mid-1980s.  Both were bad, but for the United States neither were
like the last two years.  I’ve never been a believer in any of the
extreme forms of the efficient markets hypothesis, but those events
made me overly complacent about how badly crashes and excess leverage
can turn out.  In the early 1980s I expected widespread insolvency for
major U.S. banks and when they muddled through I ended up overrating
their ability to do the same again.

His first column is on behavioral economics and mortgages; excerpt:

Some critics contend that behavioral economists have neglected the
obvious fact that bureaucrats make errors, too. But this misses the
point. After all, wouldn’t you prefer to have a qualified, albeit
human, technician inspect your aircraft’s engines rather than do it
yourself?

The owners of ski resorts hire experts who have
previously skied the runs, under various conditions, to decide which
trails should be designated for advanced skiers. These experts know
more than a newcomer to the mountain. Bureaucrats are human, too, but
they can also hire experts and conduct research.

Nir Jaimovich and Henry Siu write:

We investigate the consequences of demographic change for business cycle analysis. We find that changes in the age composition of the labor force account for a significant fraction of the variation in business cycle volatility observed in the U.S. and other G7 economies. During the postwar period, these countries
experienced dramatic demographic change, although details regarding
timing and nature differ from place to place. Using panel-data methods, we exploit this variation to show that the age composition of the workforce has a large and
statistically significant effect on cyclical volatility. We conclude by
relating these findings to the recent decline in U.S. business cycle
volatility. Through simple quantitative accounting exercises, we find
that demographic change accounts for approximately one-fifth to
one-third of this moderation.

That's in the June 2009 American Economic Review (somewhat different version).  One ungated earlier version is here.  A later NBER version is here.  The very useful PowerPoints are here.