Column in the WSJ today by two prominent economists examined the Keynesian idea of gov't spending filling the gap in private demand in regards to the stimulus. What they found was government grants to states and localities merely substituted for local borrowing. IOW, there was no stimulus achieved at all. Aggregate demand was the same as before. The Obama stimulus was, again, proof that Keynesianism is simply wrong.
John F. Cogan and John B. Taylor: The Obama Stimulus Impact? Zero - WSJ.com
John F. Cogan and John B. Taylor: The Obama Stimulus Impact? Zero - WSJ.com