Dammit. I go without internet for two days and the thread blows up =P
Ok, the reason why I believe that in some cases the stimulus was healthy was because it pushed companies to the edge of bankruptcy without letting them actually topple. This forced them to slim down and actually become strong companies again, the best example of this is GM.
Ideally a recession should trim the fat off of companies, strong companies should weather it without government help (as Ford did) but with government help weaker companies can come out strong.
There is no question that without government help companies such as GM would have failed - would that have left the US economy in a better state than it is now? While an argument could be made that it would allow new stronger companies to come through I personally don't believe it would have done much other than left more people unemployed and the US with fewer exports.
In some cases the stimulus wasn't as such healthy as necessary. Fannie Mae and Freddie Mac are possibly the only examples of this. The god-awful overblown companies that are too big to fail. If those two went under at that time there is simply no denying that the US economy would be in the shit even more at the moment.
