If Keynes was part of the ploicy debate, he would be saying that the economy needs more than stimulus, it needs investment. To the extent that the private sector will not invest enough to have near full employment, then government should do the investment. Government spending to supplement aggregate demand has some political value, but the economic value is temporary. Modern policy analysis and government accounting does not clearly differentiate between spending by government and investment.

Obama's 2009 stimulus is still boosting jobs

The $825 billion economic stimulus law signed by President Obama in February 2009 is having a positive impact on the economy about 30 months later, according to the non-partisan Congressional Budget Office.

In its latest quarterly report, the agency said the law's combination of aid to states and localities, public works projects, tax cuts and other spending increased the number of people with jobs by 1 million to 2.9 million from April to June.

It said the law lowered the unemployment rate for that quarter by 0.5 to 1.6 percentage points -- meaning the rate could have been above 10% without the law's stimulative provisions. It said the law boosted economic growth in that quarter by 0.8% to 2.5%.

The CBO's analyses have done little to temper the partisan debate that has raged over the stimulus law almost since it was signed.

Before entering the White House, Obama's economic advisers predicted a package they wanted to be even larger would hold unemployment below 8%, and it hasn't come close. Thirty months after the law was passed, it remains at 9.1%.

Republicans, led by House Speaker John Boehner and Senate Minority Leader Mitch McConnell, have consistently argued that the law did more harm than good -- boosting the nation's $14.6 trillion debt by nearly $1 trillion without benefiting workers or companies.

The CBO report says otherwise. Though the benefits of the law have begun to dissipate 2 1/2 years later, the agency clearly says things would have been worse without it.

Since the spending was temporary, the law's biggest impact was felt in 2010. At various points last year, the CBO estimated economic growth was boosted by 1.8% to 4.6%, employment boosted by 1.4 million to 3.6 milllion jobs, and unemployment lessened by 0.8 to 2 percentage points.

'The effects of (the stimulus law) on output peaked in the first half of 2010 and have since diminished,' said CBO Director Douglas Elmendorf.