The stimulus package isn't the best idea, but right now it's the only one. Aggregate Demand= Investment+Consumption+Government Spending+Net Exports. Due to the credit crisis, Investment has fallen sharply. Additionally, thanks to the subprime mortgage crisis, money for consumption that used to come from home equity is now nonexistent, and consumer confidence being at an all time low means that people will save more, money which used to then get lent out by banks for investment but is now being held tightly by banks desperate to improve their liquidity. Therefore, the only real avenue left to the government is to bolster Aggregate Demand through spending. The Great Depression would have been a lot less severe had Herbert Hoover implemented aggressive government spending programs immediately. Just my $0.02.