Essentials Of "Economic Stimulus"

My basic economic/political belief is that the government is and will never be as efficient a means to "creating wealth" as private enterprise.  I would even go so far as to say that "creating wealth" and "creating jobs" isn't even in the purview of what the government is here for.  It's here to provide services that can't or shouldn't be privatized (military and police being two good example), and to reasonably ensure that people "play by the rules" that are required for a healthy, functioning society.

That said, I"m skeptical at best, of the ability of government to "rescue" our economy, especially by bailing out capital markets which have gotten where they are primarily by behaving badly.

I'm no economist though, and as such, I appreciated the WSJ's nice summary (via an opinion piece) of some of these dynamics here:

A dollar doled out in jobless benefits may well be spent by the worker who receives it. That $1 of spending will count as economic activity and add to GDP.

But that same dollar can't be conjured out of thin air. The government has to take that dollar away from someone else -- either in higher taxes, or by issuing new debt in the form of a bond. The person who is taxed or buys the bond will have $1 less to spend. If the beneficiary of that $1 spends it on something less productive than the taxed American or the lender would have, then the net impact on growth will be negative.