Ezra Klein has a very smart post today about the 2009 stimulus, in mostly defense of Barack Obama's team: Klein makes the reasonable point that at the time the policy was developed, the size of the bill they asked for was at least within range of what seemed reasonable; it was only as winter and spring of '09 wore on that it became clear that the economy was in much worse shape than most people realized. I think he's right about that. Klein asks what the correct "what-if?" is on the stimulus, and there I think it's important to remember that Bill Clinton was defeated -- completely -- on his stimulus bill in 1993. In other words, the people in the White House had to know that one of the serious possibilities was a $0 stimulus bill.
The other part of it is that Obama's legislative team was entirely reasonable in assuming that the "stimulus bill" wouldn't be the end of new stimulus spending during the 111th Congress. And, after all, it wasn't; there were small things along the way, and then a whopping big stimulus bill (that is, the tax bill) during the lame-duck session. One can certainly criticize the Obama White House, Nancy Pelosi, and Harry Reid for how they handled the add-on portions of stimulus...the lame-duck bill didn't exactly show up in time to help the Democrats in the 2010 elections, did it?
In retrospect, the obvious move would have been to follow ACA, which passed in March 2010, with a deal that looked an awful lot like what the Democrats agreed to after the election, but would have taken effect in June. Would Republicans have gone for it? Hard to say; they had an incentive to avoid making the president look good, but they also sure like those Bush-era income tax rates. Or perhaps the Democrats should have pushed through a tax deal -- at that point, leaving out the upper-income cuts -- when they had 60 votes in the Senate in fall 2009, if necessary taking a short-term hit in the polls in order to get more money into the economy. The point is that the key mistake wasn't in February and March 2009; if there was an important mistake (and I think there's an excellent argument that the WH did err) it was in the follow-up, not in the original stimulus bill.