[frognibble]

Your analysis of the situation is incomplete because it does not consider the source of the resources used in the government stimulus. The resources need to come from someplace in economy. For the stimulus to be a net positive, the government's allocation of resources must be more efficient than where the resources were taken from.

[cma]

http://www.cepr.net/index.php/blogs/beat-the-press/how-large...

[frognibble]

The resources used in the stimulus come from someplace in the economy. The resources do not magically appear out of thin air when the Fed buys government debt.

[cma]

With an idled worker population it is obvious where the bulk of the resources can come from.

[frognibble]

It is not obvious that the bulk of the resources come from the idled workers. Resources are needed to pay the workers. Resources are needed to buy the steel, concreate and other materials used in the projects.

[cma]

>It is not obvious that the bulk of the resources come from the idled workers. Resources are needed to pay the workers.

The resources are the idled workers. Yes, commodity-type resources are used as well, but there is for example a lot of idled equipment out there as well.