The Congressional Budget Office has released its estimate of the economic effects of the American Recovery and Reinvestment Act, (aka the stimulus plan).  CBO director Douglas Elmendorf points out that any efforts to provide helpful estimates are hamstrung by the fact that "large fiscal stimulus is rarely attempted."  The CBO's estimates show some short run benefits, but little effect in the long run.

The above chart shows a small negative effect in the long run, as the CBO estimates "legislation will reduce output slightly in the long run."  Elmendorf explains in his report:

The principal channel for that effect, which would also arise from other proposals to provide short-term economic stimulus by increasing government spending or reducing revenues, is that the law will result in an increase in government debt. To the extent that people hold their wealth as government bonds rather than in a form that can be used to finance private investment, the increased debt will tend to reduce the stock of productive private capital. In economic parlance, the debt will "crowd out" private investment. (Crowding out is unlikely to occur in the short run under current conditions, because most firms are lowering investment in response to reduced demand, which stimulus can offset in part.) CBO's basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollar's worth of private domestic capital (with the remainder of the rise in debt offset by increases in private saving and inflows of foreign capital). Because of uncertainty about the degree of crowding out, however, CBO has incorporated both more and less crowding out into its range of estimates of the long-run effects of the stimulus legislation.

Read the full report here.