Whether the stimulus is needed or not depends on your economic views: An Austrian theorist would say no (although he'd include the tax cuts found within the stimulus) and a Keynesian would say it is. The Austrian school works on the basis of a buisness cycle, and so to sort out the economy long term would require a huge correction without government inteference, so in their view to "fix" the economy things will have to stay this bad, if not worse. for the next decade or so.
Keynesians on the other hand believe you should intefere to stimulate the market, rather than letting it correct itself. The question is, does it actually help or even hinder? It's hard to say... there are still great debates raging around whether the New Deal helped or hindered ending the great depression, same with Japan over the last decade.
What also should be considered is that no Government at the moment is Keynsian. If they were they'd have cut spending during the boom periods of the 80's to late 90's and 2003-7. They didn't... they spent even more. As the basis of that economic theory is spending money in recession you saved during the boom to ease the damage, there's now no money to spend to do it.
Which leads to the US (and now the UK) simply creating more money out of midair... which leads to the issue of mass inflation that gets everyone upset.
When it comes down to it, I like to think I have a fairly solid grip on what's going on, but I'm far from the worlds biggest expert. So I bow down to the people who are.
Peter Schiff is the US's leading Austrian theorist, and on the whole I agree with him on a lot of things. On the other hand his Euro Pacific Capital Inc has lost up to 70% (by some reports) of his clients money because he got a lot... and I mean a lot... of big predictions very wrong.
Warren Buffet is the world's greatest investor, and while he's suffered pretty badly over this period (notably with GE stocks) he's done better than most other traditional investors over the period. He says the stimulus is needed, and on that ground I'm tempted to believe him.
It's a complex situation, balancing long term and short term considerations, and anyone who can give a simple "this is how we make it perfect without hurting anyone" answer isn't being genuine.