I have discovered Rosy Scenario's secret identity. Her true name is Brad DeLong. Go read the whole post. Brad's logic is that right now it is obscenely cheap to borrow money and thus the potential long term budgetary costs are negligible (especially when you consider the potentially high social costs of structural long term unemployment). Brad looks at the borrowing as a one time cost and seems to assume no difficulties rolling over the debt. That is more what worries me.
That said, I largely agree that we should have taken advantage of the low borrowing rates and cheap labor available during a recession and that the first stimulus could have and should have been crafted better (50% of it was wasted on poorly constructed tax cuts). I would like to see such borrowing paired with future tax increases and spending cuts as early as 2 years out.
If the Bush administration had done any work whatsoever on planning for high speed rail, upgrading our grid, or implementing more mass transit (hell, just fixing what ought to have been fixed such as bridges) we would be in a much better situation right now. A lot of those unemployed construction workers could have been employed in a beneficial manner (at a discount). The taxpayer would reap the benefit of an upgraded infrastructure (with extremely low financing costs, likely lower if paired with a credible deficit reduction plan).