So, what should we have spent the money on?

I don’t know if the numbers are accurate then or now but, it’s interesting that if they are close, all of the money being spent to mitigate the recession is offset by what would have been saved had we not been after non-existent “weapons of mass destruction” and not been so anal about rooting out bin Laden:

According to a Congressional Budget Office (CBO) report published in October 2007, the U.S. wars in Iraq and Afghanistan could cost taxpayers a total of $2.4 trillion dollars by 2017 when counting the huge interest costs because combat is being financed with borrowed money. The CBO estimated that of the $2.4 trillion long-term price tag for the war, about $1.9 trillion of that would be spent on Iraq, or $6,300 per U.S. citizen.

Stiglitz, former chief economist of the World Bank and winner of the Nobel Prize in Economicw, has stated the total costs of the Iraq War on the US economy will be three trillion dollars in a moderate scenario, and possibly more in the most recent published study, published in March 2008. Stiglitz has stated: "The figure we arrive at is more than $3 trillion. Our calculations are based on conservative assumptions...Needless to say, this number represents the cost only to the United States. It does not reflect the enormous cost to the rest of the world, or to Iraq."

^{From a Wikipedia article.}