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That spending is just part of the demand for goods and services and it was sucked from a productive part of our economy which would probably have spent the money in a more effecient manner.
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There are lots of areas where government spending is more efficient than private enterprise. The pharmaceutical industry, which I work in, is filled with examples of this. The easiest to understand is vaccines which private industry generally doesn't touch due to the lack of profits despite enormous benefits to society as a whole. Many people forget that the polio is still the leading cause of disabilities in the the US. The first effective vaccine wasn't invented by big pharma but in the University of Pittsburgh. To say the polio vaccine was a waste of government money is to express gross ignorance on the extreme amounts of damage it did to the world population and even the effect it has on our current GDP many decades after the virus has been eradicated from our country. It doesn't stop there. An in some industries private companies actually fight hard to destroy efficient technology. The great American streetcar scandal is one such instance. History has frequently shown private industry's primary motivator isn't efficiency or even high quality products. Way too many scandals, shelving and neglect of superior products/services have shown that private industry is about profit maximization and many companies will do whatever it takes to get there.
Another example, a frequent tactic among pharma is to alter a naturally occurring drug so that it can be patented. It does not matter if we are reducing the potency of the drug or creating something that causes serious side effects. What matters is that we get that patent and we don't care if people die because the drug is less effective than it's natural byproduct.
You can keep preaching your blind ideology and spouting incorrect historical facts. Or you can read history and realize that both big government and pure capitalism have big problems.
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Did these comnpanies who produced shoddy products prosper? I think not and that is the beauty of free market capitalism.
You should open your eyes a little on the polio vaccine which is suspected of causing cancer and evidence suggests he may not have even been much help in stopping polio:
Polio is virtually nonexistent in the United States today. However, according to Dr. Robert Mendelsohn, medical investigator and pediatrician, there is no credible scientific evidence that the vaccine caused polio to disappear [50]. From 1923 to 1953, before the Salk killed-virus vaccine was introduced, the polio death rate in the United States and England had already declined on its own by 47 percent and 55 percent, respectively (Figure 4) [51]. Statis-tics show a similar decline in other European countries as well [51]. And when the vaccine did become available, many European countries questioned its effectiveness and refused to systematically inoculate their citizens. Yet, polio epidemics also ended in these countries [50].
Full paper and footnotes here:
http://www.thinktwice.com/Polio.pdf
Your critique of capitalism fails to look at the higher living standards and quality of life it brought to the US and more recently India and China.