Is bigger government an engine of capitalist growth?

Its hard to understand why Obama would spend so much of his political capital on a pork-laden stimulus package when he could gain so much by throwing Pelosi under the proverbial bus. But it may indicate a much larger agenda, which is already on display in the left-leaning press:

Obama is the Democrats' Great Communicator, our Ronald Reagan. It's fitting that his highest priority will be reversing the tax and spending priorities Reagan enshrined as a new American compact almost 30 years ago, and reviving the notion of government as an engine of capitalist growth -- not merely the safety net provider, but the catalyst for organizing our public resources around what makes the economy strong. We've been arguing at the margins during these last two years of pain: Government should regulate more, or less. Tax rates should be higher, or lower. But there's a dangerous civic illiteracy in our country about what the larger role of government in a modern economy is, or should be, and I don't think Obama will ultimately prevail if he doesn't start to take it on.

I hope I am wrong about this:

"They're using the cover of the fiscal crisis to dramatically expand the reach and scope of government," said Luke Froeb, the William C. and Margaret W. Oehmig associate professor in entrepreneurship and free enterprise at Vanderbilt University. "It is shameful the debt legacy we are leaving on our kids. It is shameful."