Abstract: Keynesian macroeconomic theory is not concerned with the political dimension of aggregate demand management,nor does it take into consideration of the allocation efficiency on the microeconomic level.Such kind of theory when applied to reality might well lead to results that are overall harmful.As the product of such theory,China's four thousand trillion economic stimulate package would result in rent-seeking,corruption and entrenched bureaucratic power politically,and distorted resource allocation economically.While some measures have been taken by central government to pre-stall these distortions,their effectiveness in reality is still in doubt judging from both past experiences and relevant theory.