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How the F--- Did "Marxists" Come to Decide That Fiscal Policy Was Ineffective?

Sheri Berman on the Weimar Republic and the SPD in 1931:

… At the labor movement's "crisis" congress in April, advocates of the WTB plan emphasized the increasing desperation of the masses and pointed out that both the Nazis and the Communists were trumpeting work-creation programs.... In the run-up to the elections that July, it became clear that... the SPD's program "contained no thoughts capable of stimulating the imagination.... One could not find in it ways out of the [problem of] mass unemployment."... [T]he elections were a disaster.... The SPD agreed to discuss the WTB plan yet again.... Hilferding declared that such proposals called into question:

the very foundations of our program... Marx's theory of labor value. Our program rests on the conviction that labor, and labor alone, creates value.... Depressions result from the anarchy of the capitalist system. Either they come to an end or they must lead to the collapse of this system. If [Woytinsky and others] think they can mitigate a depression by public works, they are merely showing that they are not Marxists.

Woytinsky responded to this charge with the following argument:

The flood of unemployment is rising, the people are at the end of their patience. The workers, holding us responsible for their misery, are deserting the party to join the Communists and the Nazis. We are losing ground. There is no time to waste. Something must be done before it is too late. Our plan has nothing to do with any particular value theory. Any party can execute it. And it will be executed. The only question is whether we take the initiative or leave it to our enemies.

...[A]ll but one of the SPD representatives of the meeting sided with Hilferding over Woytinsky...

Particularly since you have the guru:

Karl Marx: Economic Manuscripts: Theories of Surplus-Value, Chapter 17:

[T]he ancient mode of production… used a large part of the surplus-product for unproductive expenditure on art, religious works and public works… [not the] development of the material productive forces—division of labour, machinery, the application of the powers of nature and science to private production…. It is the unconditional development of the productive forces and therefore mass production on the basis of a mass of producers who are confined within the bounds of the necessary means of subsistence on the one hand and, on the other, the barrier set up by the capitalists’ profit, which [forms] the basis of modern over-production [and capitalistic economic crises]...

(Note: "unproductive" is here a technical term--not a value judgment.)

If applying expenditure to art, religious works, and public works could keep an ancient economy from crisis and depression, why couldn't the same keep a modern economy from crisis and depression?

It is a mystery...