I believe Callahan is broadly correct. The key point he is making in his criticism is that Rothbard ignores the inter-relationship between R and V (in his example), which would be akin to ignoring the interaction between C and I in the Keynesian multiplier story. That interaction between C and I, whereby an initial increase in I translates into an increase in Y which in turn leads to an increase in C in accordance with the consumption function is indeed vital to the multiplier story.
I also agree with you that we can ignore the malice in Callahan’s argument regarding Rothbard’s motivations!
GP Manish
