Barack Obama is not yet in office but is already working hard to persuade US taxpayers and the Congress that an enormous fiscal stimulus is needed, and quickly. This week the Congressional Budget Office predicted that the US budget deficit would soar to $1,200bn this year even if no new measures are introduced – and this forecast is itself a deliberate underestimate, because it allows for some promised tax increases that almost certainly will not happen. This is not enough, says the president-elect: a further stimulus of at least $800bn over two years is needed, he says.

Mr Obama is right, both about the scale of the problem and the urgency of getting the new plan in place. The recession is still deepening, and unless further steps are taken the prospects for incomes and employment are grim. The US is a creditworthy borrower. At present, indeed, investors seeking a safe haven worldwide are avid buyers of its obligations. Fiscal policy can, and should, respond boldly to fill much of the gap in aggregate demand that a contracting private economy will create. If anything, the numbers Mr Obama is suggesting – bold by other governments’ standards – are still too small.