Panic is not a good state of mind for making decisions, but the grim economic news of recent months means itís about the only one Washington policymakers can achieve.

Alarmed by fears the economy may be going from recession to depression, the incoming administration and its Democratic allies in Congress, not to mention some Republicans, are determined to pass a big fiscal stimulus package in the hope of reversing the slide.

What they neglect to consider is no one knows how effective it would be. ... Past attempts at stimulating the economy through spending and tax changes have had mixed results.

So the real question is: When the effects of fiscal stimulus are not clear, what should be done?

One school says the risk of inaction now is so grave any halfway plausible preventive has to be tried.

Given the inclinations of President Barack Obama, that approach is likely to prevail over the view that we find more persuasive that what is most needed now is patience for the steps taken by the Federal Reserve to pay off.

A stimulus will require massive federal borrowing, and there has been little discussion about the economic impact of that borrowing. ...

As with spending increases, the focus should be on tax cuts that hold some hope of stimulating short-run growth while promising more certain benefits in the long run.

With that approach, policymakers and, equally important, taxpayers will be less likely to look back with regret.

ó Chicago Tribune