Both arguments are wrong. If anything, ongoing economic problems are a sign that stimulus needs to be bolstered. Deficits are a serious issue, but the immediate need for stimulus trumps the longer-term need for deficit reduction. A self-reinforcing stretch of economic weakness would be far costlier than additional stimulus.

The Senate could take a step in the right direction by extending unemployment benefits without further delay. That is the single most effective way to boost consumption  which, in turn, preserves jobs  because it creates spending that would otherwise not occur.

Next, Congress and the administration should agree on ways to ease the dire financial condition of the states. Most important is continued aid for state Medicaid programs, which would ensure vital services, support jobs and free up money for other needs. Governors will begin to prepare their new budgets in early 2010, and those budgets will be in effect for a year, starting in July. So the states need to know soon what to expect from the federal government through mid-2011. As long as the states are suffering, any economic recovery efforts by the federal government are undermined.

Other measures being floated are less effective than unemployment benefits and aid to states. Many of the $250 checks to Social Security beneficiaries will not be spent quickly, because many recipients have no pressing need for the extra money. Proposals by some lawmakers to extend and expand the $8,000 tax credit for first-time homebuyers are even less well targeted. Since it was enacted in February, only an estimated 15 percent of buyers who claimed the credit needed the money to make the purchase. It’s not stimulus when you pay people to do something they would have done anyway. It’s waste.

To be highly effective as stimulus, cash aid must be targeted to needy populations. The housing market would be better served by a reinvigorated attempt to reduce foreclosures, including, at long last, reducing principal balances for the millions of people who owe more on their homes than they are worth.