Republicans embraced the last stimulus plan, and they might very well embrace another. But their long-held position has been that the best way to give the economy a boost is through tax cuts at the corporate and individual level. They also express concerns that some money funneled to the states would be spent inefficiently, for example on programs that would generate few jobs.

The Democratic proposal would provide tax relief in some form for families, the goal being to step up their spending, as the rebates were intended to do earlier this year. In addition, unemployment insurance benefits would be extended beyond 39 weeks and the food stamp program would expand. Both would channel money to people who would probably spend every penny to meet their needs. But the biggest chunk, perhaps as much as $150 billion, would go to states and cities to sustain their everyday spending.

Image We have to prop up consumption, said Representative Barney Frank, chairman of the House Financial Services Committee. Credit... Bill Greene/The Boston Globe, via Associated Press

The rationale for another stimulus package, particularly one that helps the states and cities, is compelling for many economists. The nearly $1 trillion that Congress and the Federal Reserve are making available to the financial system is intended to make credit more available. That props up the supply side.

But to make the economy grow, or stop contracting, demand is required. Consumers, businesses and governments need confidence to spend their own incomes or tap credit from a repaired financial system. In the case of states and cities whose revenue is shrinking, bigger federal subsidies would ease the need to cut so many jobs and services to balance their budgets.

“That is the whole rationale for giving money to the states and cities,” said Alan S. Blinder, a Princeton University economist who served in the Clinton administration and also as vice chairman of the Federal Reserve Board. “Deciding not to cut spending is the functional equivalent of spending more. Either one leads to more spending than you otherwise would have.”

State and local spending accounts for 12 percent of nation’s economic activity. There is a widespread contraction in their spending now because of lower revenue and laws that require them to balance their budgets.