In choosing to address a joint session of Congress on the economy, Barack Obama has once again stirred expectations. He must rise to the occasion with brave proposals or risk confirming criticism from left and right alike that he is weak and beside the point. The US president lost the economic initiative this year by seeming to acknowledge that fiscal policy was constrained, if not entirely exhausted. Now he must regain it.

The worsening US economy calls for strong measures. Job creation has stalled, and demand is insufficient to revive it. A cycle of failing confidence and weakening activity has begun. The country is grappling with an unfamiliar problem: long-term unemployment that erodes skills and drives disengagement from the labour force. A persistent if not permanent loss of productive capacity is in prospect.

It cannot be stated too strongly: US fiscal policy is not exhausted (nor is monetary policy, for that matter). The appetite for US public debt is undimmed: the government can borrow for next to nothing. The longer-term fiscal problem is real, and must be confronted with immediate and credible commitments to cut spending and raise taxes in future – but this does not preclude further stimulus now.