Something odd is going on here in the US. As you know, the country suffers from the excessive borrowing and lending, on sub-prime mortgage, the bubble went bust and seemingly dragged the economy down to recession.
I feel a kind of dejavu. Apparently the US does not learn the very same lesson from the series of Asia and Latin America crisis. And even more surprising, US administration took different set of policies than what they had suggested to the rest of the world on how to overcome recession, that is, tighter monetary and fiscal policies.
Instead they go for relaxing policies and launch an aggressive economic stimulus plan. In this package, the Fed cut of key interest rate (monetary) and tax rebate plan (fiscal).
Whether you agree with this Keynesian counter-cyclical policy or not is a matter of not only empirical, but also difference in school of thought. Some argue that economy needs a bail out (from government) to get out from the mess, the others prefer to let the (market) economy pays for its mistake.
The debate aside, apart from the positive response from stock market index, we do not know yet the impact of such stimulus scheme on output. Nevertheless as Krugman, Hausmann, and Landsburg point out, the tax rebate plan is likely doomed to failure by design. The bulk of rebate would go to relatively financially OK household, so it would not be spent, hence little multiplier effect (Krugman); or it is less likely to put American into work, and enhance domestic investment (Hausmann and Landsburg).
If US economy were truly resilient, dynamic, and strong --as many of us would like to believe--, I think it's time for them to be tough in this difficult time, the way we, East Asians, stood up and recovered, following their very own prescription.