In a few hours, President Obama may make the defining speech of his Presidency. His State of the Union needs to contain more than the grand oratory of which he is the acknowledged master; he also needs to outline a substantial economic strategy for the next three-to-seven years of his Administration.

Last year’s “stimulus package” showed no such strategy. It was simply a huge spending bill made up of Congressmen’s pet projects. The American people are now sceptical about its benefits.

It is true that there have been benefits. It is practically impossible to spend money without having an economic effect. There are certainly individual businesses and jobs that owe their existences to government contracts.

However, it is notoriously unwise to base general assumptions on particular cases.

Maverick Congressman Ron Paul is one of those free thinkers, like John Redwood in the UK and Daniel Hannan in the European Parliament, who, without necessarily having all the answers, deserve credit for asking the right questions. He asks if the stimulus money would have been better spent on self-sustaining businesses, allocated by the markets rather than by politicians.

Every entrepreneur in the world knows the answer to that one!

Even the advocates of the last stimulus are effectively admitting that it has not lived up to their highest hopes, because they are proposing a new measure – another stimulus, of course.

The hints from the White House are that the President’s thinking is moving closer to Congressman Paul’s than to his old friends’ in the pro-stimulus camp. It seems the President might propose effective measures to curb government spending, reducing the deficit rather than increasing the stimulus.

If so, it may be an important sign that he is willing to tolerate greater economic discomfort in the short term in order to secure stronger growth in the longer term. That would be politically risky, but it would be the right strategy for America – and the world – and it would deserve our support.