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It's an unprecedented public spending spree fuelled by fears of another Great Depression.

In Europe, countries are expected to give the green light to a European Commission plan calling for a fiscal stimulus package of €200-billion ($325-billion). China is earmarking 4 trillion yuan ($735-billion). The incoming Obama administration intends to launch the biggest U.S. public works program in 50 years at a cost of at least $500-billion (U.S.), and possibly double that.

Egged on by Keynesian economists convinced that only massive government intervention can rescue the global economy from the abyss, policy makers are ignoring the few voices that have risen to oppose a strategy that they warn is fraught with risk.

Public spending, they say, may not cure what ails individual economies and could saddle governments with far more headaches than they solve.

Even countries such as Canada, which has run a relatively tight fiscal ship and steered clear of some of the more severe economic woes of its trading partners, faces pressure to join the spending binge. But vocal critics of the stimulus onslaught say Canada's reluctance to spend is sound.

“It all sounds really good, and politically it sells,” said Peter Navarro, a professor of economics and public policy at the University of California at Irvine.

“But there's a really good reason why fiscal stimuli have not been the preferred choice for stimulating economies over the last three decades,” he said.

The key problems: financing the vast expenditures, determining the right size of the stimulus, and getting the timing right so it actually works. If the spending hits the economy while it's recovering, it could spark another bubble and stoke inflation. If the costs soar to ridiculous heights, governments could face skyrocketing debt charges for a generation.

The projects that have the best chance of working are those that are cost effective and add a significant number of jobs while the recession is still in full swing, said Dale Orr, chief economist at IHS Global Insight Canada.

Mr. Orr is completing a scorecard of the various Canadian spending and tax-cut options. He concludes the best bet is to simply move up small infrastructure projects that have already received the go-ahead and for which the financing has been allotted. Big projects of the kind planned by Mr. Obama will take too long to get off the drawing board and increase the risk of major mistakes.

“Accelerating small projects is by far the best,” Mr. Orr said. “It's the only [option] that has no warts on it.”

There is also the question of timing. If the consensus is right, the Canadian economy could be out of recession by the end of the first or second quarter of next year and growing at a decent clip again by 2010. Although some forecasts are bleaker, many analysts think the U.S. economy will also be on the upswing by then and that lower gasoline prices will do far more than any government program to stimulate growth.

“There is no chance that any fiscal stimulus in the budget of Jan. 27 is going to help Canada avoid a recession,” Mr. Orr said. “And by the time anything is working, we'll be at least two-thirds of the way through the negative growth. The justification for fiscal stimulus will surely be finished.”

Nevertheless, as Prof. Navarro acknowledges, “the mainstream Keynesians have all jumped on board.”

Indeed, the only point of difference between such prominent economists as Lawrence Summers, a key adviser to U.S. president-elect Barack Obama and Nobel laureates Joseph Stiglitz and Paul Krugman is how many billions should be committed right away.

Prof. Krugman dismisses concerns that public spending takes too long to provide the needed boost to demand that will get an ailing economy rolling again.

“It's very hard to see any quick economic recovery,” he writes in an updated version of his book, The Return of Depression Economics. Indeed, Prof. Krugman predicts the global economy could be stuck in a prolonged Japanese-style slump for years without strong measures.

Even The Economist magazine, long a bastion of conservatism, recently editorialized that “bold, unorthodox remedies are needed to jolt the world economy back to life.” Its solution for those countries that can manage it: massive fiscal stimulus.

Yet that is precisely what Japan sought to do in the 1990s. The government brought in no less than nine fiscal stimulus packages at a total cost of ¥130-trillion ($1.78-trillion Canadian at today's exchange rate).

“In light of the fact that during the 1990s the economy never recovered sustainable growth, the consensus view is that expansionary fiscal policies were by and large failures,” University of Tokyo economics professor Hiroshi Yoshikawa writes in his book Japan's Lost Decade.

Yet after new figures Tuesday showing the Japanese economy is sinking faster than expected, the government has come under renewed pressure to add to the stimulus package it announced in September.

Instead of cutting income taxes, Tokyo will hand out ¥2-trillion to households in cash. But critics say people may simply save the money.

That's precisely why most economists say tax cuts will not work this time around. They point to the Bush tax cuts, which did little to stimulate growth because only about 20 cents of every dollar went toward consumption.

“It's just a dumb thing to do,” Prof. Navarro said of further tax cuts. “The problem is that all people tend to do is either put the money under their mattress because they're freaked out about the economy or pay off their debt.”

Some economists support at least temporary cuts in sales taxes, because these would affect consumption directly. That's not an option in the United States, though, where several financially battered states are considering hiking sales taxes. There, Mr. Obama is placing all his bets on massive spending.

“Obama's a poker player,” Prof. Navarro said. “Here we've got a new president coming in who is basically going to bet the entire administration on a fiscal stimulus hand that is at best two jacks.”

With a report from Marcus Gee