DETROIT (WWJ) – With the U.S. staring down the barrel of a default deadline this week, economist Bob McHugh of Mainline Investors says an agreement on the budget may be too little, too late.

McHugh says technical analysis of the stock market indicates what he calls a looming “economic ice age” unless government policy makers institute some major changes.

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“What we need to do is grow the economic pie in this country. We don’t need to fight about this existing pie and who’s gonna get their share of this smaller pie,” McHugh said, in an interview with WWJ Newsradio 950’s Jayne Bower.

“We need to take massive, extraordinary steps, because it’s late in the ballgame to make sure that our economic pie grows and that this economy heats up fast,” he said.

McHugh said the best way to do that is to get money into the hands of households and small businesses — and a lot of it.

“So I recommend a rebate of two years of income taxes with a minimum payment of $50,000 per household from the U.S. treasury … and that would stimulate the economy and get us going,” he said.

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The problem is, McHugh said, it’s doubtful those in Washington would have the political will to take such a drastic step.

“You know, they can’t even agree on coming up with a budget, so, it doesn’t look like that’s gonna happen,” he said.

McHugh says the The Emergency Economic Stabilization Act of 2008 — better known as the Wall Street bailout— simply didn’t do much to stimulate the U.S. economy.

“It hasn’t worked; it hasn’t filtered down to the family, to the household, to the small business,” he said.

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“If they had taken that $5 trillion in the form of this kind of tax rebate and handed it to the consumer, household, small business — we would have had a trickle up economic growth that hasn’t been seen before,” said McHugh, “and it’s possible this pattern could have been blown up and gone away, and we wouldn’t be talking about an economic ice age right now.”