Barack Obama's Stimulus Plan Creates 'Trillion Dollar Deficits for Years to Come'

Speaking to reporters yesterday in Washington, President-elect Barack Obama said that the federal government would have to "spend some money" in its effort to get the U.S. economy moving. And when Obama says spend, he means spend record sums of money. The president-elect spent the day on Monday lobbying members of Congress on his proposed economic stimulus plan, which Obama acknowledged will balloon the federal budget deficit to more than $1 trillion.

"We're already looking at a trillion-dollar budget deficit, or close to a trillion-dollar budget deficit, and that potentially we've got trillion dollar deficits for years to come, even with the economic recovery we are working on at this point."

But as bad as Barack Obama's numbers sound, they may be underreporting the potential size of the federal deficit by as much as 50 percent. Last year the federal budget deficit was about $450 billion. That figure does not include the $700 billion Wall Street bailout passed by Democrats in control of Congress, and supported by Obama, last September. That alone already brings the federal deficit to more than $1.1 trillion before any economic stimulus plan is enacted. Add in Obama's proposed $600-800 billion stimulus package, and the federal deficit will be approaching $2 trillion.

Obama may believe he is being candid in acknowledging the massive increases in the federal deficit that he will likely preside over. Or it may be a political expectations game. By setting a marker at $1 trillion, Obama will seek credit for deficits less than that figure, even if they are markedly higher than the deficit he inherited. When President Bush was calling the shots on economic policy, Democrats in Congress railed against the federal deficit as evidence of Republican mismanagement and fiscal irresponsibility. But now that they are in control of the purse strings, deficits have become a good thing. In effect, a measure of how hard Congress and the president are working to right the economy. With the Democrats' historic profligate spending ways, and Obama's reluctance during the campaign to name anything he might cut from the federal budget, Americans may soon be longing for the days of the comparatively tiny billion-dollar deficits of the Bush Administration.