Barack Obama has an enormously expansionary fiscal program to get demand moving but promises to halve the budget deficit by the end of his (first) term. This is a tricky promise to deliver on since he has also guaranteed not to tax US households earning less than $250,000US an extra cent. 3.8 million Americans earn more than $200,000 (the $250,000 point is not configured) and paid $522 billion in tax in 2006. The top marginal rate is 35% and Obama is proposing to raise it only a little to $39.6%. One can see that this would yield something less than about another $68 billion* which is more than a fair bit short of the $1.5 trillion deficit that many expect will prevail over the coming year.
To pull off the halving of the deficit the tax hikes would either need to be draconian (the WSJ argues that even 100% taxes on the top 2% of income earners would not do the trick) or otherwise taxes will have to be increased on people earning much lower incomes as well. Nor will unwinding the war in Iraq do the trick though it will help.
Don't forget either that Obama has some fairly large spending plans in health, alternative energy and infrastructure.
I don't think that the good President Obama's economic policies are internally consistent. I think this guy has the potential to be a great President but he should level with the American people. They will need to pay much higher taxes to fund the current expansionary moves.
* This is optimistic since many will experience income losses as a consequence of the recession.
Update: Paul Krugman takes a slightly more optimistic view. He notes that the budget will benefit from $645 billion (over the next decade?) and from the sale of emission quotas - a very promising sign. He also notes with approval $634 billion devoted to health reform.But Krugman also notes"And even if fundamental health care reform brings costs under control, I at least find it hard to see how the federal government can meet its long-term obligations without some tax increases on the middle class. Whatever politicians may say now, there’s probably a value-added tax in our future".