There certainly isn't any doubt that the Obama administration intends to spend their way out of the economic crisis.In fact,Larry Summers,who is an Obama staffer,stated exactly that,that their focus right now is on spending.
The guessing game now begins on how to pay for it.Raising taxes on the rich is a gimme.I would expect to see niche taxes rise across the board as they don't affect everyone.If you have a vice like alcohol,cigarettes,use silly things like gas,emit carbon dioxide,etc.,watch out.The global warmers love to focus on these for their funding.
Those are really small potatoes though.Can't touch SS or Medicare/Medicaid for the political suicide aspect.Obama is certain to dabble in it to show his concern,but what tweaking he will accomplish is unknown.
Can't touch the Federal debt interest as that's counter-productive to increased spending.The only thing left on the table is the Dems favorite,defense.Look for it to be slashed with a "comprehensive review of National Security needs" to be followed by cutting all sorts of high tech programs.
Other than taxing the rich and cutting defense,Obama doesn't have much available.Maybe Geithner will get creative with the Fed and do some fancy number crunching to address the debt interest.If the debt continues to expand at it's current projections,the wall will be hit soon.There really is a ceiling on how high we can exceed our debt to GDP ratio before the Treasury security lovers will even quit buying.At that point the Fed will have to start buying it's own debt to keep the spending machine alive.Projections are that 2009 is the tipping point year for SS surpluses.Even though 2018 is the projection year for surpluses to stop entirely,the slowdown starts this year.Medicare is on a faster slope and will surpass SS in the next decade in payouts.This is when the smoke and mirrors of today will stop.The clock is ticking.More to come...