First News Conference: Obama Provides Clues

During his first news conference since the election on November 4, Barack Obama provided little substance on his plans, but he did provide a few clues as to the direction of his administration.

The one thing that stood out is that Obama will propose dozens of new government programs that will cost the taxpayers billions of dollars.

Most of these programs involve bailouts for the auto industry, for those who are on the brink of defaulting on their mortgages, and for new federally-created jobs programs that are intended to mirror those of FDR during the Great Depression.

When asked about his tax proposals to pay for this gargantuan increase in government spending, Obama ducked the issue but hinted that the top 5% wage earners would need to fund these proposals through huge tax increases.

And this is how the Obama plan mirrors that of Herbert Hoover.

The nation received more stunning, negative economic news today indicating that unemployment rose to its highest level since 1993, the auto industry is on the brink of bankruptcy, and the federal government will have to borrow record amounts of money, driving up the national debt.

Unless Obama raises taxes heavily on the top 5% of wage earners, he will be forced to pay for his proposals by borrowing even more money, plunging the nation to a record national debt. This is tantamount to deepening the nation's economic crisis in attempting to address its economic crisis.

Yet raising taxes to the levels necessary to pay for his proposals, particularly during a recession, will be even worse.

As we have stated repeatedly, raising taxes during hard economic times is a prescription for disaster, such as Herbert Hoover's massive tax increase in 1932, which catapulted the nation into an economic tailspin almost overnight.

Obama seemed to contradict himself by hinting that he would consider backing off of his plans for tax increases, which means he would need to drive up deficit spending, increasing the national debt by borrowing over a trillion dollars in order to pay for his new spending proposals.

Thus, Obama provided very little concrete information today other than a few clues concerning runaway government spending--the very thing the Democrats ran AGAINST during the campaign.

Several important matters to consider:

Americans overwhelmingly opposed bailouts during this economic crisis. If Obama wishes to bail out the auto industry, will Americans turn on him as thoroughly as they did George W. Bush and John McCain (forgetting that Obama supported the bailout of Wall Street as well)?

Does Obama truly grasp the fact that allowing the Bush tax cuts to expire in 2010 is an automatic tax increase on ALL Americans? The average American will owe over $1200 in new taxes once the Bush tax cuts are allowed to expire.

Will Americans support such a tax increase when they are already experiencing the pain of economic realities in the current environment, struggling to pay for their basic necessities?

Obama is certainly walking on thin ice in this environment. When you raise voter expectations to ridiculously high levels during a campaign and fail to deliver, the electorate's approval can turn to outright contempt in a hurry.