Washington: January 7, 2009 – News Analysis by Dr. Raj Baldev, Cosmo Theorist from India - With each day passing, President-elect Barack Obama feels the heat of economic crises, more he thinks, more he sinks, one trillion-dollar deficit has made him more mature to think of imposing tighter fiscal discipline on the government, a big challenge rather the biggest challenge of the present time.

Mr. Obama has only one option to be tough and serious to analyze the real deficits, more than anticipated gap is reported to him by his experts. He wants to differentiate between the actual deficits going on for several years and the present one with a planning to reduce them in the following years, which does not look to be an easy affair.

The present stimulus plan of around $800 billion in new expenditures and tax cuts over next two years is a serious affair for Mr. Obama to deal with; he wants cooperation from the American people to support his policies and that needs some stringent measures on spending   wisely and economically along with his policy of keeping effective controls on the federal budget.

Mr. Obama is well aware of the huge problems being faced by financial markets and long-term dangers attached to them, he, therefore, wants to take such steps that may restrict the deficit  to deal with efficiently, and in this regard, he would not like to hesitate to take strict actions. 

Mr. Obama is well aware that large deficits, as exist today, may force the government to borrow more money, weighing down future generations with big financial loads forcing the  country to bank on the help of foreign governments and the investment by the big tycoons.

Mr. Obama further feels that the problem is even more acute now because credit markets, which in recent months have made it much harder and more expensive for businesses and individuals to borrow, could be further strained by financing a huge government deficit.

On Wednesday, Mr. Obama plans to name a chief performance officer with the task of finding government efficiencies. He has chosen Nancy Killefer, who is director of McKinsey & Company, a management consulting firm, and was an assistant secretary of the Treasury in the Clinton administration. The Congressional Budget Office will also release its latest budget estimates, providing the first official predictions of the shortfalls tied to the economic slowdown and the fallen financial markets.

Mr. Obama has made the economy virtually the sole public focus of his first full week in Washington since winning the election. He called on Tuesday for the creation of an economic recovery oversight board that would include outside advisers to monitor spending — and find abuses — of the economic stimulus plan. He also said earmarks for lawmakers’ special projects would be banned from the bill.

It is hoped that with the changing policies by Mr. Obama, the improvement is sure to come and it is being felt by experts.

“When the American people spoke last November, they were demanding change — change in policies that helped deliver the worst economic crisis that we’ve see since the Great Depression,” Mr. Obama told reporters at his transition offices. He added, “They were demanding that we restore a sense of responsibility and prudence to how we run our government.”

But Republicans and some fiscally conservative Democrats have expressed concern that the need for a substantial economic stimulus plan could sweep away for years any serious effort to bring government spending into line with its revenues, as per NYT.