As economists and media catch on to Obama’s “fuzzy math”, Obama campaign draws up plans to “lower expectations”

Terrific round up of data on the Obama plan to flush the US economy completely down the toilet. With an illustrious group of 537 (so far) bipartisan economists throwing their support to McCain and his tax plan, the word is eeking out to some of the MSM that all is not well in Obama-topia.

Economists for McCain is not affiliated, nor donors to the McCain campaign… despite what their name implies. What their name *does* imply is that after evaluation of both plans, 375 of them have put their names to condemning the Obama tax proposals.

Their official statement on Obama’s tax plan warn of a high risk of throwing the economy into a deep recession.

It was exactly such misguided tax hikes and protectionism, enacted when the U.S. economy was weak in the early 1930s, that greatly increased the severity of the Great Depression.

Also of great concern is Obama’s increasingly protectionist stance on foreign trade agreements such as NAFTA, GATT and the pending CAFTA.

Exports from the United States to other countries create jobs for Americans. Imports make goods available to Americans at lower prices and are a particular benefit to families and individuals with low incomes. International trade is also a powerful source of strength in a weak economy. In the second quarter of this year, for example, increased international trade did far more to stimulate the U.S. economy than the federal government’s “stimulus” package.

They chastise Obama and the DNCs entertainment of yet another stimulus package which would, of course, do nothing to grow the economy. From the increased taxes on oil to the dividends, labor income, investments, income and payroll, there was little these economists could praise.

We are equally concerned with his proposals to increase tax rates on labor income and investment. His dividend and capital gains tax increases would reduce investment and cut into the savings of millions of Americans. His proposals to increase income and payroll tax rates would discourage the formation and expansion of small businesses and reduce employment and take-home pay, as would his mandates on firms to provide expensive health insurance.

After hearing such economic criticism of his proposals, Barack Obama has apparently suggested to some people that he might postpone his tax increases, perhaps to 2010. But it is a mistake to think that postponing such tax increases would prevent their harmful effect on the economy today. The prospect of such tax rate increases in 2010 is already a drag on the economy. Businesses considering whether to hire workers today and expand their operations have time horizons longer than a year or two, so the prospect of higher taxes starting in 2009 or 2010 reduces hiring and investment in 2008.

In sum, Barack Obama’s economic proposals are wrong for the American economy. They defy both economic reason and economic experience.

You know the world might *finally* be waking up to adding two and two when CBS starts questioning Obama’s “fuzzy math”.

Obama has already proposed a new stimulus package of $188 billion over two years. His tax cuts will cost $85 billion a year. His “army of new teachers”: $18 billion; Renewable energy: $15 billion. CBS News and various independent experts estimate Obama’s total first year spending could exceed $280 billion.

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“I’ve offered spending cuts above and beyond their cost,” he has said.

The fact is the savings Obama has identified do not cover his spending. According to a CBS News estimate, he’s around $90 billion short. The Obama campaign disputes this, saying everything including the stimulus is paid for over 10 years. But other analysts say – even presuming Obama saves money in Iraq and chops the federal budget as promised – he falls short.

Remember my previous post on the Obama tax plan? Like where is he going to find that $4.3 trillion he’s proposing thru 2019? Even CBSs Wyatt Andrews is having a hard time finding some economists not on the Obama gravy train to justify the numbers.

Fact: The tax cuts he promises, which are mostly refundable tax credits (code for cash back), will cost $60 billion just in year one, according the National Taxpayers Union, though the Obama campaign’s own estimates in July put that figure at $130 billion.

Fact: His new promise to give businesses a $3,000 tax credit for each new job created will cost $40 billion. But economists say this credit is far more likely to benefit companies already planning to expand and will likely not be enough to help companies create new jobs or forestall layoffs.

Fact: Obama’s claim he will lower health care premiums by $2,500 is: 1.) guesswork, which is 2.) based on health care savings that might, in a perfect world, happen over 10 years – a fact Obama neatly glosses over.

Then, of course, comes the math challenged Obama faithful who believe if we just leave Iraq, all the cash will flow into the coffers for a democratic socialist Euro-America.

Fact: Obama, when referring to savings he can make by leaving Iraq ($90 billion, according to Congressional Budget Office estimates), has spent these savings several times over, across several different promises depending on the crowd he’s addressing.

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If he closes every loophole as promised, saves every dime from Iraq, raises taxes on the rich and trims the federal budget as he’s promised to do “line by line,” he still doesn’t pay for his list. If he’s elected, the first fact hitting his desk will be the figure projecting how much less of a budget he has to work with – thanks to the recession. He gave us a very compelling vision with his ad buy tonight. What he did not give us was any hint of the cold reality he’s facing or a sense of how he might prioritize his promises if voters trust him with the White House.

Whether Obama is so inept as to not function well with so many zeros, or he’s merely misrepresenting… no, make that lying thru his teeth… about his tax plan, there is a slow tide of realization that something ain’t right in Obama and Michelle’s financial “camelot”.

So it comes as no surprise that Obama is drawing up plans to lower expectations for his presumed presidency.

Democratic presidential nominee Barack Obamas senior advisers have drawn up plans to lower expectations for his presidency if he wins next weeks election, amid concerns that many of his supporters are harbouring unrealistic hopes of what he can achieve.

The sudden financial crisis and the prospect of a deep and painful recession have increased the urgency inside the Obama team to bring people down to earth, after a campaign in which his soaring rhetoric and promises of hope and change are now confronted with the reality of a stricken economy.

The Times quoted a senior adviser as saying that the first few weeks of the transition, immediately after the election, were critical, so theres not a vast mood swing from exhilaration and euphoria to despair.

We have a word for this in the financial world…. it’s called “buyer remorse”. Frankly, it’s better to kill the deal altogether than suffer from that malady. Especially in the case of a POTUS, determined to steer the US into a socialist economy not dissimilar from the failures in Europe.