An unnamed US official was later quoted as saying Mr Obama intended to cut the deficit in half by the end of his first term.
This would be done by scaling back on the war in Iraq, increasing taxes on those earning more than $250,000 a year and making government more efficient, the official said.
Obama has inherited a $1.3 trillion deficit. So this would mean reducing Government spending by $.65t total over 4 years. However, Obama has also just signed into law a roughly $.79t stimulus package. So the deficit will increase, meaning he has to cut Government spending by $1.44t.
According to my research (aka google) the US Government spends roughly 29.6% of US GDP. US GDP in 2008 was just over $14t (Excel), so the Government spends just over $4t.
So to cut the deficit like the official says in half Obama would have to cut Government spending by over 35%, or increase taxes by the same, or a combination of the two. The former would make him more right-wing than Reagan.
He also won't make any steps toward doing this in the next few years (other than perhaps by making US income tax more progressive), obviously his rhetoric at the moment is all about stimulus and increasing deficit to prop up the economy. Because of this I would be mightily surprised if Obama actually plans to pull this off. More likely it is the official running his mouth off, or, and I consider this unlikely, a politician making an ambitious promise they are unlikely to fulfill.
Any corrections to my maths would be welcomed.
