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Obama has been touted as the next FDR with his stimulus package to mimic that of the New Deal following the Great Depression. Though Obama desires to stimulate the economy in much the same way as the late Roosevelt, he’s got some huge roadblocks in his way.

1.He’s no longer the king of public opinion
When Obama entered the White House he did so with a commanding win over John McCain but his victory may have been better attributed to a dislike for the Republican party than to Obama’s popularity. Roosevelt entered the White House with huge support from the public on the idea that Hoover’s policies kicked off the Depression. Perhaps the president-elect didn’t take enough stabs at Bushonomics, or lack thereof.

2.Limited ways to grow government
Obama may be courting Republicans on Capitol Hill with his new stimulus, he’s having a tough time drawing fiscal conservatives to his plan of expanding the Federal Budget. When FDR entered office government spending accounted for just 7% of the GDP, today that figure is more like 20%. FDR was able to increase government revenue by raising and creating new sources of tax revenue, Obama is going to have to cut tax incomes to get this stimulus through Congress.

3. Entitlements fueled the New Deal
Using his public support as a stepping stone, FDR was able to convince Americans that entitlement programs (most namely social security) would help guarantee the future well-being of American personal finance. Little did he know or expect, the social security system grew to have no balance but instead holds trillions of US Treasuries. The initial social security system was designed as an additional tax on Americans as it would begin to pay only at age 62. Believe it or not this was actually one year longer than the average American was expected to live. Today Americans are enjoying a life expectancy of 78 years, 16 years longer than when the social security program was first drafted.

4. The National Debt
Following the New Deal the national debt as a percentage of GDP was just around 50%. Obama will enter office with a Debt to GDP ratio of 55% and have to deal with fiscal responsibility issues resulting from additional public spending. The new stimulus package will push the GDP as a percentage of Debt ratio to 62%. If you include the debt owed to FICA, Social Security and other programs the national debt becomes $10.6 Trillion with a GDP of $13.8 Trillion. That’s a 76% Debt to GDP ratio. Ouch.

5. Obama Is Taking Big Gambles on Alt Energy
Obama is placing big bets on alternative energy programs. Unfortunately alternative energy has yet to be economical even at $147 oil. Spending billions of dollars over the next 10 years may put the US in the lead, but what are the chances that the same technology we use today will be the technology that we use in ten years? And what about the efficiency, isn’t that what makes alternative energy so great? Obama’s taking a speculative bet here and putting less money in things like infrastructure which FDR used to raise employment figures. The only way to make alternative energy catch on would be new carbon taxes which haven’t yet been tossed out by the Obama administration.

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