Obama in Dilemma

U.S. president Barack Obama has opined that in spite of high fiscal stimulus and and so many bailouts economy will worsen .He has warned that the unemployment rate can go to double digit before things can improve (http://www.cnbc.com/id/28693884) .According to past experience we have seen that employment data is a lagging indicator of economy as it bottoms out after the the economy has already bottomed out.The economy defends upon the sentiments of the business organisations.though there may be available business opportunity the business firms are not confident to invest as they are not sure about the demand .Towards the end of a recession the availability of credit or liquidity becomes a secondary issue ,the major concern is the the lack of confidence that leads to less investment and a period of consolidation.On the other hand demand is enhanced by natural process that will help in a sudden rise in scarcity and consequent rapid growth in subsequent period.That is why in spite of this monetary measures taken by Fed has not been able to generate any significant improvement in the economic system till date .In this context the best way to go is increase fiscal stimulus(Keynesian principle) instead of providing tax cuts.Tax cuts will help in providing money available in the hands of consumers and business organisations.But do they have the confidence to spend at this moment where uncertainty looms around the entire economy ,when they are not sure whether they are going to have their job or going to loose their business tomorrow ?But the government has no such issues.Surely they are the only one who can ensure spending by fiscal stimuli that can boost demand and recover the economy .In spite of that we have seen that Obama has gone for $300 billion tax breaks in his stimulus plan .Here lies the dilemma of political system in a democracy .The government is elected by general people and to satisfy their mind Obama has to play a balance between revival priority and popular satisfaction.Obama has to balance this game.That will determine how fast America and the world will heal their wounds and recover to riches.God bless Obama!!!