It's increasingly looking like President Obama may be sunk by his own deficit.
Yes, the recession started under George W. Bush and voters will still blame him for unemployment and related woes. But rising interest rates and inflation are the coming fears and Americans will increasingly see Obama's big-spending ways as the cause.
Deficit spending has always been Americans' bete noir; the gospel of balanced budgets is deeply ingrained in our political and economic psyche. Through all the Keynesian experiments of the '60s and '70s, voters remained committed to a balanced budget. They worried as deficits rose in the Reagan years then calmed as the economy turned up.
But when the news turned bad under the first President George Bush, they blamed the deficit the issue was a major source of Ross Perot's appeal in the 1992 election. And when President Bill Clinton (and a Republican Congress) finally balanced the budget, the economy bloomed reinforcing public beliefs about the dangers of deficits.
Still in shock over the financial collapse, voters tolerated the massive government stimulus package in January. But now they're starting to turn on the deficit-makers.
In the latest Gallup Poll, Obama's favorability remains high (67 percent), as does his job-approval rating (61 percent). But only 55 percent approve of his handling of the economy, just 45 percent approve of his handling of federal spending and only 46 percent approve of his treatment of the budget deficit.
Meanwhile, the Rasmussen poll finds that the public now trusts Republicans over Democrats in managing the economy (for the first time in two years) by 42 percent to 36 percent.
There lies the president's vulnerability. As the consensus among economists and journalists grows that the deficit is pushing up interest rates and weakening the dollar, Obama's weakest link will come under strain. If, say, the falling dollar pushes up gasoline prices and rising interest rates kill off any revival in the construction industry, the deficit will cause a perfect economic storm for the president.
The United States has to borrow a net $3 trillion to $4 trillion over the next two years far more than the $1 trillion a year average of the last three years. Obama may well face a tough choice: Print more money (monetizing the debt), triggering a run on the dollar or let interest rates skyrocket, killing off the recovery.
Alternately, he could raise taxes to try to fund his programs (particularly his health-care proposals). But even tax hikes confined to the upper brackets will undermine his popularity and slow the economy.
Plus, voters will fear that the added government spending will just grow the deficit further. They won't believe Obama's claims that he can save by spending, worrying instead that he's just on another big spending spree.
Indeed, deficit fears rather than concerns about whether the program will work, or even opposition to the needed tax hikes may prove to be the telling argument against Obama's health-care plans.
The one thing Obama should do is the one thing he won't do: cut spending.
The public has begun to realize that the stimulus package is doing little to help the economy. Obama's answer is to ramp up spending but voters in the Rasmussen poll believe, 45-36, that he should cancel the rest of the stimulus outlays.
Stoked by ongoing bad economic news, the firm public conviction that new deficit spending will do more harm than good will increasingly wear on Obama's popularity and may bring him down.