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HONG KONG — Tuesday will be an historic day when Barack Obama is sworn in as the 44th U.S. president. He is not only the first African-American president to hold the highest office, but his swearing in is also a triumph of the Great American Dream.

In what other country would the offspring of a black foreigner and a white American from a relatively poor background be able to run for the highest office, let alone beat the war hero candidate of the established party in power? It would have been unthinkable even in America a generation ago.

Sen. Obama had promised that, come January, things would be different. “Yes, we can,” his supporters chanted optimistically. But already the chill reality of economic and political winter is beginning to freeze some of the dreams.

Even before he reaches the Oval is catching a barrage of sniping from some within his own party that his economic measures — although not yet announced — do not go far enough, and from others that they will impose too many costs. From near demigod, he is already being brought down to earth.

This is a pity because America and the world needs the kind of leader that Obama aspired to be, who would take a fresh look at America and its place in the world, who would neither be bogged down by the trivia of petty domestic politicking nor ambitiously make grandiose boasts about the strength of American muscle. Indeed, the crises affecting America are far more serious than most commentators, let alone politicians, have been prepared to admit.

Just take the hydra-headed economic crisis. Less than a year ago both President George W. Bush and Treasury Secretary Henry Paulson had pooh- poohed the idea that America would suffer recession or financial crisis.

Since then the so-called subprime mortgage crisis blossomed and led leading U.S. and Western banks to write off billions of dollars, which helped to trigger a meltdown of the whole financial system, which led to hundreds of billions of dollars being lost on the stock markets, which caused a sharp and sudden contraction in credit, which cost companies profits, workers jobs and homeowners their homes, and which led to plummeting economic growth.

All of which led to a government bailout, first of the supposedly impregnable financial giants and then of other pillars of U.S. Inc., followed by a general attempt to boost the American economy.

This in turn led to unprecedented budget deficits, which raised general indebtedness, which led to a fall in the U.S. dollar, which led to foreign creditors being increasingly fed up with losing billions of dollars by holding U.S. dollar instruments, and threatening to bail out of the dollar.

America is still the world’s economic superpower, but its strength has been dangerously undermined. Recent American prosperity was a flashy mansion built on the flimsiest of foundations that disregarded sound household management, let alone good economic principles. The economy is in such a parlous state that Obama’s chief of staff Rahm Emanuel described domestic priorities this way: “Our number one goal, jobs; our number two goal, jobs; our number three goal, jobs.”

The U.S. budget deficit is about to soar to more than $1.2 trillion, and that’s without fully counting the spending boost that Obama proposes. Members of both parties of Congress are beginning to worry about the wisdom of offering a profusion of new tax breaks and spending measures.

The trouble is that without them, the economy will falter, jobs will go and the United States will be in a bigger mess. Respected economists, such as former International Monetary Fund chief economist professor Kenneth Rogoff, calculate that proposals of a once-for-all boost of $760 billion to $800 billion (or about 5.4 percent of GDP) — which is already beginning to scare Congress — will not be enough. The boost will have to be in the trillion dollar-plus range and will have to be repeated for the next one or more years if U.S. unemployment is not to rise.

Ordinary Americans also spend too much and too much of it on imported goods. To get the economy back into sustainable equilibrium, Americans will have to sell their output abroad, and sooner rather than later they will have to rediscover the saving habit.

It is all too tempting to depict Obama as enchained and enslaved like a Gulliver held down by Lilliputian congressmen and their constituents. Obama cannot afford that: He must look at some Brobdingnag-sized problems gathering offshore. Some of them relate to the very domestic economic problems the U.S. faces. Not only is the budget deficit huge, but so is the current account deficit, and America’s creditors are, not surprisingly, restive.

Beijing is talking about delivering its invoices in yuan, just as oil exporters have toyed with switching to euros, to avoid piling up any more devaluing dollars. Obama should be making urgent plans to go to China, the European Union and Japan. Instead, depressingly, his only announced plans are to go to Canada, whose government cannot be certain whether it will be in power much longer.

The economic mess is only part of the terrible inheritance of the Bush years. Sooner rather than later Obama will have to face the reality that American military might is ineffective in safeguarding the peace and safety of the world. The Bush presidency saw U.S. military boots on the ground all over the world, while the navy patrolled the seas, spy satellites surveyed everything that moved, and the nuclear command was on standby. It is not working, as Hillary Clinton recognized in her senate confirmation hearings where she talked of the virtues of “smart power.”

Large leading questions that Obama cannot afford to postpone because of domestic issues include, besides the global economy, the environment, climate change, even foreign relations with the Middle East, Afghanistan, Iran, Cuba, Venezuela, not to speak of Europe, China, India and Japan. All these are areas where problems cannot be solved by American military might.

Obama should call Chinese President Hu Jintao and India’s Manmohan Singh now. The trouble is he won’t know whom to call in Tokyo.

Kevin Rafferty is editor in chief of PlainWords Media.

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