By Bob Morgan, Jr.

The Obama Administration is in the midst of a full scale attempt to reshape the United States economy. Its proposals are very much a mixed bag.

This week, the beleaguered Treasury Secretary, Tim Geitner, finally announced his proposal to restructure bank debt. Basically, Mr. Geitner would insure purchasers of "toxic" assets against much of the potential losses associated with acquiring this assets while allowing them to keep much of the potential profit. The hope is to purge bank balance sheets of these assets, thus enabling the financial institutions to resume their normal lending functions.

It is debatable whether Mr. Geitner's plan is superior to other approaches, including allowing some institutions to fail, but it is at least a plausible approach to a very complex situation. The initial response of the financial markets was good, with a strong rally on Monday.

Unfortunately, the remainder of Mr. Obama's proposals are much more problematical.

Fresh off winning passage of a $787 billion stimulus bill, which will, according to the Congressional Budget Office (CBO), help balloon the budget deficit for the current fiscal year that began last October 1 to a breathtaking $1.8 trillion, the Administration has far reaching (and vastly expensive) plans for the years ahead.

The Obama budget for the coming years includes major new initiatives in such areas as energy (a "cap and trade" program aimed at lessening greenhouse gasses) and incremental expansion of a government health plan for the uninsured, among other new measures. The Administration is threatening to pass these new measures in the Senate as part of the budget reconciliation process, which would only require approval by bare majority of the senators, rather than the 60 votes normally required to move a measure through the Senate. These measures will raise some revenues but the funds are already allocated to other programs.

According to the CBO, the projected budget deficits of the Obama program would amount over a ten year period to $9.3 trillion, or an annual budget deficit of almost one trillion dollars a year. These amounts are more than four times the budget deficits under President George W. Bush, even taking into account the cost of the Iraq war and the 2008 bailout measure. And the deficits could be even higher since the administration says that its current health plan is only a "down payment" on a final program.

According to an Associated Press analysis, if the CBO budget projection is accurate, the deficit will never go below 4 percent of gross domestic product and will go up to a 5 percent level at the end of the next decade, a level that even President Obama's budget chief Peter Orszag agrees are not sustainable.

Some Democrats are beginning to become alarmed. North Dakota Senator Kent Conrad, chairman of the Senate Budget Committee, is seeking to reduce Mr. Obama's 9 percent hike in non-defense spending. Mr. Conrad is calling for a bipartisan commission to look at long term deficit and debt issues.

Mr. Obama is on a television blitz this week, having appeared on Jay Leno and 60 Minutes, as well as hosting a prime time news conference. But while the President is a charming and persuasive man, the issues raised by the current deficit are very serious ones, affecting our nation's long term economic health and indeed the economy that our children and grandchildren will inherit. Americans should look very closely before they leap at the President's proposals.