First, Mr Obama is serious about comprehensive healthcare reform and hopes to make high-income households pay for it. This would be a bold project at any time, let alone when the public purse must contend with the demands of stimulus spending and financial stabilisation. Allowing for new bank bail-out money, the current year's deficit is expected to be $1,750bn, more than 12 per cent of GDP. Undaunted, Mr Obama wants to set aside more than $600bn in tax increases and spending cuts over 10 years as a down payment on healthcare reform.

Second, revenues from a cap-and-trade system of carbon mitigation make their debut. The proceeds would be spent partly on making the tax credits in the fiscal stimulus, strongly tilted towards low- income households, permanent.

The US healthcare system is inequitable and inefficient: the need for reform is plain. Even so one must wonder at both the timing and the method of financing. Mr Obama's plan to raise taxes on households earning more than $250,000 comes on top of the reversal of the Bush tax cuts after 2010. The savings of these households have already been destroyed by plunging share and house prices. Yet another income tax increase, with intimations of more to come – since the down payment covers less than half of the likely cost of healthcare reform – is not calculated to spur confidence.