An Open Letter to the Next President, Part 5
The Need for More Revenue
Giving Everybody Some of What They Want… But Not Everything They Want
Be Radical, but Phase It in Slowly
A Few Final Thoughts
Abu Dhabi, Raleigh, and Home
The Need for More Revenue
Giving Everybody Some of What They Want… But Not Everything They Want
Be Radical, but Phase It in Slowly
A Few Final Thoughts
Abu Dhabi, Raleigh, and Home
When the next president of the United States walks into the Oval Office on Saturday, January 22, after the heady experience of Inauguration Day followed by numerous balls, he or she will be confronted with significant economic challenges. This is the fifth and I hope final installment in a series of letters I’ve written to the next president on those challenges. The first three letters in the series dealt mostly with the realities of the economic landscape beyond the United States. The situations that most of our significant trade partners face dictate that the next US president will have much less room to operate than the candidates have suggested that they’d like to have.
Europe will be struggling not to fall apart. The budgets of most European countries are going to be even more constrained than the US budget will be. China will be lucky to escape a hard landing within the next four years. The same can be said for many other countries that are dependent on global trade in an era when trade is actually slowing.
My basic thesis is this: Without significant changes in tax and incentive structures, the US will almost assuredly enter a recession within the next few years. Then, if we lose tax revenues only to the extent we did in the last couple of recessions, we’ll be saddled with a deficit of over $1.3 trillion, and the deficit won’t fall below $1 trillion as far out as the eye can see, according to the nonpartisan Congressional Budget Office (CBO).
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