“Assuming that the presidential season clarifies these choices, the campaign’s winner will face another challenge next year: how to deal with a Congress that has failed to handle even its most basic economic functions. Given the outlook for both a shaky global economy and higher financial volatility, the new administration will need to find a way to get Congress to implement measures in four specific areas, some of which already command bipartisan support.
The first covers long-overdue structural reforms. Guided by the administration, Congress needs to overhaul a tax system littered with anti-growth provisions, invest more in infrastructure, expand labor-market retraining and modernize our education system. The lack of such reforms, and the insecurity generated, is one main reason the private sector has held back from spending the enormous cash reserves on its balance sheets; encouraging that money to flow into productive activities, rather than share buybacks, would boost the economy.
America also needs a more responsive fiscal policy. This means, above all, redirecting resources that essentially subsidize the better-off segments of society, including the excessively low taxation of carried interest and other budgetary measures to help reduce the economic drag that inequality creates through reduced consumer demand.” …………………..
“While I.M.F. reform might seem arcane, it could be vital to averting another global crisis — without changes, the fund’s credibility will continue to be questioned, especially in the eyes of emerging economies, undermining global policy cooperation and increasing the risk of currency wars and other damaging coordination failures.”
Source: When Will the Candidates Start Talking About the Economy? – The New York Times
