As the new U.S. president steps into office, they face critical economic challenges that will shape the nation’s future. Election promises often sound bold but rarely come with clear plans for tackling the real issues. For meaningful progress, the incoming administration must address these five economic priorities.

1. Fostering Sustainable Growth and Preparing for the Future

The new president must prioritize growth while modernizing the economy for long-term prosperity. This means unlocking potential in traditional sectors like manufacturing and services while also supporting innovation in key areas: artificial intelligence, green energy, healthcare, and food security. Reviewing programs like the Inflation Reduction Act and the CHIPS Act could help ensure they meet evolving needs. Encouraging innovation with flexible regulations will be essential, balancing the benefits of emerging technology with the need to retain jobs and enhance skills.

2. Addressing Budget Deficits and National Debt

With unemployment low, now is the time to tackle budget deficits and reduce the nation’s debt, currently exceeding 120% of GDP. This period of economic stability should be used to build resilience in public finances. Steps should include tax reform to remove growth-limiting exemptions, rationalize spending, and create funds for future investments. The goal is to make public finances flexible and sustainable to handle unexpected challenges.

3. Avoiding Overuse of Economic Tools

Each candidate has favoured economic strategies that must be used wisely. For one, avoiding excessive regulation and industrial policy is crucial; for another, limiting tariffs and tax cuts is key. Striking the right balance between necessary intervention and economic freedom will help the economy remain competitive without unintended consequences.

4. Strengthening Global Economic Leadership

Reestablishing the U.S. as a global economic leader is vital. This doesn’t mean adopting a “globalist” mindset; it’s about mitigating global risks that directly impact national security and economic stability. U.S. leadership in addressing shared threats helps reduce vulnerabilities to economic and financial shocks.

5. Clear and Transparent Communication

Effective communication can make or break economic policies. Lessons learned from past administrations emphasize the need for clarity. Missteps, like the “transitory” inflation narrative of 2021, show how poor communication can erode trust and worsen challenges. Setting a clear, realistic economic message is essential to avoid market disruptions and build public confidence in new initiatives.

Election promises are common but turning them into a practical economic strategy is essential to keeping the U.S. at the forefront of global growth and stability.

Source: (FT.com)