5 challenges for the new US government

What is presidency for the coming new US president? Honor, responsibility and one more item - a financial mess to clean up. Almost every indicator is pointing downwards. Opinion polls show that four-fifths of Americans feels that US has gone on the wrong track.

Google CEO Eric Schmidt said that whoever wins, he will entering the White House at a very difficult time. He listed a list of problems such as the education system cannot satisfy children needs, the health care system is overloaded, energy consumption exhausted a lot of wealth but they were not able to raise enough concern. The reliance on fossil fuels will not only cause a serious supply security issue, it will also cause big changes to the weather.

A long way to go, the US media recently listed 5 big immediate problems for the new US president to solve.

1) The formulation of widely accepted economic plan
Washington area Lynx Investment Advisory CEO Peter Tanous says that firstly, the new US president has to come out with an economic plan that can be widely accepted by the US people and start to revive the peoples' confidence towards the market. He says that this is a very obvious task.

2) Restore confidence and trust
Most market analysts think that Wall Street will show a slight rebound after the election. They hope that the emotional changes can bring some positive movements to the economy.

Swiss Re chief economist Kurt Karl says that the crux of the matter is trust and confidence. In actuality it does not need to pay too much a price for it. What the new US president needs to do is to work together with the finance minister and the FED chairman to ensure that we can tide over their current difficulties.

3) Adjusting the banking industry and real-estate market
The new US president has to face the root cause of the sub-prime crisis - the real-estate market. Although the FED has tried many times to encourage banks to lend money to one another by lowering interest rates, but the the measures are not quite successful. What we see now is another large scale outbreak of bank failures similar to the 80s deposit-loan crisis.

At the same time, house owners are also not spared. Every day there are thousands of people entering foreclosures.

Nomura Securities Chief Economist David Resler thinks that the challenge is to design a restructuring plan to improve the supervision on the financial system in order to prevent such disasters from happening again. This will be a long and cautious process. What worries him is that people may think that the new US president can come out with a plan quickly and thinks that taking a longer period of time for better preparation is a waste of time.

4) Challenge to increase tax income
Tax income is a rather eye-catching point in Obama's policies. He will not tax people whose income is below 250,000 USD per year, but will raise the taxing standards towards the rich Americans. Swiss Re chief economist Kurt Karl says that the new US president should seriously consider how to reduce businesses tax in order to stimulate economic growth. Now the problem lying infront of the new US president is how to reduce the tax burden without going under the safety level of the current big federal account deficit.

5) Patience
Having to take over a financial mess, there is nothing more important than patience as any hot headed decisions will cause catastrophic results. Some analysts say that to restore confidence and trust takes time, the US Congress and the new US president needs time to come out with clear and effective measures to resolve the economic problems.