As voters cast their ballots across the nation, Mohamed El-Erian wrote for the Financial Times about economic challenges facing the next president.

First, the incoming president must find a way to maintain growth while repositioning the economy to take advantage of the drivers of tomorrow’s prosperity. This involves removing the brakes on existing economic engines, such as manufacturing and services, and promoting future sources of growth by supporting the smart dissemination of innovations in artificial intelligence, life sciences, green energy, defence, healthcare and food security. Both the Inflation Reduction Act and the Chips Act should be evaluated for course corrections to fulfil their restructuring aims. This needs to be accompanied by more dynamic regulatory approaches to foster innovation and a better understanding of the risk of the balance between job losses and the upside of skills enhancement.

The second challenge is to come to grips with high budget deficits and rapidly rising debt. It was once unthinkable that the US would have almost three years with an unemployment rate around or well below 4 per cent and yet run budget deficits of 6-8 per cent of GDP. To paraphrase John F Kennedy, this is the time of “sunshine” when governments should be “fixing the roof” and not creating additional holes. Yet, whether it is the current deficit at over 6 per cent of GDP or government debt at 120 per cent of GDP, both are on an ultimately unsustainable path.

It’s not just about the size of the imbalances. The incoming administration needs to build much greater operational flexibility for public finances that lack sufficient resilience and agility. This requires reforms to the tax system, including removing distortive exemptions and anti-growth biases; rationalising spending; and liberating more resources for investment and precautionary buffers.

Third, both candidates need to resist the excessive use of the economic tools they favour. For Harris, this means avoiding overregulation and blunt industrial policy. For Trump, it means containing the use of tariffs and tax cuts.