Reducing budget deficits will be in vogue again, but it will take a while. Cutting government spending and/or increasing taxes will be politically difficult until we begin to recover from this financial disaster. How long that will take is anyone’s guess. The most optimistic scenario is a “mild” recession that lasts a year; the more pessimistic scenario is deep recession and a painful (decade-long) recovery.

Whichever the case, the next President will have little room to advance his economic agenda. As long as the U.S. must borrow to meet its expenses, Deloitte Tax Analyst Clint Stretch says any kind of economic stimulus is counter productive, “We try to pump money into the economy through tax provisions, but because we haven't kept a good fiscal house, we have to turn around and claw it right back.” Of course, the presidential candidates aren’t focused on that or the bigger looming financial issues, like the increasing costs of Social Security and Medicare programs.

Former CBO Director Rudy Penner says one way whoever becomes President might be able to meet his campaign promises would be to combine those priorities with real reforms that slow down the growth of those entitlement programs to reach a political compromise.