Five Economic Challenges Facing the Next President

Revitalizing the nation's economy will be the top priority for whomever is elected president on Tuesday.

CNBC.com Barack Obama & John McCain

But talking about an economic recovery and making one happen are two hugely different things. And whether it's Barack Obama or John McCain who becomes the nation's 44th president, he'll face an unenviable task.

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"Whoever it is is just going to have egg on their faces two years from now. There are just so many problems and there's no money," says Kathy Boyle, president of Chapin Hill Advisors in New York. "I wouldn't want this job if you paid me $3 trillion a year."

Yet financial experts say there are five basic steps the new president can take to assure the public that something is being done.

1. Get Everyone on Board

"The first thing to do will be to get an economic plan that everybody agrees on in place and start restoring confidence to the market," says Peter J. Tanous, president of Lynx Investment Advisory in Washington, D.C., and co-author of "The End of Prosperity," a book that examines the extent to which higher taxes will decimate the economy. "That's clearly job one."

Lack of a consistent plan of attack has hindered Washington from stemming the damage caused to the economy from the crumbling financial infrastructure. Free-market Republicans have clashed with interventionist Democrats in a perpetual conflict that has culminated in conflicting regulations and monetary policy. The result has been easier access to capital but reluctance by banks to use that money to lend.

That has to stop, says Tanous, an Obama supporter who rejects the notion that the Illinois senator's economic plans would bring contemporary capitalism to its knees.

"We won't have the end of free markets. What we will have is the end of laissez-faire capitalism as we knew it," he says. "We will have new regulations to make sure it never gets out of hand again as it did this time."

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Still, Tanous adds that Obama is the first Democrat he'll support for president since John F. Kennedy, and warns that an Obama presidency would have to include significant participation from the Republican side.

"If I'm right in thinking that the (Obama) mandate is going to be huge, the periods of time when Democrats especially have controlled all three branches of government have not been happy," he points out. "But one has to hope that a President Obama will manage it well and not leave things to the far left wing of the party."

2. Create a New Mindset

Most market analysts see Wall Street getting at least a modest post-election bounce, and there's hope that a change in mood also can affect the economy in a broader sense.

To do so, the president will have to show he means business right from the start.

Video: Bank of America's Mickey Levy talks about challenges facing the next president.

"The issues are trust and confidence, which doesn't necessarily cost the country much," says Kurt Karl, chief economist at Swiss Re. "The president has to take charge, along with the secretary of the Treasury, as well as working with the chairman of the Fed and the regulatory authorities, to make sure we get through this."

The candidates have spent time discussing the role of the US in the world and the new president will need to address that issue aggressively, with coordinated, global policy moves critical, Karl says.

"It's a global problem and with our global connections, working with our major partners, will be a benefit and increase confidence," he says. "That kind of cooperation and effective action and taking charge is part of the solution, part of the confidence-trust solution, which is less about money and more about changing the psychology."

Tanous predicts that could be the one area where the new president might have an advantage by sheer strength of the changing of the guard.

"I think that there will be a burst of enthusiasm than for no other reason than this interminable process is over," he says.

CONTINUED : Fix Housing? Yes. Raise Taxes? No!

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