WASHINGTON (Reuters) - Bill Gates, the world’s richest man, said on Monday the U.S. economy could take years to recover from recession and predicted taxes will have to rise to bring the federal budget into balance.
Speaking on ABC’s Good Morning America, Gates also warned against too much government intervention and urged President Barack Obama to focus policy on long-term issues such as education to combat the effects of the worst recession since the Great Depression.
“When you have a financial crisis like that, it’s years of digging out,” said Gates, who co-founded Microsoft Corp and remains its chairman.
“The budget’s very, very out of balance. And even as the economy comes back, without changes in tax and entitlement policies, it won’t get back into balance. And at some point, financial markets will look at that and it will cause problems,” he added.
“Taxes are going to have to go up and entitlements are going to have to be moderated.”
Gates spoke two days ahead of Obama’s State of the Union speech, which is expected to focus extensively on economic issues including the need for job creation.
“We’re having a slow recovery and everybody’s frustrated by the pace of the recovery. But I don’t think the government could change and magically make it speed up a lot,” he said.
“If you try to do too much, it can distort things. The government’s role is more of a long term role, investing in education.”
Gates also said the United States needs its leaders to level with the American people about the long-term challenges the country faces and the sacrifices needed to overcome them.
“We need leadership for these long-term trade-offs and I‘m hoping that won’t cut back a few key areas like aid to poor countries. But there’s going to be cutbacks,” he said.
“We’re seeing this at the state level right now, and so far it’s not being handled very responsibly.”
Reporting by David Morgan, editing by Vicki Allen