"Dear Mr. President . . ."

Whoever sits in the Oval Office next January will be deluged with advice about the economy in general, and the mounting deficit in particular. At their September meeting the members of the TIME Board of Economists offered these recommendations:

Alan Greenspan, a New York City consultant, to Reagan:

The critical issue you face is getting the deficit down and doing it in a manner credible to the financial community. That will help defuse inflationary expectations linked to the deficit. What we need is a deficit reduction of $40 billion to $50 billion a year, and the way to do that is first to look at ways to cut spending. Then you can raise taxes as a last resort.

Charles Schultze of the Brookings Institution to Mondale:

I would urge you to be quick and be bold. A large reduction in the deficit is better than a smaller one, and it will not threaten the recovery. Regarding spending cuts, be tough from the start. It will not be hard politically to correct later any errors you might make.

Schultze to Reagan: Appoint a panel of distinguished economists to assess the consequences of unchecked budget deficits. Use your post-election honeymoon to get agreement on the outlines of what to do. I am sure that you will then be convinced that a tax increase is really necessary.

Martin Feldstein of Harvard to Reagan:

Your key priority should be to find a strategy for gradual elimination of the deficit. Credibility is crucial. If the financial markets can be convinced that you will virtually eliminate the deficit, real interest rates will come down and the dollar will become more competitive overseas. But your program should not sacrifice the tax reforms you have achieved. Tax changes should be fair and simple and not add to the disincentives created by the tax system.

Rimmer de Vries of Morgan Guaranty Trust to Reagan:

The time has come for the U.S. to take on more leadership in Europe and Latin America. Instead of being told how to run our economy by foreigners, we ought to be more aggressive in making suggestions. For example, we should dismantle our trade barriers in exchange for the dismantling of barriers overseas on agriculture and services. The U.S. should import less; it should export more.

M.l.T.'s Lester Thurow to Mondale:

You must eliminate the deficit at one step with a truly large tax increase, perhaps on gasoline, and a value-added tax. If this is not done, you will not truly be President but the caretaker of the Reagan deficit. You will be its prisoner. Your only hope is to strike now and blame the large tax increases on the profligate ways of your predecessor.

Thurow to Reagan: Many of your economic successes have been due to good luck rather than wise policies. Be prepared to face up to the trade deficit, now running at a $130 billion annual rate, which could become a crisis.

Walter Heller of the University of Minnesota to Mondale:

Your plan to cut the deficit by two-thirds was courageous and responsible. But it should be backed by a longer-term commitment to tax reform along the lines of the Bradley-Gephardt modified flat tax already proposed in Congress.

Heller to Reagan: To tax or not to tax? That is the question. There is only one answer: Tax! Your charge toward a balanced-budget amendment is a political cop-out unless you also fight for a realistic program of budget cuts and tax increases.

Brookings' Alice Rivlin to both Reagan and Mondale: I urge you to take quick and bold action on the deficit. It is actually one of the easier problems you face. I would then urge you to shift to harder problems like Third World development and getting an arms-control agreement with the Soviets. These issues are much more important than the deficit.