Billionaire investor Warren Buffett declared that the United States can avoid recession as long as Europe manages to solve its debt crisis.
The US economy will continue to grow “unless events in Europe develop in some way that spills over here big-time,” the chief executive of Berkshire Hathaway told the Economic Club of Washington.
Buffett called on European leaders to resolve some of the currency union’s weaknesses.
“They’re in on a common currency but they’re not in on a common fiscal policy or a common culture or common labour practices,” Buffett said. “They have to reconcile some of these things.”
Asked how he would reduce the US government’s budget deficit, which is on track to top $1 trillion (£650 billion) for the fourth year in a row, Buffett recommended raising taxes and cutting spending.
“The problem is the Democrats don’t want to talk about what expenditures they would cut and the Republicans don’t want to talk about raising revenues,” he said.
“You’ve got to get specific about it,” he added. “Just talking about reform won’t work.”
Buffett, who is known as the Sage of Omaha, also reaffirmed his support for the “Buffett Rule.” The proposal would require Americans with incomes above $1 million to pay a 30% tax rate.
Buffett said in April that he had been diagnosed with prostate cancer that is “not remotely life threatening”.
