Buffett, in a New York Times op-ed column Wednesday, wrote that the record federal deficit this year will lead to public debt levels that can only be reduced through lower spending or more tax revenue. The independent Congressional Budget Office said that 2009 deficit would reach $1.8 trillion (though budget analysts expect the deficit to be $1.6 trillion)
Buffett, CEO of investment firm Berkshire Hathaway, likened the threat of inflation to that of global warming.
"Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt," he said. "The dollar's destiny lies with Congress."
While he said that the immediate focus should be on an economic recovery, he said that Congress needs to address the debt so that it grows in line with the economy. He noted that the debt-to-GDP level is "mushrooming" this year because of the deficit, going from 41 percent to 56 percent.
"Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity," Buffett wrote. "But a few more years like this one and we will find out."
He added that the obvious ways to finance big deficits -- borrowing from foreigners or from Americans -- won't be enough to prevent inflation, and that Congress will need to make serious changes to fiscal policy.
"Washington's printing presses will need to work overtime," Buffett wrote. "Slowing them down will require extraordinary political will. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can't come close to bridging that sort of gap."
Buffett hasn't hesitated from giving advice to Congress and the president before. He told lawmakers to pass bailouts for banks last fall to avoid "the biggest financial meltdown in American history." Buffett, a billionaire and the third-richest person in the world, has also criticized income tax rates on the wealthy, noting that he
pays a lower rate than his receptionist