Here's why Morgan Stanley thinks the world's biggest economies may be powerless to stop the next recession

President Trump suggested his administration could jolt the US economy with a short-term payroll tax cut to encourage consumer spending.

According to Morgan Stanley's analysts, reducing the social security payroll tax from 6.2% to 4% would increase disposable income by about $250 billion. The firm's US Public Policy Strategist Michael Zezas said that a payroll tax cut would require congressional approval, and given the upcoming election cycle, the odds of passing major legislation seem slim.

"Bipartisan agreement appears unlikely until we see a severe growth slowdown," Ahya said.

Ahya believe China has the most flexibility to implement "meaningful" fiscal easing.

China already injected a $250 billion stimulus package into its economy earlier this year that included tax cuts and reducing the corporate sector's contributions for social security. But, diminishing corporate confidence could be dampening its impact.

Morgan Stanley expects further stimulus from China to be "defensive" and to most likely be announced if downward pressure on growth continues. The firm's lead China Economist Robin Xing predicts the country will deploy an additional $100 billion to $125 billion worth of stimulus through infrastructure spending.

"With continued trade uncertainty weighing on external demand and private investment, and policy-makers maintaining a tight grip on lending to the property sector, we expect overall GDP growth to remain relatively weak at ~6%Y," Ahya said.