US fiscal policy in a (brief?) era of surpluses

This paper has several objectives. First, it reviews the recent improvement in the US fiscal picture and discusses the sources of this trend. It then considers the implications for the future, taking into account the past per formance of budget forecasts as well as the changing composition of the fed eral budget. Next, it provides some estimates of the long-term fiscal imbal ance still faced by the US. Finally, it briefly discusses the various polic y options available to address this imbalance, and suggests how the budget measurement and forecasting procedures should be changed to accommodate the current budget situation, in which the long-term problems are not adequate ly conveyed by short-term measures. (C) 2001 Elsevier Science B.V. All righ ts reserved.