The Political Economy of the Budget Surplus in the U.S.
Current surpluses in the U.S. have been achieved by a combination of a strong economy, low interest rates, and sharp cuts in defence spending. These surpluses follow a period (the eighties) of rather exceptional budget deficits. This paper investigates the origin, size, and expected future patterns of the U.S. budget balance. It discusses how different political forces may generate alternative fiscal scenarios for the U.S. in the next decade.
Published as "The Political Economy of Fiscal Adjustments", Brookings Paper, Vol. 28, no. 1 (1998): 197-248.