The events since September 11, including a significantly expanded path for federal expenditures and the potential for further tax cuts, have at least delayed such an outcome and have added significantly to the uncertainty about projections of future surpluses.
Nevertheless, it seems prudent to continue to plan for the contingency that over some longer period the federal debt might, at least for a while, be eliminated. In discussing the implications for monetary policy, it is useful to separate monetary policy actions into two steps.