Quote Originally Posted by Nowake View Post
A budget surplus doesn’t entail an absence of debt though. Under Clinton, you chaps had one. That is, if you kept on that course, you would’ve eventually paid your whole debt. Yet the then surplus was caused by Clinton’s further deregulation of the financial industry in ’94.
I am not American, but during a "Boom" period, the government should attempt to erase its debts and work up its surplus so lets say the Global Meltdown happened, the government has the resources for its "bail outs" and for heavy investment to keep the employment down, creating jobs and opportunities for businesses to continue under these conditions.
(There should be budget set aside for investment anyway, regardless of where about it is in the boom-bust cycle. This is for extra-intensive investment during the hardtimes)

However, if it is a situation where the debts are cleared and you got surplus money, you either use it for investment (if required for any major projects or serious work) or lower taxes.