John B. Taylor, the Mary and Robert Raymond Professor of Economics at Stanford University, gave the annual Martin H. Crego lecture, “What Should We Do With the Big Budget Surplus?” in Sanders Hall.  In anticipation of the Clinton administration’s announcement of a budget surplus and asking his audience to choose among four uses for the money—debt reduction, increased government spending, tax reduction and “all of the above”— Professor Taylor told them that the last option was the correct answer.  Proposing that the first three options be exercised in a 2-1-1 ratio and forecasting that surpluses would continue into the future “as far as the eye can see,” he allowed that “discretionary spending depends on what Congress does and on who the next president is.”  He said however that “based on pretty sound assumptions” the federal surplus over the next ten years would aggregate to $4 trillion.

The Crego lecture, part of the Crego Endowment established in 1956 by Jean Crego ’32 in honor of her father, was an annual lecture in the general field of economics under the auspices of the economics department.