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Although the national debt has always loomed like a monster, especially to Republicans, there are arguments not to kill it off entirely. If there were no debt to finance, for instance, the government wouldn't need to sell Treasury securities. Then the Federal Reserve could have a tough time managing liquidity, since its principal method of doing so involves buying and selling those securities.
Of course, debating how to use the surplus could be like haggling over the division of water in a mirage. Yet even if the estimates are a bit optimistic, the nation will still be faced with the problem of having too much money. "If we use the surplus wisely, we could cement our wealth for another couple of decades," says Sinai, who is worried that big tax cuts now would be premature. "The task for our society," he adds, "is to make sure we don't blow it."
--Reported by Jay Branegan and Adam Zagorin/Washington