Leading academics and former policy makers assess the effectiveness of post-war American fiscal policy as questions about the role of fiscal policy once again come to the forefront of economic research and debate. The post- World War II emphasis on activist fiscal policy for short-term economic stabilisation was called into question in the 1960s, and by the late 1980s was superseded by the view that fiscal policy should focus on long-run structural concerns. For the past two decades both public policy and economic research emphasised monetary policy as a stabilisation tool. But there remain issues in American macroeconomic policy having to do with budget deficits, present and projected, as well as a recent revival of interest in fiscal policy as a stabilisation tool. Overall, the academic pendulum is swinging back towards a renewed consideration of fiscal policy. This volume brings together leading researchers and policy makers to assess the effectiveness and consequences of fiscal policy. Drawing on post-war policy experience and recent economic research, this book offers a state-of-the-art consideration of where fiscal policy stands today. Contributors address both the appropriateness of fiscal policy as a tool for short-run macroeconomic stabilisation and the longer-term impact of fiscal decisions and economic policy. Topics covered include the legacy of the Reagan administration's tax cuts; whether public policy has encouraged such behaviour as "over consumption," which may foster persistent budget and trade deficits; and, in light of recent experience, how and when fiscal policy might be appropriate as a short- term stabilisation tool.