It reduces the reported deficit
What is budget deficit ?
- When expenses go beyond receipts, a budget deficit results. Budget deficits may result from specific unforeseen circumstances and initiatives. Tax increases and spending reductions are two ways that nations might deal with budget problems.
- The invested funds are mixed in with the Treasury's cash operations for the remainder of the government until they are required to pay benefits. Special Treasury securities are used to keep track of the size of the accumulated reserves.
- As with other trust funds, the Treasury credits Social Security's surpluses with securities; this extra money is then used to lower the amount of additional federal borrowing required to fund government operations. When trust fund revenues are less than their outgoing costs, the opposite occurs.
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