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Social Security and Sharing Sacrifice

May 24, 1986

The S.S. trust fund currently has a credit balance in it. However, since the Johnson administration, the balance in the fund has been, as an accounting device, added in with the governmental general budget (it is slated to be separated again in several years). Since this fund constitutes a substantial credit within the budget it has the effect of making the general deficit appear to be less than it actually is. Conversely any time the size of the S.S. fund is reduced (by paying COLA for instance) it diminishes the positive effect it has on the overall budget thus making the deficit appear to increase, as though paying COLA was contributing to the deficit. This is governmental "playing games with numbers."

WILLIAM NEALY

Studio City

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