Final answer:
Including the Social Security trust fund's revenues and expenditures in the budget calculation typically reduces the reported federal budget deficit because the program usually runs surpluses.Thus, the correct answer to the student's question is: b. It reduces the reported budget deficit.
Step-by-step explanation:
When the current revenues and expenditures of the Social Security trust fund are included in the federal government's budget calculation, it typically reduces the reported budget deficit. This is because the Social Security program often runs surpluses--that is, it collects more in payroll taxes than it pays out in benefits. Including these surpluses in the overall budget calculation offsets some of the federal government's deficit in other areas. However, it's crucial to recognize that these surpluses are intended to fund future Social Security obligations, and their inclusion in the present budget can mask the true extent of the federal government's fiscal challenges.
Budget deficits have been a continuing feature of the U.S. economy, except for a few rare instances, and the discussion of whether certain expenditures like education or Medicare justify the deficits often revolves around their effects on economic productivity. As seen in various figures by the Office of Management and Budget, there's been a significant rise in budget deficits since 2008, exacerbated by economic downturns such as the Great Recession and the pandemic. However, this can obscure the true fiscal condition of the government.