Seen in the March/April issue of Contingencies (the magazine of the American Academy of Actuaries):
Stated more bluntly, the Social Security trust fund is a polite fiction that glosses over the grim reality that the excess money paid into Social Security is being spent as fast as it comes in, not put aside for the baby boomers. The only people for whom the trust fund has real meaning are those who actually work for the Social Security Administration and the Social Security trustees. When the system runs out of money, they won’t have to go hat in hand to Congress to ask for additional funding. All they have to do is redeem their Treasury securities. No problem for them.
But when that happens, Congress will have to redeem the securities with real money, meaning less money will be left over for national defense, medical research, border patrols, environmental protection, highways, pork barrel projects, etc. As a practical matter, it’s the same as if the trust fund didn’t exist.
Latest projections for that day of reckoning is 2017, only ten years away.