(lots of historical US government numbers at: http://www.gpoaccess.gov/usbudget/fy11/hist.html)

Bullet point #3 is not quite the whole truth; the trust fund has income from taxes (about $560 billion in 2009) and interest ($107 billion in 2009); using this to pay benefits (about $540 benefits in 2009).

The SS trust fund invests all the excess of income vs. outgo in United States Treasury bonds and a net surplus of about $2.3 trillion as of 2009. These are paper IOUs; just like the bonds held by the US Military Retirement fund, the Chinese government and all US Treasury bond holders.

Focusing on the state of SS Trust Fund avoids focusing on the real problem (not to say the SS trust fund is not a problem). The real, genuine, immediate and enormous problem is the General Fund (all spending other than the trust funds, primarily Social Security and Medicare).

The General Fund, primarily defense spending, Medicaid, interest payments and Veteran affairs spending. We ran a deficit of $1,549 billion in 2009, a deficit of $641 in 2008 and have not had a surplus since since 2000; in fact in the last 50 years the General Fund has only had a surplus in 3 years. The SS trust fund has run a surplus in 41 years of of the last 50 years.

Discussing the problems of SS is missing the elephant in the room. While interesting, Social Security is not our most pressing problem. What ever “fix” someone might suggest would be rather pointless with the General Fund hemorrhaging red ink. We allegedly fixed the SS problem in 1982 with a very large increase in Social Security taxes (while at the same time cutting individual and corporate income taxes).

Fixating on Social Security while turning a blind eye to the General Fund is like worrying about your athlete’s food when you have just had your arm cut off.