Much has been made lately about the precarious condition of social security. Every year the Social Security Trustees release a report on the program's current condition and future. Going against the conventional wisdom that the system is in meltdown, the latest report states: "Total expenditures in 2016 were $922 billion. Total income was $957 billion, which consisted of $869 billion in non-interest income and $88 billion in interest earnings." But, "when interest income is excluded, Social Security's cost is projected to exceed its non-interest income throughout the projection period, as it has since 2010. For 2016, cost for the year exceeded non-interest income by $53 billion." (Report, p. 2). The Congressional Budget Office refers to the deficit incurred when interest is excluded as the "primary deficit" (at https://www.cbo.gov/publication/25052).
The interest income comes from the huge social security accumulated tax surplus, the "trust fund," so how can the system be in trouble? In a journal article on social security I co-authored, I quoted from the Congressional Budget Office Report of June 2004:
The trust funds serve mainly as an accounting mechanism to track revenues and outlays for Social Security. Although the Social Security system is authorized to spend certain amounts, the resources to finance those outlays derive from the budget as a whole - and ultimately from the economy. (Congressional Budget Office, 2004: 2)
In a 2010 CBO statement, that organization was even more frank:
The balances credited to the trust funds are a measure of the government's legal authority to pay Social Security benefits, but the resources to redeem government bonds in the trust funds and thereby pay for benefits in some future year will have to be generated from taxes, other government income, or government borrowing in that year. https://www.cbo.gov/publication/25052
This has been a consistent theme of the CBO as this 1989 quote from then-CBO Director Reischauer to a Congressional sub-committee attests: "There is no getting around the fact that the retirement of the baby-boom generation will have to be provided for out of the economic resources available at that time." https://www.cbo.gov/publication/18915