Remember, Social security is being looted by the government by taking the money and issuing IOU’s. By law social security can only invest in Government bonds. If we ever changed that law greater profits may be available. Of course, Government would get greedy and screw that one up too?
Yes, the SS and Medicare trust funds along with the other trust funds like the federal employees benefit trust funds represent unfunded liabilities and are part of the national debt. The question is what would you do with the trillions of dollars held by these trust funds? Who would decide how and where to invest the holdings? They would certainly distort the economy and be vulnerable to politicization. At least by investing them in T-bills, we don't have to borrow the money publicly. In any event since these trust funds are running in the red and continue to do so without reform, the T-bills will be running out and there will be a reduction in the benefits paid.
What most people don't realize is that these programs are not actuarial sound. We have to raise taxes or decrease benefits or some combination thereof to make them solvent. Our aging population is growing every day with 10,000 baby boomers retiring every day for the next 20 years. We will double our population over 65. Even if none of the revenue were invested in T-bills, there isn't enough money to pay benefits. That is the real problem, not government "looting." The T-bills for SS run out in 2034 and for Medicare in 2024. Then, by law, the benefits paid out must be reduced to revenue received.
In 1950 there were 16 workers to every retiree; today it is about 3, and by 2030 it will be 2. Since these programs are pay as you go with today's workers paying for today's retirees, we will have to tax future generations much more to get the needed revenue. Not a very pleasant outlook for our children and grandchildren.
The best way to characterize Social Sec is:
I retire tomorrow, and at the end of the month 2.9 workers begin to send me 2000 bucks every month. If those workers can’t generate that much money, the govt will create some (at least while they are able to).