The "trust fund" money has to be put somewhere. They're not going to warehouse pallets of cash, so they convert it into the most secure financial instrument in the country: Special Issue Securities. This has the side effect of converting the revenue into general-funds cash. So long as the government has power of taxation and a functioning mint, there shall be funds to repay those "bonds" as needed. Thing is now the government is self-restraining the power of taxation, has spent too much cash to pay up, and is refusing to coin money. Whither grandma's check?
The government has created an enormous, unpayable unfunded liability for social security and medicare. When the Budget was unified by Lyndon Johnson Social Security became classic Ponzi scheme. It is fraud, pure and simple. Social Security taxes pay for current recipients and contribute to the general fund. Over $2.6 trillion that people have thought they were contributing to their retirement was spent as part of the general government expenditures.
Because total government spending is too great to be supported by the tax revenues this economy can generate the only way to fund current government expenditures is through massive borrowing(about $1.5 trillion per year every year).
This is unsustainable. When people stop buying trillions of dollars per year of our bonds the “special issue” bonds in the so called Social Security Trust Fund will be totally worthless. They are totally worthless now but people just don't realize it yet.
There is no trust. There are no funds. The money has all been spent.
It is the greatest single fraud in the history of human civilization.