Almost as soon as the 2010 Social Security trustees report comes out today, various groups will claim that the program is fiscally healthy because its trust fund won’t run out until sometime in the 2030s. Sadly, the reality is very different.

The trust fund contains promises to pay—not real money. Those promises are in the form of special issue U.S. Treasury bonds, so they have legal standing, but there is no Scrooge McDuck-like vault filled with cash.

Instead, as Bill Clinton’s OMB noted back in 2000:

These [Trust Fund] balances are available to finance future benefit payments and other trust fund expenditures-but only in a bookkeeping sense. These funds are not set up to be pension funds, like the funds of private pension plans. They do not consist of real economic assets that can be drawn down in the future to fund benefits. Instead, they are claims on the Treasury, that, when redeemed, will have to be financed by raising taxes, borrowing from the public, or reducing benefits or other expenditures. The existence of large trust fund balances, therefore, does not, by itself, make it easier for the government to pay benefits. (emphasis added)

In plain English, that means that the trust fund bonds will be repaid by collecting more general revenue taxes from you and me, by borrowing the money which means repaying it by collecting more taxes from our children, or by having the government spend less. Just five years after the program begins to run deficits, that amount will equal $100 billion a year, growing to over $300 billion a year.

It is true that those of us who were employed after 1983 paid more in Social Security taxes than were needed to pay the program’s benefits, but those extra taxes were spent on everything from roads to aircraft carriers to government employees’ salaries. That money is gone.

So when you hear that Social Security is fully funded until sometime in the 2030s, remember that it is funded because you and your children will be paying hundreds of billions of dollars in additional taxes, and not because there is a pool of money waiting to be spent on benefits.