They shouldn't keep the money, they should return the excess back to the taxpayers or they should convert it into on-balance-sheet debt to reflect the fact that

They shouldn't keep the money, they should return the excess back to the taxpayers or they should convert it into on-balance-sheet debt to reflect the fact that an IOU to yourself does not really represent an asset. Treasury debt is certainly the safest interest-bearing investment on the planet from the perspective that if the instrument says you will get X number of dollars every few months and Y dollars at maturity, then that is exactly what will happen. The problem comes in due to the fact that the Fed has a great deal of control over the real value of those future dollars and they might not be worth as much as you hoped when you eventually receive them. When it comes right down to it, the people in charge when the debt gets too big to manage would have to be galactically stupid to choose explicit default/repudiation over inflation. Given that the government must already borrow from sources outside the Social Security trust fund in order to meet its expenses, what do you think will happen when social security outflows exceed payroll tax inflows? The following answers seem to cover all cases as far as I can tell: 1. Raise payroll taxes to cover the excess. 2. Raise general taxes and use the extra money to redeem the special treasury bonds from the trust fund. 3. Cut spending in the rest of the government and use the excess to redeem trust fund bonds. 4. Borrow money from external sources to redeem trust fund bonds. 5. Cut benefits down to a level at which they are covered by payroll tax inflows. Any way you slice it, the trust fund is an accounting fiction and eventually taxes will need to be raised, more money borrowed, or spending or benefits cut.