First, it appears that the "Intragovernmental Holding" portion of the National Debt reached a peak on 10/18/2011 at $4.744 trillion. This includes the Social Security Trust Fund and Medicare Trust Fund. When more social security and medicare taxes are withheld than paid out, this number increases. It also accrues interest which increases the balance. When more benefits are paid out than taxes are withheld, it decreases. Since the government overall is running a huge deficit, this means that a portion of the Social Security checks now are coming from borrowed funds.
Second, read this article: http://brucekrasting.blogspot.com/2011/12/social-security-2011-another-bad-year.html
"The 2011 numbers for SSA indicate that we are at least five years ahead of existing thinking on the SSA deficits. When this realization sinks in, it will break the hearts of the SS defenders. If we are, as I contend, five to six years ahead of “schedule” with cash deficits at SSA, there is no alternative besides cutting scheduled benefits. Raising taxes to fill a hole this big is not an option. Nor is it an option to maintain the status quo and allow for a very rapid rundown of the SS Trust Fund.
If we are going to experience what I believe we will, then the cumulative SS cash shortfall over the next decade will add ANOTHER $1.5 trillion onto Public Sector Borrowing ("PSB"). (A shift from the Intergovernmental account into the PSB account; AKA the Chinese). This increase in PSB more than offsets the $1.2 T of cuts that the congressional super committee failure has just mandated."
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