When it goes "broke", government will print more money like Greenspan said. Or it could raise taxes, but that is never politically popular except by the people who have no money.
We create new money for every dollar of benefits paid "now". The net effect of that is no different with or without the extremely regressive tax collected only from the working class. The only change made by any federal tax is in the reduction of the money supply and what portion of it is owned by whom.
Yes, I understand that our national debt will never be retired, debt is money, debt grows as does the money supply and inflation eats away at people's wealth.
The part you're not getting is that the national debt "IS" the money supply, not a mortgage on our future productivity. It is the net "savings" from our (private sector) commerce with our government in which we exchange the real resources and labor it needs for its unit of account so we can pay the tax imposed and retire private debt also denominated in that unit of account.
As the monopoly issuer of our currency, the government never borrows its own currency. It offers a dividend for those who have it to entice them to give up the liquidity of that currency for a specified time. Think of it as a "temporary" tax that rewards the taxpayer with dividends.
My eyes roll when people say the politicians need to pay back the Trust Fund. How would they do that? Where would the money come from? They would conjure it out of thin air like they always do or raise taxes a little to make the whole sham system look somewhat respectable.
That is how bonds work. It isn't that our government "stole" the money. It destroyed it from the system when the tax was collected, which is how taxes work. The government sector cannot hold both money and debt denominated in the same unit of account, and neither can the private sector, so the national debt cannot be a burden on the private sector.
The government sector holds the debt (future tax credit) and the private sector holds the money. As they move back and forth across sectoral lines they simply increase (spending) or decrease (taxing) the money supply.
