SS is funded by separate tax, but if there's a shortcoming, it is filled from the general budget, and if there's a surplus, it goes into general spending - so this distinction is an accounting fiction, both are incomes of the same government and as long as government fulfills its obligations nobody cares how the money got there. When SS starts running negative cash flow, the govt would have to refill that. Right now the promise of the govt is to refill that up to 2.7 trln - which is the size of SS Trust Fund - but nobody doubts for a second that the govt will in fact refill any sum necessary or will change SS rules (raise taxes and/or cut benefits, which are not legally guaranteed by anything) if necessary. So "lock box" here has very little meaning except taking part of the money out of circulation for no reason - it would definitely not stop the govt from borrowing money.
> as long as government fulfills its obligations nobody cares how the money got there
I care. If they increase our debt or just start printing extra money, they have fulfilled their obligation to SS while screwing the rest of our economy pretty hard.
> has very little meaning except taking part of the money out of circulation for no reason
Very little meaning except having the government follow rules of financial discipline that any financial advisor would advise individuals and businesses to follow. If you want to save after-tax money for retirement, separate it out from the rest of your disposable income. Keep separate accounts, separate records, etc. Otherwise, you'll blur the line between your different monetary purposes and it's doubtful you'll mean your savings goals.
It's about discipline and clarity to the American public. Sure, a dollar would be a dollar if the government were responsible enough to follow sound money management principles... but when have they ever done that?
For financial discipline it does not matter, government will borrow anyway because it can, and it will print money anyway because it can. Because borrowing and spending is politically easier than not spending. US government does not have any savings - taxpayers are its savings account. And as long as substantial amount of people think that raising taxes is a way to solve the problem of runaway government spending - this savings account will be used and abused endlessly. There's no reason for politically risky cuts if you could just borrow and tax.
The sad fact is US government is addicted to deficit. And no addict was ever cured by giving them access to more of the source of their addiction.
