It is always paid back. Not paying it back would be a default.
What is actually going on is that the government currently has a surplus in the fund responsible for Social Security benefits. A few decades ago there was a debate about what to do with the surplus. Some people suggested investing it in the stock market, but the public was overwhelmingly against that idea. Yet leaving it in a non-interest bearing account also seemed foolish. So the money was used to buy government bonds.
The government is literally paying interest to itself. That may sound pointless, but it’s a natural consequence of using dedicated funds to pay for projects like Social Security.
It is always paid back. Not paying it back would be a default.
What is actually going on is that the government currently has a surplus in the fund responsible for Social Security benefits. A few decades ago there was a debate about what to do with the surplus. Some people suggested investing it in the stock market, but the public was overwhelmingly against that idea. Yet leaving it in a non-interest bearing account also seemed foolish. So the money was used to buy government bonds.
The government is literally paying interest to itself. That may sound pointless, but it’s a natural consequence of using dedicated funds to pay for projects like Social Security.