In Wednesday’s Projo, op-ed columnist Froma Harrop defended (well, more like asserted) the idea that Social Security is our collective national trust fund…

Republicans have never loved Social Security, but they know that plans to privatize the program remain deeply unpopular. A few holdouts still carry the privatization flag, but most others prefer another tack: undermining faith in the program’s solvency. Hence all this loose talk about the Social Security Trust Fund’s being “a fiction.”

Matt Bai of the New York Times, on the other hand, is more specific about why the concept of the “trust fund” should be considered a fiction (h/t Peter Suderman)…

The coalition [of defenders of the Social Security structure status-quo] bases its case on the idea that Social Security is actually in fine fiscal shape, since it has amassed a pile of Treasury Bills — often referred to as i.o.u.’s — in a dedicated trust fund. This is true enough, except that the only way for the government to actually make good on these i.o.u.’s is to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases — none of which seem like especially practical options for the long term.

For further information, I went to the official Social Security website, to get the official word on how Social Security works…

By law, income to the trust funds must be invested, on a daily basis, in securities guaranteed as to both principal and interest by the Federal government. All securities held by the trust funds are “special issues” of the United States Treasury. Such securities are available only to the trust funds…
Tax income is deposited on a daily basis and is invested in “special-issue” securities. The cash exchanged for the securities goes into the general fund of the Treasury and is indistinguishable from other cash in the general fund.

I think what this says is that money comes into to a special “Social Security” area (account?) of the Federal Government and from there is transferred to the U.S Treasury, where it can be used for any purpose that Treasury funds might be used for. In its place, government-backed “securities” are left behind, to keep track of how much money that originated with Social Security might eventually need to be put back (with interest).
If this is any more than the concept of loaning yourself money, someone has to explain to me how.
And even most people who loan themselves money (for instance, from their own 401(k)) realize that once they’ve loaned themselves X dollars, the pile of money they’ve loaned from is now X dollars lighter, even if they leave a note saying ‘remember to pay back the X dollars taken from here’. Likewise, the same dollar cannot be in a “trust fund” and in the Treasury Department’s “general fund” at the same time. You can’t spend the same dollar twice.
If there really is a Social Security “trust fund”, in the sense that most people understand it, this extra step of replacing the initial funds with government-backed securities shouldn’t be necessary. But since the step is there, for the government to pay real money to SS beneficiaries from “the trust fund”, it has go get real money from somewhere else first — i.e. pay back its loan to itself — by issuing debt, cutting spending somewhere else, or raising taxes — the set of options succinctly put forth in the Bai article.
So how does the Social Security Administration justify the trust fund concept? By saying that…

Far from being “worthless IOUs,” the investments held by the trust funds are backed by the full faith and credit of the U. S. Government.

This sounds to me, given the current state of Social Security, like an argument which boils down to “when the government does it, that means it’s not a Ponzi scheme”, which I find to be as compelling as Richard Nixon’s old line that “when the President does it, that means it is not illegal”.
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