The long-promised bankruptcy of Social Security is coming into view, with the Congressional Budget Office (CBO) warning checks could be automatically cut by 20% in just six years.

Will we spend our golden years driving delivery for the golden arches?

The CBO is warning that, under current law, Social Security checks will automatically shrink because the so-called Trust Fund runs out of money. These cuts could hit 20% to 25%, which would reduce payments by up to $900 a month for the typical couple.

The CBO is raising the alarm in hopes Congress will act, which is, of course, delusional. Neither side of the aisle is willing to be the guy who tells the party there's no more booze.

The background here is Social Security was set up not, as many Americans seem to think, like a savings account, but as a Ponzi scheme. The program takes your payroll tax, hands it to Congress to blow on whatever it wants, and puts IOUs – treasury bonds – into a pot hilariously called the Social Security Trust Fund.

So there was never any money in the Trust Fund – just IOUs. The scam relied, as all Ponzi schemes do, on exponential growth of people participating in the fraud to keep it going. That’s why the first recipients were the luckiest, paying in very little and getting a lot out of it.

Like any Ponzi, this was harmless enough early on. When Social Security began, there were 40 workers per recipient. With 40 times more people paying in, this built up a stash of IOUs that topped $3 trillion – fortified by a rare moment of bipartisanship in the 1980s when they raised the retirement age, which hikes taxes and cuts benefits.

But that was nowhere near enough. Because fast forward to today, and the ratio of workers to recipients went from 40 to 1 then, to just 2.7 to 1 today.

So now Social Security isn't building. It's draining to the tune of $400 million per day.

Worse, the drain is set to explode – we're in the ugly part of the Ponzi.

According to the CBO, $400 million a day goes to almost $1 billion a day in four years. And it doubles to $2 billion – per day – just 2 years later.

It didn't have to be like this. If they'd simply set up Social Security like a 401k, with actual money that belongs to you to invest – which countries like Singapore or Chile do – the average Social Security check would be astronomically higher. With no bankruptcy in sight.

This is because Social Security pays an effective 1 to 2% interest, while a mix of stocks and bonds over the past 50 years paid closer to 7%.

Compound 7% over 50 years, and it's millions for the typical American, coming to an average monthly Social Security check of $9,000.

More important, that’s actual money – not IOUs that Congress already spent.

As for what happens in six years, realistically, Congress will not cut benefits. Meaning that the $2 billion a day drain will go directly onto the deficit.

That’ll take us from a comical $2 trillion a year deficit to a downright hilarious near-$3 trillion.

This is obviously unsustainable. We'd be borrowing 10% per year and the bond vigilantes, who always have the final vote, will cast a veto, sending interest rates soaring.

For perspective, the average deficit for World War II was 18%, which (fun fact) drove inflation to nearly 30% in the late '40s. We'd be close to a permanent World War II.

Social Security was built to fail. There was a glimmer of hope in the early 2000s with so-called Social Security privatization – the “lock box” – that would convert it into a 401k.

Congress missed their chance. So now there's nothing to privatize. Just debt as far as the eye can see.

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Peter St. Onge, Ph.D., is senior economist and E.J. Antoni, Ph.D., is chief economist at the Heritage Foundation.

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