(FORTUNE Magazine) – The Social Security system is headed for unaccustomed trouble in the coming years -- gigantic surpluses. By the mid-Nineties the old age, survivors, and disability portion of Social Security will be running a surplus (the difference between tax revenues and benefit payments) of more than $70 billion a year. The annual surpluses will grow much larger early in the next century. Medicare, the hospital insurance portion of Social Security, will begin running deficits within a few years, but -- for a while -- they will be much smaller than the surpluses in the retirement fund. By 2030 the Social Security retirement trust fund will balloon to $12 trillion, unadjusted for inflation. For perspective, the trust fund will be nearly as large as the national debt, even if the federal budget deficit stays at the same high percentage of gross national product that it is now. Social Security surpluses sound like great news, and they are. But they could become a big problem if they aren't handled properly. The Social Security system needs those surpluses to pay for the retirement of the baby- boom generation. Without them the baby-boomers' children and grandchildren will have to pay punishingly high payroll taxes. But the surpluses will create a dangerous temptation for Congress to cut Social Security taxes, boost benefits, or boost spending in other areas. Indeed, politicians have already begun saying that the budget deficit isn't so bad as it appears because the Social Security surpluses will automatically bring it down. Every American has an enormous stake in the future of Social Security, directly as a taxpayer and beneficiary and indirectly because the system has a substantial impact on the economy. The federal government now spends more on Social Security and Medicare than it does on defense. Most people pay more in Social Security taxes (including the employer contribution) than they do in income taxes. A typical family stands to gain or lose much more over its lifetime from Social Security than from the intensely debated tax reform of last year. A husband and wife born in 1945 who each earn $25,000 a year will lose about $124,000 on Social Security. That figure -- about the median price of a new home -- is my estimate of how much their Social Security taxes will exceed the benefits they collect. In contrast, people who are retired now usually get back many times what they and their employers paid into the system, plus interest. As we move to younger households, from one-earner to two-earner couples, from single women to single men, the ''deal'' offered by Social Security gets progressively worse. Social Security needs the surpluses of the Nineties and the early part of the 21st century because the system still has a long-run deficit. That is, the deficits that are coming after 2030 swamp the surpluses we will enjoy before then. Under so-called intermediate assumptions about the economy and demographics used by Social Security actuaries, the retirement and hospital programs have a combined long-run deficit equal to 3.4% of taxable payroll. In other words, if we raised Social Security taxes (the combined employee- employer rate is 14.4% this year and will rise to 15.3% in 1990) by another 3.4 percentage points tomorrow and kept the increase in place for the next 75 years, Social Security revenues would equal benefits. That would be the largest peacetime tax increase in history. If we don't raise taxes now -- and no one is recommending that we do -- but husband the huge reserves that would accumulate, the U.S. will have to boost payroll taxes by about 7.5 percentage points after 2035. I HOPE we will have the political courage to save the surplus rather than squander it. One factor makes it possible that Congress will behave more responsibly than usual when the annual surpluses start. By the mid-Nineties the baby-boom generation -- the people depending on the surplus to pay their benefits -- will make up the largest and most influential voting block. But if we do build up such a large surplus in the retirement fund, the U.S. will have to deal with another unusual problem: a possible shortage of government debt. Since the retirement trust fund, which is invested in government securities, will eventually approach the size of the national debt, few Treasury bonds and bills would be left for other investors. Well before we get close to Social Security owning most federal securities, we will have to confront the question of whether to allow it to buy corporate stocks and bonds. The potential for political manipulation of the private sector could reach new extremes if a government agency directly owned a large part of corporate America. I fear, however, that we never will have to face that issue. More likely, Congress will use the Social Security surplus as an excuse to raise spending on various pet programs and to bail out Medicare for a time. This will work for only the next 20 or 30 years; after that the surpluses will not be large enough to offset the ever-growing deficits in hospital insurance. Of course if we do use the surpluses this way, they will not be available to help pay pensions to baby-boomers. Many politicians have expressed deep concern about the economic and ethical implications of passing tax burdens to the future through the budget deficits we are running now. Yet the burden we are passing on through Social Security could dwarf the budget deficits. The apparent short-run health of Social Security obscures the long-run problems in the system, and the coming surpluses in the retirement fund will make it even harder to focus on them. % But we must deal with those problems. The first opportunity to do so may come in a few years when Medicare starts to run a deficit and we have to decide whether to raise taxes, cut benefits, or allow it to ''borrow'' from the retirement and disability fund. With luck, that is when we will begin to secure the long-run future of Social Security.