There have been suggestions to privatize Social Security because it supposedly is now bankrupt.

Social Security will not go broke any time soon. It has trillions of dollars.

Projections are that income to the trust fund will continue to exceed payouts until 2017 and the fund's net worth will continue to increase through 2025. Thereafter it will diminish. According to various estimates, it may be exhausted in 2042, 2052, or even (if the economy improves) never:

As of the end of calendar year 2008, the accumulated surplus stood at just over $2.4 trillion. Projections are that current receipts will continue to exceed expenditures until 2017 (according to Charles Blahous, Special Assistant to the President for Economic Policy). Thereafter, there will be a shortfall that will be made up by withdrawals from the Trust Fund, although the Trust Fund will continue to show net growth until 2025 because of the interest generated by its bonds.

The Trust Fund will gradually be drawn upon to cover the difference between tax receipts and benefit payments. It will be completely depleted by 2042 (according to the Social Security Administration) or 2052 (according to the Congressional Budget Office). However, if the US economy performs better than the economic assumptions and projections used by the SSA and CBO, the trust funds may remain in surplus indefinitely.

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On the other hand, Bush has referred to the system going 'broke' in 2042. That date arises from the anticipated depletion of the Trust Fund, so Bush's language 'seem[s] to suggest that there's something there that goes away in 2042.' Specifically, in 2042 and for many decades thereafter, the Social Security system can continue to pay benefits, but benefit payments will be constrained by the revenue base from the 12.4% FICA (Social Security payroll) tax on wages. According to the Social Security trustees, continuing payroll tax revenues at the rate of 12.4% will enable Social Security to pay about 74% of promised benefits during the 2040s, with this ratio falling to about 70% by the end of the forecast period in 2080.

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So, the fund will remain solvent for decades, but yes, problems may show up eventually.

What to do about them? One easy fix: Everyone pays a 6.2% FICA tax, except there is a cap: One pays only on the first $106,800 of one's income. This sum is over three times the median income in northern Michigan. Hardly anyone clears that much. In other words FICA is a regressive tax, such that the wealthier you are, the lower is your effective FICA tax rate on total income. The solution: eliminate the cap, making it a flat tax so everyone pays the same rate on all income.

Another idea: A ½% tax on stock transactions. Taxes on financial transactions have a long and distinguished history; influential economist John Maynard Keynes was an early advocate for their wider use in the 1930s. According to Labor Notes, taxing each stock transaction "would cut down on Wall Street speculation and produce enough money to make Social Security solvent for the next 75 years—and raise benefits, too."