Where, the lack of health insurance is indirectly forcing people to turn to both programs, once their condition becomes so severe that it can no longer be ignored. At which point, the costs increase to treat these people which causes the overall levels of the national debt to increase. However, the current recession is also having a direct impact on both entitlement programs. This is because a large number of Baby Boomers are approaching retirement age, which means that many will often look to both programs as way to supplement their income and health insurance. Then, when you combine this with the fact that the current recession is causing incomes to decline and health insurance premiums to increase, means that existing retirees are turning to both programs for assistance. As a result, the effect of these two different elements on Medicare and Social Security is a sharp rise in the number of benefits that are being paid out. An example of this can be seen with the 50% increase in benefit payouts in 2009. Commenting about what was taking place a spokesman for the Social Security Administration said, "We are seeing a significant increase in both retirement and disability applications as a result of the recession."

This significant because it underscores how the current recession has affected those who are just entering retirement and existing retirees, as they are turning to both programs for assistance. Over the long-term, this can cause the national debt to increase even more, as increasing numbers of people are relying on both entitlement programs because of the severe recession.

Clearly, the entitlement programs of Social Security and Medicare are helping to contribute to the rising federal debt levels. This is because both programs are based on systems that worked well when they first were enacted. However, as times have changed, both models have become broken. The current recession and financial crisis highlights the severity of the problems that are faced by both, as rising health care costs and the total numbers of uninsured are helping to increase the national debt. The reason why is because no one is willing to take the steps necessary to effectively reform both programs. To achieve this objective requires taking a new approach where both programs will have: semi-privatization, increasing the age of eligibility and increased taxes. These different elements are necessary because it will allow both entitlement programs to adapt to the changes that are taking place in the real world. Where, semi-privatization will increase options for everyone, while ensuring that the contributions are protected. Increasing eligibility would reflect a change that is occurring in the population, as they majority of people are living longer. The increased taxes would involve using other taxes to help fund both programs for future shortfalls. Together, these different elements highlight how both entitlement programs can be reformed. If no action is taken, it is only a matter of time until a financial crisis involving both programs and the national bet will become a problem. It is through examining both entitlement programs and their effect on the national debt; that provides the greatest insights as to the overall scope of the challenges faced by both programs.

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Chart1

1959 284 1959

1969 1969 353

1989 2857 1989

1999 1999 5656

11909 2009

Debt Levels

Debt Levels

Debt Levels

Year

Federal Debt Levels in Millions

Growth of Federal Debt Since 1949

Sheet1

1949 1959-1969-1979-1989 1999 2009

Debt Levels $252 $826 $11,909

Debt Levels $284 $2,857

Debt Levels $353 $5,656

Chart1

2007

2008

2009

Areas Contibuting to National Debt

Spending Category in Billions

Four Areas Contributing to the National Debt

Sheet1

DOD HUD Int. S.S.