Congratulations Mr. Obama, you have just inherited $10 trillion of debt and another $50 trillion in unfunded liabilities. Now what?

While Americans have long ignored the problems that will arise from an enormous federal debt, namely the insufficient funds for entitlement programs such as Medicare, Medicaid, and Social Security, we will see the manifestation of these problems sooner than Americans might think.  The consequences of our fiscal irresponsibility will be apparent within Mr. Obama’s first term.

In 2011, the Baby Boomers will start to retire, collecting entitlement benefits in overwhelmingly large numbers. By 2010, it is estimated that Medicare and Medicaid will absorb 25% of our federal spending. Medicare spending alone increased by 13% just in 2007 and will continue to increase between 7 and 8 percent a year as the number of Americans over 65 will surpass 62 million in 2025.

Before Mr. Obama has even stepped into the oval office, he has promised the expansion of the health care program. However, before expansion, the federal government must seriously reform the health care system, especially Medicare. Raising taxes and repealing the Bush tax cuts will be necessary to generate more revenue to fund entitlement programs, but it will not solve the problem alone.  The government must focus on decreasing the growth of health care spending. There are many proposed solutions to this problem such as raising the age of eligibility for Medicare and increasing health care cost sharing between the individual and the government.

If there is one lesson we can take from the Wall Street collapse, it is that we cannot rely on nor spend money we simply do not have. Millions of Americans are counting on the fact that they will receive health care benefits when they retire, but if the government continues on this path of recklessness, these promises will be hard to fulfill.

It will not be easy, nor popular, Mr Obama, but these tough decisions are undeniably necessary to ensure the fiscal health of our country and its citizens.