There's just no way around it $52 trillion is a huge amount of money, especially taking into account that that's the amount the federal government would owe if it stopped the Medicare and Social Security programs immediately, according to a new study by the National Center for Policy Analysis (NCPA; Dallas).

The National Center for Policy Analysis is a nonprofit, nonpartisan organization whose goal is "to solve problems by developing and promoting innovative, market-driven solutions."

In its report, the NCPA shows that the $52 trillion figure comes from the government owing those who have already earned these new benefits. To put this in more perspective, the size of the entire U.S. economy is $14 trillion.

"I think it's an eye-opener," Andrew Rettenmaier, an NCPA senior fellow and co-author of the study, told Medical Device Daily. "No one thinks we are going to end these programs," he said, "but if we account for federal obligations the way private pensions and state and local governments are required to, the federal government owes up to $52 trillion (in current dollars) as of today."

A huge component of that debt is generated in serving those 65 and older.

"We need to think of funding for these federal programs as bonds that people are intending to cash in and that this debt is already on the books," he said.

The report breaks down that lump sum a bit more:

• An estimated $9.5 trillion is owed to current retirees an amount equal to almost $250,000 per person 65 and older in 2008.

• Adding the liability owed to those nearing retirement (55 and older) more than doubles the accrued debt to $20.6 trillion.

• Adding the benefits accrued by younger workers brings the total to as much as $52 trillion. The beneficiaries include all retirees, as well as anyone in the workforce above 22 years of age. For every year that is in waiting, Social Security reform will cost an additional $600 billion.

"Much of the debt is owed to most of the people who won't be affected by any type of reform," Rettenmaier said.

In other words, if the country were to go to a prepaid system for Medicare and Social Security, those who are still in the workforce would not only have to pay for reform measures, but also take on the brunt of the deficit.

"Some would say that is a double burden, and some would say it's really onerous to this generation's taxpayer," he said. "And that's right. But if you continue on the same path you're going to expose another generation to this debt. So the question becomes, "Will one generation pay for reform so that later generations can benefit?"

Even more staggering, Rettenmaier says, is that if Medicare and Social Security continue on their current course, the obligations of taxpayers will grow. This past spring, the Social Security and Medicare trustees reported that if the programs were to continue to operate under existing conditions indefinitely, the value of the unfunded obligation could be seen as $101.7 trillion, or seven times the size of the U.S. economy.

Currently, the two programs combined are spending more than they are receiving in premiums and dedicated taxes:

• By 2012, one of every 10 income tax dollars will be needed to close the funding gap for Social Security and Medicare.

• By 2030, almost half of all income tax dollars will be needed to close the funding gap.

• By 2070, almost 80 cents of every income tax dollar will be needed to cover the cash-flow deficit in the two programs.

Rettenmaier was hesitant to give a grade regarding the current state of both systems.

"I wouldn't grade it," he said. "This study is just an assessment of the size of the debt inherent in the programs. It's not a debt that we consider in the balance sheet of the U.S. and [we should]. The longer we postpone reform, the worse the financial picture becomes. Procrastinating will make the cost of reform even more painful."