With spending on entitlement programs a major talking point for both Democrats and Republicans ahead of midterm elections, former Federal Reserve Chairman Alan Greenspan sees a potential solution in an unlikely place.

"Sweden has gone through the same thing we have," Greenspan told CNBC in an interview earlier this month, explaining how Sweden brought itself out of a major financial crisis in the 1990s. "They made a major switch where the entitlement problems have now been resolved."

Watch Greenspan explain what it would take to make it work for the United States.