Going into the crisis, the United States was already on shaky ground fiscally, with the CBO projecting annual $1 trillion deficits as far as the eye could see given the long-term crisis facing entitlements as the ranks of retirees grow and healthcare costs rise.
But that was during a time when the economy was booming and unemployment was at a 50-year low. Now, the CBO expects GDP to drop 12% in the second quarter, the equivalent of 40% on an annualized basis. Unemployment is expected to average 14% over the course of the quarter.
Now, CBO expects the public debt to hit 101% of GDP by the end of the year. The only time in American history that debt has been higher was in the years 1945 and 1946, when it hit 104% and 106%, respectively, as a result of wartime spending.