Two years ago, the USA experienced our first trillion dollar federal budget deficit. Last year, we experienced our second trillion dollar deficit. This year, our annual deficit is projected to reach over $1.6 trillion -- the largest in history. This year's deficit is also projected to be the highest as a percentage of our economy since World War II.
It took the U.S. over 200 years from George Washington to Bill Clinton to amass the amount of debt that was added since 2006. According to the US Treasury Department, our nation's debt currently stands at over $14 trillion, which amounts to a $45,500 "birth tax" for every child born in America this year or $120,500 for every household.
The non-partisan Congressional Budget Office recently reported that the national debt has reached the highest level compared to the entire economy since 1945. At the end of 2008, that debt equaled 40 percent of the nation's annual economic output. This figure will sharply increase to 70 per cent by the end of this year -- which is the highest point since World War II.
Growing debt would increase the probability of a sudden fiscal crisis, during which investors would lose confidence in the government's ability to manage its budget and the government would thereby lose its ability to borrow at affordable rates.
Earlier this year, the House took a giant step towards getting spending under control. It approved the FY 2012 Budget Resolution which cuts $6.2 trillion in government spending over the next decade and reduces deficits by $4.4 trillion. This proposal balances the federal budget and puts the government on track to pay off the debt. By 2040, this budget will produce annual surpluses, according to the non-partisan Congressional Budget Office. By contrast, if we do nothing, the annual deficit would grow to consume nearly one-fifth of the entire U.S. economy and the debt would grow to Greece-like levels of over 100%.
I believe that just as our families and neighbors have had to tighten our belts during this recession, that the federal government must do the same. While the budget we passed was a good start, only a constitutional amendment can ensure that we will not stray from the path of a balanced budget as we did ten years ago. A constitutional amendment will help ensure a future of stability for our children and grandchildren.