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Originally posted by LAW
No California is not responsible for the whole of the US being huge debt.
It's made up of many reasons.
The US has had a very strong dollar for the last ten years giving them massive buying power. This makes the US net importers. So the Americans have been building huge debts through over consumption and constant excess and corporate greed.
This means that every other country has been receiving Dollars for their products.
On top of that Japan, China and every other major exporter has been buying US Dollar assets eg Us Treasury, US corporate debt, US Mortgage Debt with Fannie, freddie and Sallie all the biggest in the world.
Now the purpose of this is that these many countries achieve something by buying Dollar denominated assets at all time dollar highs. As the US devalues the Dollar so will all these foreigners holding US assets and therefore their workforce always remains cheaper than the US, keeping jobs abroad at the cost of the US work force.
This is why when America has cut rates to stimulate its economy and devalue the dollar, the corporate companies seem to be selling and doing well as the Americans pile on more credit card debt and refinance their mortgages, but most importantly the US is seeing very little new job creation and Office vacancy is at the high end. A clear sign that the economy is not expanding.
No new employment and lack of expansion is due to the fact that its still cheaper to set up offices abroad or to sub contract work else where because these countries have all devalued along with America due to their Dollar based asset buying.
This is why companies like Levi's many years ago sacked 50000+ workers in America and all their products are made else where on a competitive tender basis and thats why there are many country's that offer tax incentives to these business's to set up and pay slave labour wages.
Now America finds itself in huge debt, expensive labour comparative to other counties, tied by Unions which have no basis in many other countries and tax liabilities which are being waved as incentives in other countries to create jobs.
The only way America will get out of its massive debt problems is to create a monopoly over the worlds most used commodity, oil and the start of that process began recently with oil pipelines in Afghanistan, Kosovo and the securing of oil fields in Iraq. All incidentally, after wars and invasions. Now they will create massive inflation in the US making the Dollar debt worth even less to the people that are owed Dollars and by Keeping Oil prices high, they will pay off their Dollar debt with over inflated Oil Dollars by manipulating the Oil Supply.
Hope that enlightens you a little.