Here's what happened: after WWII, the country was exporting products and oil, and U.S. workers were receiving high wages and the promise of the American dream, i.e., a house, car, and appliances for every househood, or a middle class lifestyle. But high wages led to high prices, and soon the country began to experience one trade deficit after another from the early '70s onwards. Peak oil didn't help, so the country struck deals with oil-producing countries and used the dollar to leverage itself out of everything, from trade deals to military invasions to loans.
Manufacturing started outsourcing and moved from Main Street to Wall Street to play casino capitalism. Government regulated less, allowing business to play casino capitalism some more and citizens, now out of the factory, to move to more satisfying occupations, receive higher wages, and borrow more. Government, meanwhile, used the armed forces to establish U.S. power worldwide.
That's why there's a chronic deficit and a total debt of around $57 trillion, with more than $12 trillion from government and $45 trillion shared between corporations and households (around $9 trillion for the latter). That's why by the 1990s personal debt exceeded disposable income and reached 150 pct of the latter. That's why U.S. banks are likely exposed to almost $100 trillion in derivatives, an amount that would make the total amount spent on bailouts look like peanuts. As for the armed forces, likely up to 40 pct of military operations are already funded by foreign loans. That's expected given an economy where 70 pct of growth comes from consumer spending.
The cause of U.S. ills is not "lefty corruption" but spendthrift behavior by government, corporations, and households. Put simply, the U.S. citizen demanded a middle class lifestyle and prosperity and that's what he got, only he was hardly exporting and saving, so he gained wealth by borrowing. Not surprisingly, corporations and government did not same. Not surprisingly, too, they are blaiming each other when all three were responsible.
And the countries that earned a lot by exporting to the U.S. will experience the same when they start cashing in and dream of a middle class lifestyle, too.
