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U.S. employers have just slashed another 467,000 jobs, driving the official U.S. unemployment rate to 9.5 percent, its worst level in 26 years. If you include part-time and discouraged workers, 16.5 percent of America’s work force is now jobless!
Dow plunged 223 points on Friday and is now down nearly 500 points from its June high.
And all this pales in comparison to California’s fiscal disaster.
California has a GDP of $1.8 trillion, larger than the economies of Russia, Brazil, Canada and India. It’s America’s most populous state with 38 million people. And it’s in the final throes of financial death — bankruptcy.
In Governor's own words, “Our wallet is empty. Our bank is closed. And our credit is dried up.”
This week, the Golden State had no choice but to begin paying its bills with i.o.u.’s. Now, Moody’s and S&P are watching from the sidelines, poised to downgrade the state’s bonds by several notches to junk status in one fell swoop — a move that’s going to crush the tax-exempt bond market and could send stocks off the proverbial cliff.
The sad fact is, California could be just the first domino to fall in an avalanche of downgrades and defaults among cities, counties and states from coast to coast.
Mountain of debt:Rising debt may be the next crisis:
The Peter G. Peterson Foundation, established by a former commerce secretary and investment banker, argues that the $11.4 trillion debt figures does not take into account roughly $45 trillion in unlisted liabilities and unfunded retirement and health care commitments.
That would put the nation's full obligations at $56 trillion, or roughly $184,000 per American, according to this calculation.
MOUNTAIN OF DEBT: Rising debt may be next crisis - Yahoo! Finance (http://finance.yahoo.com/news/MOUNTAIN-OF-DEBT-Rising-debt-apf-140105975.html?x=0&sec=topStories&pos=4&asset=&cco de= - broken link)
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