The secret of the US economy: Only four states determine everything – California, Texas, New York and Florida
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Published on: September 9, 2025 / Updated on: September 9, 2025 – Author: Konrad Wolfenstein
The secret of the US economy: Only four states determine everything – California, Texas, New York, Florida – Image: Xpert.Digital
Record growth meets record debt: Is the US economy a ticking time bomb?
### The US Economy: Individual State Dominance versus the Big Picture ### Texas vs. California: Who's the True Economic Engine of the US? ### Tesla, Apple & Co. Flee: Why Texas Is Becoming the New Economic Miracle ###
America's unequal power: How few states can save the USA – and at the same time endanger it
The US economy is considered the most robust in the world, but behind the impressive facade lies a remarkable concentration of power. It's not the 50 states that march in lockstep, but a handful of economic giants that are almost single-handedly pulling the country upwards. At the top is California, whose economic output surpasses that of Japan alone. Close behind is Texas, which is emerging as the new powerhouse thanks to aggressive growth and the attraction of tech giants like Tesla and Oracle.
This article explores the fascinating dual nature of the American economy: On the one hand, there are unstoppable powerhouses like California, Texas, New York, and Florida, which together generate over a third of the entire US GDP. On the other, however, lurk systemic risks – record levels of debt, growing social inequality, and political instability – that threaten the foundation of this strength. We analyze how this concentration strengthens the US globally, but also the resulting vulnerabilities for the future of the world's largest economy.
The economic powers are pulling the country upwards
The US economy is clearly dominated and driven by a few states. California alone generates 14.1% of the total US GDP – at $4.1 trillion, the Golden State, as a standalone nation, would be the fourth-largest economy in the world, ahead of Japan. Texas follows with $2.7 trillion (9.3% of US GDP), which is roughly equivalent to the economic output of Italy. The top four states (California, Texas, New York, and Florida) together account for 37.2% of total US economic output. This concentration clearly demonstrates that a few economic powers are pulling the other states along. While 11.7% of Americans live in California, the state contributes 14.2% to the national GDP – a clear indicator of above-average productivity.
The regional distribution reveals further patterns: The Southeast leads all US regions with $6.5 trillion in GDP, driven by Florida and Georgia. The Far West reaches $5.8 trillion, primarily driven by California, while the Northeast generates $5.0 trillion, driven by New York and Pennsylvania.
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Structural shifts reinforce dominance
A notable trend is reinforcing this regional concentration: Texas is emerging as a new economic powerhouse and could overtake California as the growth engine. Over the past five years, Texas achieved annual GDP growth of 5.8%, well above the national average. Companies like Tesla, Oracle, SpaceX, and Apple are relocating headquarters or establishing large offices in Texas, attracted by lower taxes, less regulation, and lower operating costs.
California's economy grew more slowly (2.3% annually) between 2020 and 2023 than Florida (4.6%) and Texas (3.9%), but retained its absolute dominance through technology, entertainment, and agriculture. Over the long term (25 years), California grew by 111% versus 75% nationally, while Texas even reached 128%.
The US as an overall economy: strengths and vulnerabilities
Economic strengths
The US will remain the most robust major economy in 2025, with a GDP of $29.2 trillion. While Germany stagnates (0.1% growth) and the EU achieves only 0.7%, experts forecast 1.5% growth for the US despite protectionist trade policies.
Key factors of US strength
- Demographic dynamics: Florida exemplifies how population growth through immigration creates continuous economic stimulus
- Technological leadership: Companies like NVIDIA recorded a 262% increase in revenue, Apple achieved record revenues
- Consumption strength: Real wages rise, retail sales grow robustly
- Financial market dominance: 63% of global financial assets ($59 trillion) are held by the US
Structural vulnerabilities
Despite its strengths, the US economy has significant structural weaknesses:
- Debt problem: National debt will already reach 124% of GDP in 2024 and could rise to 143% by 2035. The budget deficit is 5.6% of GDP and will grow to 6.1%. Total debt (private + public) exceeds $100 trillion.
- Economic inequality: The richest 1% earn 139 times more than the poorest 20%. This concentration weakens domestic demand and creates social tensions.
- Geoeconomic risks: US trade policy with flat tariffs of 15% on EU goods and up to 125% on certain countries endangers global supply chains and could push inflation to 3.2% (2025) and 3.1% (2026) – well above the Fed's target of 2%.
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International Stability Assessment
In the 2024 Fragile States Index, the United States ranks 141st out of 179 with a score of 44.5 points – indicating relative stability but also deteriorating trends. US economic experts fear increasing political instability (-22 points), while other regions report improvements (+10).
Comparison of economic resilience 2025
- USA: Growth 1.5%, but inflation 3.2%, high debt, political uncertainty
- Germany: Stagnation 0.1%, low inflation 2.3%, but structural problems
- China: Export strength, but weak domestic demand, real estate crisis, local debt
Concentrated strength with systemic risks
The US economy functions as a dual system: A few economic powerhouses (California, Texas, New York, Florida) pull the country upwards and compensate for weaker regions. This concentration is reinforced by corporate relocations and demographic shifts.
The United States remains the most stable major economy internationally, but the combination of record-high debt, growing inequality, and political polarization creates medium-term vulnerabilities. While other developed countries struggle with stagnation, the United States benefits from its size, diversity, and the ability of individual states to dynamize the entire economy.
The regional economic engines (especially California and Texas) will continue to be decisive in the future – their innovative strength, demographic development and political framework conditions will significantly determine the overall economic performance of the USA.
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