Business Insider makes a number of errors in its analysis of Texas’ budget deficit. We’ll take the major one first: “…the state is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion.” Actually the two-year budget is around $185 billion. On a minor note, it says “…the new GOP mega-majority in Congress is firmly against raising any revenue.” That may be true, but I think they meant the Legislature.
However, the main point of the article isn’t far off:
So why haven’t we heard more about Texas, one of the most important economy’s [sic]Â in America? Well, it’s because it doesn’t fit the script. It’s a pro-business, lean-spending, no-union state. You can’t fit it into a nice storyline, so it’s ignored. But if you want to make comparisons between US states and ailing European countries, think of Texas as being like America’s Ireland. Ireland was once praised as a model for economic growth: conservatives loved it for its pro-business, anti-tax, low-spending strategy, and hailed it as the way forward for all of Europe. Then it blew up.
I doubt Texas will blow up. But there’s no doubt that cutting ten percent or more of spending is going to leave a lot of blood on the floor. Good thing Rick Perry got his book out in November while nobody was looking. I do wonder how his $4.2 million grant to David Nance fit in with the state’s new austerity needs.
