The popular and cool thing to do nowadays is to slash state budgets. Government haters from sea to shining sea are practically dancing in our crumbling streets over it. After all, it will force lower taxes and a streamlined government that won't have the kind of serious budget problems that states like Oregon and California have, right?
Not so much.
there's one state, which is fairly high up on the list of troubled states that nobody is talking about, and there's a reason for it.
The state is Texas.
This month the state's part-time legislature goes back into session, and the state is starting at potentially a $25 billion deficit on a two-year budget of around $95 billion. That's enormous. And there's not much fat to cut. The whole budget is basically education and healthcare spending. Cutting everything else wouldn't do the trick. And though raising this kind of money would be easy on an economy of $1.2 trillion, the new GOP mega-majority in Congress is firmly against raising any revenue.
So the bi-ennial legislature, which convenes this month, faces some hard cuts. Some in the Texas GDP have advocated dropping Medicaid altogether to save money.
So why haven't we heard more about Texas, one of the most important economy's 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.
We can bicker over the similarities and differences of Texas v. Ireland on economic policy, but there's a salient point here not to be missed: low taxes, loosey-goosey regulation and austerity spending might spark economic growth for a short period, but like a drunken sailor forced to face the light of day, there's a long-term price to be paid. Economies get worse under austerity, not better.