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Posted by on Jan 3, 2011 in Economy | 0 comments

The State Budget Problem You Never Hear About

What do Ireland and Texas have in common?   We know that California and New York have serious budget problems – no surprise they are after all liberal blue states.  What we don’t hear about is that Texas has just as many problems and perhaps even more since they spent very little money to begin with they have even less to cut.

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 don’t we hear about Texas?

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.

It just like the conservatives favorite European country until it collapsed a few months ago, Ireland.  According to the conservatives Ireland was the country the rest of Europe should copy – until it melted down of course.