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Buzz
01-07-2011, 03:10 PM
I know this is probably y'alls favorite economist and columnist at the liberal New York Times. So, I was interested in hearing your comments on this.

http://www.nytimes.com/2011/01/07/opinion/07krugman.html?partner=rssnyt&emc=rss


The Texas Omen
By PAUL KRUGMAN
Published: January 6, 2011

These are tough times for state governments. Huge deficits loom almost everywhere, from California to New York, from New Jersey to Texas.

Wait — Texas? Wasn’t Texas supposed to be thriving even as the rest of America suffered? Didn’t its governor declare, during his re-election campaign, that “we have billions in surplus”? Yes, it was, and yes, he did. But reality has now intruded, in the form of a deficit expected to run as high as $25 billion over the next two years.

And that reality has implications for the nation as a whole. For Texas is where the modern conservative theory of budgeting — the belief that you should never raise taxes under any circumstances, that you can always balance the budget by cutting wasteful spending — has been implemented most completely. If the theory can’t make it there, it can’t make it anywhere.

How bad is the Texas deficit? Comparing budget crises among states is tricky, for technical reasons. Still, data from the Center on Budget and Policy Priorities suggest that the Texas budget gap is worse than New York’s, about as bad as California’s, but not quite up to New Jersey levels.

The point, however, is that just the other day Texas was being touted as a role model (and still is by commentators who haven’t been keeping up with the news). It was the state the recession supposedly passed by, thanks to its low taxes and business-friendly policies. Its governor boasted that its budget was in good shape thanks to his “tough conservative decisions.”

Oh, and at a time when there’s a full-court press on to demonize public-sector unions as the source of all our woes, Texas is nearly demon-free: less than 20 percent of public-sector workers there are covered by union contracts, compared with almost 75 percent in New York.

So what happened to the “Texas miracle” many people were talking about even a few months ago?

Part of the answer is that reports of a recession-proof state were greatly exaggerated. It’s true that Texas job losses haven’t been as severe as those in the nation as a whole since the recession began in 2007. But Texas has a rapidly growing population — largely, suggests Harvard’s Edward Glaeser, because its liberal land-use and zoning policies have kept housing cheap. There’s nothing wrong with that; but given that rising population, Texas needs to create jobs more rapidly than the rest of the country just to keep up with a growing work force.

And when you look at unemployment, Texas doesn’t seem particularly special: its unemployment rate is below the national average, thanks in part to high oil prices, but it’s about the same as the unemployment rate in New York or Massachusetts.

What about the budget? The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances in the face of a serious “structural” budget deficit — that is, a deficit that persists even when the economy is doing well. When the recession struck, hitting revenue in Texas just as it did everywhere else, that illusion was bound to collapse.

The only thing that let Gov. Rick Perry get away, temporarily, with claims of a surplus was the fact that Texas enacts budgets only once every two years, and the last budget was put in place before the depth of the economic downturn was clear. Now the next budget must be passed — and Texas may have a $25 billion hole to fill. Now what?

Given the complete dominance of conservative ideology in Texas politics, tax increases are out of the question. So it has to be spending cuts.

Yet Mr. Perry wasn’t lying about those “tough conservative decisions”: Texas has indeed taken a hard, you might say brutal, line toward its most vulnerable citizens. Among the states, Texas ranks near the bottom in education spending per pupil, while leading the nation in the percentage of residents without health insurance. It’s hard to imagine what will happen if the state tries to eliminate its huge deficit purely through further cuts.

I don’t know how the mess in Texas will end up being resolved. But the signs don’t look good, either for the state or for the nation.

Right now, triumphant conservatives in Washington are declaring that they can cut taxes and still balance the budget by slashing spending. Yet they haven’t been able to do that even in Texas, which is willing both to impose great pain (by its stinginess on health care) and to shortchange the future (by neglecting education). How are they supposed to pull it off nationally, especially when the incoming Republicans have declared Medicare, Social Security and defense off limits?

People used to say that the future happens first in California, but these days what happens in Texas is probably a better omen. And what we’re seeing right now is a future that doesn’t work.

Steve Hester
01-09-2011, 10:34 PM
Well, I've never been a Rick Perry fan, but the idiot who ran against him was much worse.

dnf777
01-10-2011, 02:38 AM
Very interesting Buzz.
Its amazing how the liberal media has really been pretty hush-hush on this issue.
I saw a page 4-D editorial on this, and that's it.
We'll see how this pans out in due time, I suppose.
Thanks for bringing to light.

subroc
01-10-2011, 04:13 AM
a response article:

http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

dnf777
01-10-2011, 05:01 AM
a response article:

http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

Its Obama's fault!!

Hew
01-10-2011, 07:31 AM
Its Obama's fault!!
Didn't have time to read the article, eh?

dnf777
01-10-2011, 10:28 AM
Didn't have time to read the article, eh?


I did. Did you? Perhaps you missed the part blaming Obama:

Rules changes associated with Obamacare will add about 71 percent to Texas’s Medicaid expenses over the first ten years of implementation — that’s Texas’s out-of-pocket expense, not money that the feds reimburse under Medicaid — an increase that quite literally threatens to bankrupt the state.


Like I said, Its all Obama's fault.

cpj
01-10-2011, 10:43 AM
You can't blame the president when clearly its Sarah Palin's fault.

dnf777
01-10-2011, 11:47 AM
You can't blame the president when clearly its Sarah Palin's fault.

Sarah has NOTHING to do with this. Or any other substantial issues, for that matter.

cpj
01-10-2011, 12:05 PM
It is Sarah's fault. Also, if you are having some issues with your dog at events or in training, well, they're Sarah's fault too.

dnf777
01-10-2011, 01:30 PM
It is Sarah's fault. Also, if you are having some issues with your dog at events or in training, well, they're Sarah's fault too.

Hey, I think she's GREAT!

So much, so, I'm going to give up my independent status just so I can vote for her in the primary! She'll be a wonderful candidate on the republican ticket.

road kill
01-10-2011, 01:57 PM
Hey, I think she's GREAT!

So much, so, I'm going to give up my independent status just so I can vote for her in the primary! She'll be a wonderful candidate on the republican ticket.

I am just hoping your side stays with Obama!!!
If they bring in Hilary, they might win.


RK

dnf777
01-10-2011, 02:03 PM
I am just hoping your side stays with Obama!!!
If they bring in Hilary, they might win.


RK

Not my side. I didn't vote for him. But I think yer right.
I think his chances of re-election hinge on how the public percieves his leadership with the opposition congress, and moreso, how the overall economy does. Right now, I'd give him slightly below a 50-50 chance.

road kill
01-10-2011, 02:08 PM
Not my side. I didn't vote for him. But I think yer right.
I think his chances of re-election hinge on how the public percieves his leadership with the opposition congress, and moreso, how the overall economy does. Right now, I'd give him slightly below a 50-50 chance.

That's all that matters anymore.

My wallet and ME!!!!



RK

Hew
01-10-2011, 02:34 PM
I did. Did you? Perhaps you missed the part blaming Obama:

Rules changes associated with Obamacare will add about 71 percent to Texas’s Medicaid expenses over the first ten years of implementation — that’s Texas’s out-of-pocket expense, not money that the feds reimburse under Medicaid — an increase that quite literally threatens to bankrupt the state.


Like I said, Its all Obama's fault.
You're either disingenous or a moron if you actually read the article and gleaned from the one single, solitary sentence above that mentions Obama that blaming him is a significant component of that article.

Buzz
01-10-2011, 02:34 PM
a response article:

http://www.nationalreview.com/exchequer/256614/no-paul-krugman-texas-not-broke

From the article you linked:


They haven’t delivered yet, but Perry’s Republicans did the stand-up thing last time around and reaped the rewards. Expect them to do it again.

And it may not be all that hard: Pace Krugman et al., Texas’s potential shortfall probably is not $25 billion. The inside guys talk about $11 billion to $15 billion, spread out over a two-year budget. (Texas writes one budget every two years, and has a legislature that meets every two years.) Even the liberal bedwetters over at the Center for Budget and Policy Priorities expect the budget hole to amount to about 10 percent of the whole enchilada, as compared to more than 50 percent in basketcase California.


But it seems that those higher estimates might be a little more accurate.



After Lecturing D.C. On His ‘Prudent Fiscal Decisions,’ Perry’s Deficit More Than Twice What He Thought
Back in September, Gov. Rick Perry (R-TX) guessed that his state was facing a $10-11 billion budget shortfall for its fiscal 2012-2013 budget, and refused to entertain reports that his budget gap might be larger until he received the state Comptroller’s official report. He even poo-pooed pronouncements from his 2010 election opponent, Houston Mayor Bill White, that Texas’ deficit may be twice what he was estimating. “If [White] wants to be the budget forecaster for the state of Texas, that’s a different job,” Perry said. “It’s called the comptroller.”

Well, the Comptroller released its report today, and Perry had it wrong:

Texas is expected to collect $72.2 billion in taxes, fees and other general revenue during the 2012-13 budget, down from the $87 billion used in the current two-year budget, Comptroller Susan Combs announced Monday. That puts the shortfall at $27 billion given that maintaining services would run $99 billion for biennium

dnf777
01-10-2011, 03:24 PM
You're either disingenous or a moron if you actually read the article and gleaned from the one single, solitary sentence above that mentions Obama that blaming him is a significant component of that article.

Or one other possibility. I'm just playing the same card your side does with Bush. A non-conservative can't criticize ANYTHING on the right without hearing echoes of "blame Bush....blame Bush..."

So now I'm just pointing out that everything seems to be Obama's fault now. Thought you'd agree.

JDogger
01-10-2011, 10:19 PM
Speakin' of comments from Texas, what's happened to Gibson?

"Oh Dad, poor Dad...
Momma's hung you in the closet, and I'm feelin' so sad."


JD

M&K's Retrievers
01-10-2011, 10:27 PM
Speakin' of comments from Texas, what's happened to Gibson?




JD

You might should check with the whistle blower

JDogger
01-10-2011, 10:36 PM
You might should check with the whistle blower

No one gets any one else in limbo, they do that all on their own. JD

M&K's Retrievers
01-10-2011, 11:35 PM
No one gets any one else in limbo, they do that all on their own. JD

What good is Abbott and Costello without Abbott? :rolleyes:

M&K's Retrievers
01-10-2011, 11:45 PM
No one gets any one else in limbo, they do that all on their own. JD

What good is Abbott and Costello without Abbott? :rolleyes:

Nor_Cal_Angler
01-11-2011, 12:12 AM
Should we be suprised....

Whats that saying....Everything is bigger in Texas...:p:p;);)

Cali doesnt have any extra lifejackets regards,

NCA

Hew
01-11-2011, 07:38 AM
Or one other possibility. I'm just playing the same card your side does with Bush. A non-conservative can't criticize ANYTHING on the right without hearing echoes of "blame Bush....blame Bush..."
I see. So you're just playing a game and don't really believe what you write? I guess it hard to hit 5k posts if you're typing stuff you actually believe instead of stuff to get attention. Don't let me stop your card playin'; carry on.

dnf777
01-11-2011, 07:54 AM
I see. So you're just playing a game and don't really believe what you write? I guess it hard to hit 5k posts if you're typing stuff you actually believe instead of stuff to get attention. Don't let me stop your card playin'; carry on.

Quite the contrary.
You're just finding out that your own medicine doesn't taste so good when its given back to ya.

Its Obama's fault.

road kill
01-11-2011, 08:18 AM
What good is Abbott and Costello without Abbott? :rolleyes:

What good is Andy without Barney???????:cool:


RK

ducknwork
01-11-2011, 09:02 AM
What good is Andy without Barney???????:cool:


RK

Or the Teletubbies without Tinky Winky?

duckheads
01-11-2011, 10:06 AM
No one gets any one else in limbo, they do that all on their own. JD

I know the janitor doesn't have time to read all the BS on hear or even care to. So who are the little pansy azzes that keep running to tell mommy that boys are saying mean things to them on the play ground?

TxHillHunter
01-11-2011, 08:24 PM
I think a major point is being missed by some here....Texas WILL balance their budget for the next biennium, likely WITH the use of at least some of the Rainy Day Fund.....wow, there's a concept for governments of all sorts: Save some dollars when things are good, for when things get bad.

You can bad mouth the governor (I do!) and the state all you want, but those are two lessons I learned from my parents by the time I was 10; 1) Don't spend money you don't have, 2) Save a nice chunk of what you make for a day you can't see today.

Now, does that forced balancing of the book mean that there will be a reduction in services... YES! Will it impact some more than others....YES again! Brings up a 3rd lesson I learned awfully early in my years....Life Ain't Fair.

mjh345
01-11-2011, 10:12 PM
I think a major point is being missed by some here....Texas WILL balance their budget for the next biennium, likely WITH the use of at least some of the Rainy Day Fund.....wow, there's a concept for governments of all sorts: Save some dollars when things are good, for when things get bad.

You can bad mouth the governor (I do!) and the state all you want, but those are two lessons I learned from my parents by the time I was 10; 1) Don't spend money you don't have, 2) Save a nice chunk of what you make for a day you can't see today.

Now, does that forced balancing of the book mean that there will be a reduction in services... YES! Will it impact some more than others....YES again! Brings up a 3rd lesson I learned awfully early in my years....Life Ain't Fair.

Great post!! However if you keep showing common sense you won't be welcome around here

ducknwork
01-12-2011, 06:19 AM
Great post!! However if you keep showing common sense you won't be welcome around here

That's right, the lefties will run you out in a heartbeat!

Buzz
01-12-2011, 08:22 AM
I think a major point is being missed by some here....Texas WILL balance their budget for the next biennium, likely WITH the use of at least some of the Rainy Day Fund.....wow, there's a concept for governments of all sorts: Save some dollars when things are good, for when things get bad.

You can bad mouth the governor (I do!) and the state all you want, but those are two lessons I learned from my parents by the time I was 10; 1) Don't spend money you don't have, 2) Save a nice chunk of what you make for a day you can't see today.

Now, does that forced balancing of the book mean that there will be a reduction in services... YES! Will it impact some more than others....YES again! Brings up a 3rd lesson I learned awfully early in my years....Life Ain't Fair.


We have a rainy day fund here in South Dakota. The legislature has yet to spend a penny of it. They have instead relied on cutting, the cuts have been deep. Even our Republican governor came out and said, paraphrasing - we saved that money for a rainy day. Well, it's raining outside. He was pretty frustrated with some of the cutting.

road kill
01-12-2011, 08:30 AM
Great post!! However if you keep showing common sense you won't be welcome around here

How would you know???:D

RK

TxHillHunter
01-12-2011, 01:51 PM
We have a rainy day fund here in South Dakota. The legislature has yet to spend a penny of it. They have instead relied on cutting, the cuts have been deep. Even our Republican governor came out and said, paraphrasing - we saved that money for a rainy day. Well, it's raining outside. He was pretty frustrated with some of the cutting.

Same thing may happen here....but with the "expert estimate" being so far off, my guess is we'll see half that $10B used over the next two years.

As for the thoughts of running me out of here....I'm pretty tolerant of differing opinions, as I'm somewhat of a political paradox myself. Not many folks out there share my opinions on abortion and capital punishment. Both parties have it wrong. :(