Paul Krugman Is Very Worried About Texas

Speaking of the great state o' Texas's $25-billion budget shortfall ...

Clearly, there are many Get Him to the Greek fans amongst the Friends of Unfair Park who've spent the better part of the morning filling the in-box with a copy of actor and Nobel Prize-winner Paul Krugman's piece in today's New York Times: "The Texas Omen." In it, the economist asks the question: If Texas is so recession-proof, then, like, what the hell? Didn't Governor Rick Perry say in that campaign ad back in February that "we have billions in surplus"? Yeah, he sure did. So, Texas, WTF?

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?

Now what? I'm gonna see if Schutze'll let me borrow his shotgun, that's what.

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