Texas's Busted Budget Shows Failure of GOP Theory

To all appearances, things were going great in Texas until recently. Gov. Rick Perry even boasted of a surplus in the billions in his re-election run. For conservatives, it was a shining example of good fiscal practice: never raise taxes; use only spending cuts to balance the budget. Now, though, the state faces a potential $25 billion deficit over two years, writes Paul Krugman in the New York Times. Suddenly, Texas’s budget theory isn’t looking so good—yet Washington conservatives are using it as a “role model.”

“The truth is that the Texas state government has relied for years on smoke and mirrors to create the illusion of sound finances,” Krugman writes. It got away with claiming a surplus because its last budget was set down “before the depth of the economic downturn was clear.” Let’s face facts as DC tries to trim the deficit: If “the modern conservative theory of budgeting” can’t make it in Texas, “it can’t make it anywhere.”
(More Paul Krugman stories.)