Monday, July 18, 2011

Rick Perry’s Texas Economic Miracle Was Built On Debt, Debt and More Debt

He Just Doesn’t Want Anyone to Know About It

The current governor of Texas and potential Presidential candidate Rick Perry is fond of talking about how well the economy of Texas has done under his low tax policy.  He is also fond of leaving out one important point.  Texas has borrowed heavily while Mr. Perry has been Governor.

For all the controversy over the national debt ceiling, here's a surprise: Since 2001, the debt load in conservative Texas has grown faster than the federal debt.

Texas has been borrowing more than most other states, too. And local entities, from cities to school districts to transit authorities, have been piling up even more debt. . .

"We're not a pay-as-you-go state and we're not averse to debt, as some people believe," said Eva DeLuna Castro, a senior budget analyst at the Center for Public Policy Priorities in Austin. "Maybe you're not paying for it now, but your children or grandchildren will."

Here is a nice chart from the folks at the Texas Bond Review Board on the growth of local debt in the last five years.
Texas Local Government Outstanding Debt - Five-Year Trends

And what about Mr. Perry's much celebrated 2011 budget battle where he covered a shortfall without raising taxes?

The borrowing isn't slowing. New issues expected for 2011 include $2 billion for transportation, $434 million for water projects and $235 million for cancer research. All those are paid from the state's general fund

So if Republican voters expect Mr. Perry to be a success in a White House run, they can also expect him to be a  spend and borrower President, as long as the spending isnt't on things like education and health care.   A spend-and-borrow President much like, you know, that other Texas Governor who was recently ensconced  in the White House.

From 2001 when Mr. Perry took office local debt has grown by almost $100 billion.  Another way of saying that is that since Mr. Perry took office he has run up deficits at the local level of almost $100 billion, but then Mr. Perry would not like it to be said that way, would he?

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