"will Obama bail out California?"
Of course not. We don't need it. Maybe he'll bail out Texas, tho. That'll make me explode in anger, fer sure.
Budget Problems Deep in the Heart of Texas
dallasnews.com.
(Texas) Legislature likely to cut deep to meet possible $25 billion budget gap
AUSTIN – Texas faces a budget crisis of truly daunting proportions, with lawmakers likely to cut sacrosanct programs such as education for the first time in memory and to lay off hundreds if not thousands of state workers and public university employees.
Texas' GOP leaders, their eyes on the Nov. 2 election, have played down the problem's size, even as the hole in the next two-year cycle has grown in recent weeks to as much as $24 billion to $25 billion. That's about 25 percent of current spending.
The gap is now proportionately larger than the deficit California recently closed with cuts and fee increases, its fourth dose of budget misery since September 2008.
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I talked before about "Net Export Math" and government budgets, especially state & local. Just as oil exporting countries, showing falling production, generally have a net export decline rate that is in excess of their production decline rate, the pattern that we will tend to see is that the rate of decline in government aid and services to citizens will exceed the rate of decline in government revenue.
Take Texas as example, and let's assume two year projected spending of $100 billion versus projected revenue of $75 billion. For the sake of argument, let's assume that $50 billion in spending is non-discretionary and can't be cut. Under this scenario, a 25% reduction in revenue would result in a 50% reduction in discretionary spending (primarily aid and services to citizens).
westexas (Jeff Brown of Peak Exports fame) on October 25, 2010 - 9:30am theoildrum.com |
