Kevin Williamson’s takedown of Paul Krugman’s recent column crowing over Texas’s budget woes must be read in its entirety. But I’ll pull out four key points:
- Texas has astonishingly low taxes, and a substantial variance in its business cycle, so deficits in the budget projections do happen sometimes.
- But, Texas doesn’t use baseline budgeting. They use the radical budgeting system in which they look at how much money they have and decide how to spend it. Imagine that!
- Therefore, they will balance their budget as they always do, probably without touching Texas’s $10 billion rainy day fund.
- That’s right, Texas has a $10 billion rainy day fund.
I wish Pennsylvania had Texas’s problems.
POSTSCRIPT: Actually, to be fair, Pennsylvania used to have a rainy day fund. Our outgoing governor, Ed Rendell, blew the entire fund during his first year in office, before the recession hit.