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Wednesday, July 01, 2015

How GOP Turned TEXAS into GREECE - Beware Politicians Bearing IOU's

The big news is that GREECE, a member of the EU with heavy debts, is in default and the financial ripples hit Wall Street with a 350 point drop.  

What is less known is that Texas Republican leadership has done to Texas what Greece's leaders have done -- cut taxes and then borrowed BILLIONS to make up for the short-fall.They are punishing future generations and sticking them with the bill.  After awhile that house of cards comes tumbling down. 
                                                                Above: Greek debt and Texas debt: same problem

According to this article in the Texas Tribune Texas statewide debt is now $205 BILLION. "Of the 10 most populous states, Texas has the second-highest amount of local debt per resident, at $8,627, according to the Bond Review Board. Only New York has a higher local debt per capita."

Instead of paying cash for its roads, the GOP borrows the money. As Gov. Mark White once said to me "When we built roads they were paid for when the cement dried."  Not so under the GOP, which has pushed those expenses off to counties and cities --and the next generation.

The Tribune article explains: "Cities are expected to be doing more of the state’s old jobs like building roads and reservoirs,” said Bennett Sandlin, executive director of the Texas Municipal League. “It is a bit hypocritical in that regard.”

 If Texas were a country its GDP would rank it about 12th - about $1.6 Trillion, the same size as Canada. Greece would rank 26th with a GDP of $355 billion (about the same size as Dallas-Ft. Worth).  So basically, Texas has the means to be debt free that smaller Greece does not. The problem is that our leadership is doing just what Greece's leaders did - drop tax collections and roll up debt.  

Here is an example of the problem if we just talk about roads, from a Texas A&M report

"Over the past 40 years, our population has more than doubled – up by 125 percent. The number of cars and trucks on the road has almost tripled. And the number of miles those cars and trucks travel has more than tripled. Over the same time, our roadway capacity has grown only modestly—by 19 percent. We have too much demand for roadway space and not enough supply. It’s that simple."

Texas current population of 26 million is expect to top 40 million by 2040! How will we be prepared when our legislature pretends we can grow using a budget that cuts funding for education, transportation, etc?

Then there is the education issue mentioned in the Dallas Morning News: "Texas is “on the brink of squandering” its demographic edge of having a youthful and growing population by not investing enough in education, especially for its large Hispanic population, Tienda said. That in turn, could put at risk the quality of the state’s workforce in the future, she said."

Is Texas the next Greece? If it weren't for federal funds, Texas would be in a crisis like Greece today. yet it continues to squander money, such as spending $800 million to send our national guard to the border to sit and watch the border patrol, which is having its slowest year of crossings in history. That's nearly a $1 billion dollars wasted that could have beefed up our underfunded schools and pot holed roads.

By refusing to expand Medicaid, Texas is costing its taxpayers $100 BILLION that would have been paid by the feds. Instead, people are not getting care and local counties are stuck with the costs. In the old days, wasting $100 billion would have been a hanging offense. Either voters don't "get" the irony here, or they just haven't paid attention to the "borrow and spend" economics masquerading as fiscal sanity in Austin.

Let's face it: Texas couldn't afford to secede if it really wanted to. Voodoo economics has run up the state credit cards. Sooner or later Greece and Texas will have to collect enough taxes to pay for the roads and schools we need to compete in this high tech global economy. Unlike Greece, Texas will double in size - standing still in building infrastructure is not an option, unless you like 24/7 traffic delays. 

Running up our debts to pay for necessities like highway construction and maintenance is not sustainable. Nor is it smart.  At least under Gov. White, we paid our bills as we went. 

If you see a Trojan Horse sitting outside the capitol in Austin, beware of Greeks and the GOP bearing IOU's. It could produce a nasty surprise.



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