According to the Congressional Budget Office, the federal government posted a $293 billion deficit in the first fiscal quarter of 2013, setting the Obama administration up for a record fifth year of trillion-dollar deficits. As a result, the Treasury Department has already reached its legal borrowing limit, and unless Congress raises the limit again soon, economic chaos could ensue.
Meanwhile, down in Texas, legislators are facing a polar opposite problem: They have to figure out what to do with a $8.8 billion surplus. How did Texas manage to roll up that kind of financial cushion, especially considering that just two years earlier, the state faced a $27 billion deficit? Not by raising taxes or boosting spending. Texas made deep and difficult spending cuts to favorite government programs, including education. It didn’t raise taxes, and it didn’t chase the environmental movement’s dream of a new energy economy.
Instead, Texas went about minimizing regulations and taxes in an effort to make it the most business-friendly state in the nation. It also unleashed the private sector on the state’s natural resources, producing a natural gas and oil boom that is producing both jobs for Texans and royalty revenues for state government.