The country's two largest economies - California and Texas - are ironically its most ideologically contradictory. While California maintains a highly regulated and socially-invested policy, Texas touts a system of low taxes and limited government intervention.
However, the two rivals are also facing massive budget crises to which only California seems to be getting media attention. In a recent article for Business Insider, Joe Weisenthal and Gus Lubin argue that California's $28 billion deficit has been used as a symbol of the country's budgetary woes, while Texas' equally challenging $24 billion shortfall has been largely ignored.
If anything, Texas may face a more difficult challenge, as the state's constitutional limitation on taxes excludes a substantial source of revenue.
"If you want to make comparisons between US states and ailing European countries, think of Texas as being like America's Ireland," wrote Weisenthal and Lubin. "Ireland was once praised as a model for economic growth: conservatives loved it for its pro-business, anti-tax, low-spending strategy, and hailed it as the way forward for all of Europe."
"Then it blew up," they added.
Still, others are quick to point out Texas' relatively mild symptoms from the recession, acknowledging its unemployment rate - 7.9 percent - is well below the national average of 9.8 percent. There is also the comparatively robust real estate market - an industry that was nationally decimated.
While debate continues, most Texans are sticking to their philosophies, proclaiming the time is right to incorporate in Texas.
Tags : ca, small business management, taxes, tx
Posted: Jan 5th, 2011