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Rick Perry, closet Keynesian?

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How is Texas unlike other states? For one, as Republican Gov. Rick Perry likes to remind us, it’s added more jobs than any other state in the union since 2009. And, as this graph from the Center on Budget and Policy Priorities highlights, it’s also one of the few states that has managed to boost spending during the recession, instead of slashing:

The basic story goes like this: Thanks to relatively high property taxes and loose restrictions on building, Texas had a much less severe housing bubble than did other states. When many parts of the country were plummeting into recession in 2008, Texas was still growing.

It was only in 2009 that bleak conditions nationwide finally caught up with the Lone Star State, and sales-tax revenue started dropping. Fortunately for Texas, however, Congress had just passed a big stimulus bill, and Perry used $6.4 billion in federal money to smooth over the state’s growing deficit. Hence Texas hasn’t been forced to enact the same sharp budget cuts over the past three years that most other states have made.

Trouble is, that’s all about to change. Texas could only fend off its deficit woes for so long, and this year, faced with a $27 billion shortfall, Perry and the legislature opted for steep cuts to Medicaid and education over the next two-year budget cycle. Given that roughly half of all new Texas jobs in the last two years have come in the health care, education and government sectors, it’s a real question as to whether a newly austere Texas will keep creating jobs at its current pace.

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