Monday, July 25, 2011

Is Texas way of reducing government spending a true way to recover the economy?


Economists insist that recession is officially over and it is now the time of recovery. However, most of the large states such as New York, California and Texas are still suffering under the short state budget, while deficits are increasing fiercely higher than ever. Different states use different methods to overcome these hard days and Texas is well known for their unique method of reducing government spending in dealing with the economy. However, I believe that there has to be an alternative to that method.
            Texas is a typical and almost the only state where government reduces their spending first instead of raising taxes to manage budget challenges. Keeping their tax increase rate at the lowest and reducing the government spending, Texas was able to handle the worst recession in 2001 and could remain better off than most of the other states. Texas was one of the largest contributor states for job creation during the recovery period following the 2001 recession. However, through another recession of recent years, Texas and their traditional method of reducing government spending is now being questioned for their efficiency and practicality.
            After 2003 and continuing through 2005, 2007 and 2009, there had always been economical recession period, and each time, Texas controlled the government spending. But in those years, Texas had to increase their government spending to meet with the needs of society. However, those decisions were only temporary solutions that could only push the problems not the eternal cures. Finally in 2011, Texas budget is suffering from its shortfall with the pushed problems from previous years. Now the government has decided to reduce their spending by cutting budgets not only for education and police departments but also the government jobs, which can cost more than 180,000 jobs lost with in the next two years. Reducing government spending is not curing the economy, but it is only increasing the economic burden on citizens.
            Even though controlled government spending along with remaining the taxes low and supporting for economic freedom may foster economic growth, but if current problems remain unsolved, that economic growth will be postponed and more problems will arise. Therefore, I believe there has to be more immediate response to the current problems faced by citizens in Texas. More and more budgets are going to be needed to supply for Medicaid also, and controlling budgets each time will only cause another problem in economy. Texas government should not lay the economic burden on citizens but instead, it should find another way to fix its economy.

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