Straus’s structural deficit

Speaker Joe Straus is still out building his offensive against Texas taxpayers next legislature. Texas Public Radio interviewed Straus and printed the story in which the speaker discusses our structural deficit, which is a fancy way of saying that we have more government than we can afford.

There are two ways to make state money and state expenses match up. One is to collect more money, which we know always depresses economic growth. Generally avoiding doing this is why Texas is weathering the recession better than every other state.

The other way to fix the problem is to cut state expenses, which hasn’t even been tried yet, mostly because our speaker cannot allow this to happen. Why? Because anyone asking for a special deal from the other legislators simply cannot challenge anyone else’s special deal. He needs the votes of the other guys protecting other special deals.

Straus is from one of the few constitutionally protected-from-competition racetrack families, and he wants the rest of the legislators to vote him an even better deal. In this situation he simply cannot be a speaker who reduces spending. This is why he is campaigning right now to build an appetite in Texas to raise revenues.

This goes to the heart of the difference between business (crony) conservatives and life and liberty conservatives, groups known in Texas as “the leadership” and “the conservatives”. Both groups call themselves conservatives on the campaign trail but they mean very different things.

Supply-side economics says that lower taxes and regulations will spur economic growth and result in higher tax revenues due to a bigger economy. President Reagan famously made the point that to cut a college kid’s overspending you must cut his allowance. He was right, though there are couple more steps needed to curb the college kid’s spending.

First, you need a balanced budget requirement, which our state has and the federal government does not have. Otherwise, the college kid is flush with credit cards.

But even a balanced budget requirement is not enough. Right now our state government can buy on layaway. They did this last legislature by simply not funding seven months of Medicaid, which will cost about $5 billion – a problem they have now tacked on to the considerable budget problems we’ll have next session.

In order for President Reagan’s good advice about cutting the allowance of an overspending child to work, we have to shred the credit cards and keep him from buying on layaway.

We also need to make it harder for transactions in the first place. This is where spending limits come in.

We need to force him to cut useless spending, like the online monthly subscriptions he periodically signs up for late at night. This is where zero-based budgeting comes in.

Texans are still just waking up to the primary importance of good leadership. Structural conservative reform is structurally impossible without it, which Speaker Straus’s campaign to raise the Texas appetite for new revenues underlines.

–TPR Straus story/interview