Riding the wave of a natural resource boom, and a very tax friendly atmosphere – the state of Texas has passed New York over the past decade to take the second place spot (behind California) as the largest economy in the U.S. While there are some major issues in Texas such as incredibly poor K-12 scoring (which in theory could be blamed in part on lack of revenue allocating to education), this would really only hurt Texas in the long run if the state were a closed system – i.e. the children of Texas were the only ones available to employers. Instead, with 49 other states (and immigrants) available to the state, they are running a quite smart strategy. If Mr. Perry throws his hat into the GOP presidential pool, expect to hear a lot about the dichotomy between economic growth and education/health in his state.
Other than Virginia, which is engulfed by the tsunami of federal spending, Texas was far and away the most impressive grower over the past decade amongst the 10 largest states. To put these numbers in perspective, CA’s economy would be 8th largest in the world, just after Brazil & Italy, while Texas would be roughly tied with Australia at 12th.
Obviously the 1 state depression continues in Michigan.
Via USA Today:
- Texas became the USA’s second-largest economy during the past decade — displacing New York and perhaps heading one day toward challenging California — in one of the biggest economic shifts in the past half-century.
- The dramatic realignment of the nation’s economy was illustrated by North Carolina, Virginia and Georgia all overtaking one-time industrial powerhouse Michigan in economic size from 2000 to 2010. The economic winners of the last decade are states that focus on raw materials, government and senior citizens. The big losers are places that make things — industrial states and even California.
- Texas notched one of the biggest increases in size in a half-century, surpassing $1 trillion in annual economic output. The state gained nearly a full percentage point in its share of the U.S. economy during the decade, reaching 8.3% in 2010. This growth in economic clout has been matched only twice in the past 50 years — by California in the 1980s and Texas itself during the 1970s oil boom.
- Florida’s share of the national economy grew more than any state except Texas as seniors took their wealth south. But it was the long-booming state’s smallest growth of any decade since the government began keeping track in the 1960s.
- The federal government-fueled suburbs of Washington, D.C., led Virginia and neighboring Maryland to a decade of prosperity.
- Michigan and Ohio were the only states to end the decade economically smaller than when it began.
This is a guest post written by Trader Mark who runs the blog Fund My Mutual Fund.