Texas Public Policy Foundation’s report entitled “How Big Government Hurts the Economy: Texas vs. California, a case study in jobs and prosperity” compares the outstanding achievements in many areas across Texas with the performance in California-and other states.
One key distinction between these top two economic states in the U.S.: Growth in Gross State Product (GSP).
GSP measures the total output of all final goods and services in a state and serves as one metric to evaluate a state’s economic prosperity. The figure below displays Texas’ and California’s GSPs as a share of U.S. Gross Domestic Product (GDP) over the 2001-2011 period.
During this period, Texas’ GSP grew 71.5 percent, making Texas the 7th fastest growing state in the nation. California, however, grew by just 46.2 percent, placing California 27th among all 50 states. To provide further clarity on the Lone Star State’s success, Texas’ share of U.S. GDP increased from 7.4 percent to 8.7 percent while California’s share remained unchanged at 13 percent.
These data highlight Texas’ outstanding ability to spur job creation in a dynamic economic environment with limited government, pro-growth policies.
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