The Bureau of Economic Analysis (BEA) recently published a report showing Texas was the nation’s 8th fastest growing state in 2013. Despite falling from its 2nd place position last year, Texas’ real gross domestic product (GDP) growth in dollar terms was a remarkable 17 percent of total U.S. GDP growth from a state with only 8 percent of the nation’s population. Further, Texas’ economy grew in dollar terms by $49 billion, which is $15 billion more than the fastest growing top seven states combined.
This is yet another report highlighting the benefits of having no income tax, relatively modest government spending, and sensible regulations-otherwise known as the Texas model.
Specifically, Texas’ real Gross Domestic Product (GDP) increased by 3.7 percent to $1.4 trillion in 2013 making the state’s output 9 percent of total U.S. output adjusted for inflation. Not adjusting for inflation, the state’s nominal GDP is $1.5 trillion, also 9 percent of total U.S. nominal GDP. These values of the state’s economy are the second largest no matter how you dice it-real or nominal.
While this report shows that most states’ economy expanded in 2013, there was a widespread slowdown compared with 2012. The largest state economy is California measured in real ($2.1 trillion) and nominal ($2.2 trillion) dollars. The Golden State’s real GDP grew by only 2 percent last year, which ranks near the middle of the pack.
Out of the top ten largest states, Texas had the fastest growth rate. Though California is the largest state, its term at the top could be short-lived if Texas continues to grow faster from an economic environment that is conducive to economic prosperity and job growth for everyone.
To debunk the critics who claim that only low-paying jobs are created in Texas, this report shows that all sectors contributed to real GDP growth last year except state government. Non-durable goods manufacturing and mining led the way. Both tend to pay a high wage.
This report provides further evidence that economic prosperity is best achieved for those from all walks of life when the government gets out of the way.