And it’s not just the first order consequences of lower oil revenues and reduced capital expenditures. There are substantial multipliers as that income gets ‘respent’ not only in Texas but throughout the US and beyond.

Again, seems most all US periods of expansion were assisted by ‘borrowing to spend’ that would have been avoided, including the s and l credit boom of the 80’s that drove the Reagan years, the .com/y2k boom of the late 90’s, the sub prime expansion 10 years or so ago, and now, maybe the shale credit expansion boom that looks to have delayed the recession that otherwise would have set in after the tax hikes and sequesters of 2013. Japan, on the other hand, has been careful to not allow that type of thing to happen ever since it’s regretted credit boom of the late 80’s…

Plunging Oil Prices Test Texas’ Economic Boom

Jan 7 (WSJ) — The Lone Star State’s economy has been a national growth engine since the recession ended, expanding at a rate of 4.4% annually between 2009 and 2013, twice the pace of the U.S. as a whole. One in seven jobs created nationally during the 50-month expansion has been created in Texas, where the unemployment rate, at 4.9%, is nearly a percentage point lower than the national average. Analysts at the Federal Reserve Bank of Dallas estimate that a 45% decline in the price of oil will reduce Texas payrolls by 125,000. Payrolls were up 447,900 in November from a year earlier, or 3.9%. The Dallas Fed estimate implies growth of more than 300,000, or nearly 3%, even with a lower oil price, still faster than the national average of 2%.