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Posted at 2:54 PM ET, 02/23/2011

Predicting state budget deficits in two graphs

By Ezra Klein

You might already have seen this graph John Sides drew up to test whether there is an obvious correlation between the strength of public-employee unions and state budget deficits. There isn't:

unionsanddeficits2-thumb-475x345-327.png

He's got some further graphs and commentary over at his place. If you use both state and local debt, you can perhaps see a weak relationship, but you have to be trying. But if you want a cleaner fit, do as Mike Konczal did and graph state budget deficits against negative equity, which serves here as a stand-in for the severity of that state's housing bubble.

budget_shortfall_housing.jpg

"The mechanisms for how this contributes is important," writes Konczal. "[I]s it the unemployment? Is it that state governments with a larger housing bubble got more confident and spent as if all those property taxes were on their way? Are there other important, casual mechanisms? These are all good and crucial questions for us to answer, ones we should take up when we finish scapegoating teachers."

By Ezra Klein  | February 23, 2011; 2:54 PM ET
Categories:  Charts and Graphs  
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Comments

It sure looks like there is in fact a correlation in the first one. If you drew a best fit line, as in the second graph, it would slope up.

But it's clear from the scatter that public union membership is a very small contributor to budget gaps compared to all other factors, so the point still stands.

Also, Nevada is such an outlier, it should probably be removed from the second graph. Or at least, one should examine what the correlation looks like without NV. It's still correlated, but probably much more weakly.

Posted by: sanjait | February 23, 2011 3:18 PM | Report abuse

Does anyone else think that the fact that the Whitehouse chooses this moment in history to stop defending DOMA means that they sense an upperhand in all of this? It is as if they are daring the Republicans to shut down the government and for more states to ignite angry protests at the state capitol.

Posted by: willows1 | February 23, 2011 3:47 PM | Report abuse

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