Texas: How the state affects the US economy

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Civil War

Due to the recent conflict regarding migrants from Mexico, Texas activates Article 10, Section 3, Clause 1, Clause 3 of the US Constitution. The law now allows the state to declare martial law. Furthermore, Texas is allowed to disregard the government's opinion and do as it sees fit.

It turns out that Texas can now ask for help from other states - and even countries. Roughly speaking, in the matter of support, Texas now acts as an independent entity. It can bypass President Biden and not coordinate its actions with him.

Texas could be the beginning of a major conflict. Some states have already expressed their support and are ready to help Texas. However, even if a full-scale conflict is avoided, a political crisis is already inevitable. And politics is followed by economics.

A wave of migrants

This all started a relatively long time ago. Texas got into a dispute with Biden over the Mexican border: they were not satisfied with the huge wave of migrants. Nevertheless, on January 22, the Supreme Court recognized Biden's demands as fair. The authorities were given the go-ahead to remove the border fences.

The next day, the Department of the Interior demanded that the Texas National Guard allow federal security forces access to the refugee facility, but Governor Abbott refused to comply. He has increased fencing to, in his words, protect his state from an invasion of migrants from Mexico.

Support for Abbott on this issue is mixed. Some Texas Democrats are advising Biden to seize control of the Texas National Guard. Meanwhile, many Texas officials to the contrary are preventing Congress from allowing the US Border Patrol access to a park on the banks of the Rio Grande.

What Texas means for the economy

Texas plays a key role in the United States economy. One key factor is the state's dominance in the energy industry. Texas is one of the leaders in oil and natural gas production. Huge reserves and innovative technology have allowed the state to become a leading energy exporter, influencing global markets and providing a significant boost to the US economy as a whole.

Texas also boasts technology, manufacturing, and agriculture. The state is home to numerous Fortune 500 companies and serves as a center for innovation and entrepreneurship. Cities such as Austin, Dallas, and Houston have become major technology and business centers, attracting talent and investment from around the world.

Texas also plays a critical role in trade and transportation. The state's strategic geographic location along the U.S.-Mexico border and its extensive transportation infrastructure, including ports, highways, and railroads, facilitate the movement of goods both domestically and internationally.

Texas is a gateway for trade between the US and Mexico, contributing significantly to cross-border trade. Its ports, such as the Port of Houston, are among the busiest in the country, connecting the state to global markets and supporting the nation's overall economic competitiveness.

If Texas becomes independent

The implications for the United States could be severe and wide-ranging. One immediate consequence is disruption of economic stability. Texas, as discussed earlier, plays a key role in the US economy, especially in energy production, technology, and trade. The loss of such a significant contribution could lead to an economic downturn, increased unemployment, and market instability that would affect not only Texas, but the entire country.

Should Texas decide to declare independence or even war, the United States would face security challenges both domestically and abroad. The presence of military installations and defense infrastructure in Texas creates additional complexities, requiring redeployment and reallocation of resources to address the changing geopolitical landscape. Supply chain disruption, particularly in energy and manufacturing, could have cascading effects on industries across the country.

The nation will face issues of unity and identity, and the implications could extend to issues of citizenship and migration. The internal cohesion of the United States would be tested, and the federal government would face the daunting task of dealing with the aftermath.

Jonathan Rowe

Jonathan Rowe

The creator and main author of the site is Jonathan Rowe. Trader and investor with many years of experience. A graduate of the Massachusetts Institute of Technology with over a decade of experience developing applications for financial and investment institutions.

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