Paul Krugman raises the question in the headline and answers it: Children.
Sure. Education. Higher education. Health care. In Arkansas, they eat up an enormous percentage of the budget. When spending is constrained, the beneficiaries feel it. (There are some older folks in that health care category, naturally.) He uses the "Texas miracle" by way of illustration:
But here’s the thing: While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.
And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.