Final answer:
The public debt of Texas grew despite efforts to balance the budget due to legacy deficit spending, increasing interest payments, and challenges in stimulating economic growth. Increases in public debt during peaceful times, like those seen in Reagan's era, and inadequacies in revenue sources contributed to this persistent problem.
Step-by-step explanation:
Why Public Debt Continued to Grow Despite Attempts to Balance the Budget
The public debt of Texas continued to grow in spite of attempts by Houston to balance the budget for several reasons. Previous administrations tolerated deficit spending, which is the practice of borrowing money to cover government overspending within a specific year. While in some historical contexts, such as during wars or financial crises, this spending was deemed acceptable, this was not the case during the eight years of Reagan's presidency. Yet, the debt increased significantly during this period.
Additional factors compounding the issue included the growing interest payments on the debt, which became one of the largest non-defense-related federal expenditures. Thus, any effort to reduce the national debt was hamstrung by the need to first balance the budget and pay down these interest obligations. Factors such as a lack of investor confidence, economic downturns, or large societal shifts also played roles in complicating debt repayment and the ability to stimulate economic growth.
An example from earlier American history is the struggle of the Confederation Congress post-war to meet its financial obligations due to the absence of a stable revenue stream. Subsequently, the government borrowed more just to make interest payments, similar to the later predicament faced by Texas. The accumulation of debt and the challenges in servicing it illustrate the difficulties faced by governments in managing public finances.