Aid Is a Bumper Crop for Farmers
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One week before the presidential election, it passed a new $1.8 billion disaster bill to assist farmers hurt by bad weather. Two others followed in subsequent years, totaling more than $6 billion. Today, after a searing drought in the Plains, farm-state legislators are pushing for billions more in aid.
The result is that farmers often get paid twice by the government for the same disaster, once in subsidized insurance and then again in disaster assistance, a legal but controversial form of double-dipping, a Washington Post investigation found. Together, the programs have cost taxpayers nearly $24 billion since 2000.
Some politicians talk as though they respect capitalism. They claim to reject taxing people just to give that money to others. Yet they continually increase the debt (taxing our children and grandchildren) and make payments to corporations, farmers and others for no reasonable purpose, other than buying votes. In addition to payments to farmers the government pays those who build million dollar beach house when the predictable storm knocks them down. No rational capitalist or economist would support such behavior (a political consultant might if when voters reward those that buy votes with taxpayer money, which seems to be the case now).
Do you think the politicians decide that the market should punish those that made bad decision and didn’t insure themselves? Nope, they take money from your children and grandchildren and give it to those that took risks without insuring them (often because they choose to do very risky things that would cost a great deal to insure - building expensive houses where they will undoubtably be knocked down for example). You might think those politicians would at least stop spending money they don’t have (remember the huge annual deficits) to pay people for losses that the government subsidized them to insure themselves against - but you would be wrong.
If the public wants politicians to support capitalism and not the current taxpayer subsidies to bad capitalists (those that make bad economic decisions) they need to vote out politicians that buy votes with subsidies to those that make bad economic gambles and then want the government to pay if things go poorly.
So choose to build house where they will be washed away and the government pays you when it is. Choose to farm bad locations and when it doesn’t work the government will pay you. I’m scared that the government might, but do you think if I just have a really dumb business idea and it doesn’t work I can ask the government to pay because my idea to save money on my warehouse by not having a roof resulted in all the goods being ruined when it rained? I hope they wouldn’t but given what they do now it is hard to say for sure that they wouldn’t.
American voters choosing to elect those that don’t care about economics (those that choose to tax children and grandchildren to buy votes today) is why the federal debt is so large. It is not because of politicians, but because of the actions voters choose to reward. If the voters choose to stop rewarding those who buy votes by raising taxes on children and grandchildren then the behavior would change. If not, we have to rely on getting a majority of politicians that choose to act in the best long term interest of the country out of duty or a sense of what is right: past experience shows this is unlikely.
Related: China and the Sugar Industry Tax Consumers - “Welfare” for the Rich - Building in Harms way - How Farm Subsidies Became America’s Largest Corporate Welfare Program - Growers Reap Benefits Even in Good Years
Comments
9 Comments so far
[...] This is not the way the story is normally told. Social Security is actually in good shape for at least 30 years. That doesn’t mean it is not a big problem after that but Brad Setser makes a good point that the huge increase in the rest of the debt has really made that problem seem minor. The main point? We need to fix the rest of the budget mess, and while I still think Social Security needs adjustment really that is not as important as fixing the rest of the spending money the government doesn’t have. [...]
[...] created policies of huge farm subsidies. We have commented on the bad economic practices before: Washington Paying Out Money it Doesn’t Have - More Government Waste - Pork Sugar - USA Sugar Industry Tax on Consumers. Here is an interesting [...]
“Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household…”
[...] words and I agree, as stated in: Washington Paying Out Money it Doesn’t Have and USA Federal Debt Now $516,348 Per Household. by curiouscat July 10, 2007 Tags: [...]
topsoil loss is a problem and that using corn for ethanol is more a federal government payoff to buy votes than a wise national policy…
[...] Charge It to My Kids Thomas Friedman makes the correct point that I have made previously (Washington Paying Out Money it Doesn’t Have - Inheritance Tax Repeal). Politicians like to tax your grandchildren to pay for what they are [...]
And when the system continually shows that bad practices are allowed to continue it makes it a very easy decision to not allow the import of meat. Why would a country want to import food from a system that fails to follow food safety standards…
Please stop. Don’t spend money you don’t have. Don’t think those political “leaders” that practice the same spending money they don’t have financial management are worthy of respect and don’t follow the bad example..
other countries are the ones making the larger efforts lately to invest in science and technology centers of excellence that the US was making in the 1960’s and 1970’s…