Saturday, April 26, 2008

People love free money

If you thought this blog was about the "big Bush" tax rebates rushing into the hands of taxpayers nationwide, then you'd be wrong.

The title for this post is actually a quote from Senator Tom Harkin which was published by the International Hearald Tribune on April 24, 2008, in an article written by David M. Herszenhorn, titled:

On Capitol Hill, it's farm politics as usual - (link to full story)

Sen. Harkin must be feeling like a lone voice on Capital Hill, as he admitted there was not much he could do about the massive farm subsidies contained in the Farm Bill set to be passed at a cost upward of $300 billion because "I don't have the votes," adding, "People love free money."

My favorite quote actually appears earlier in the article, emphasized by me in this excerpt;
But even strong proponents of the bill, like Senator Tom Harkin, Democrat of Iowa and chairman of the Agriculture Committee, concede that farm interests are deeply entrenched and that there is little appetite for change among many farm state lawmakers, especially when it comes to the direct payment program.

The direct payments are based on the amount of land that certain farmers own, and Harkin, who has sought to eliminate the payments, said that many recipients of the money then use it to acquire more land and qualify for more payments.

"It's like the black hole in space that astronomers talk about, everything gets sucked in and nothing ever comes out," he said.

"This is the black hole of agriculture. It doesn't make sense, but farmers continue to get it."

Important points brought out in the article with respect to the new Farm Bill:

  • does little to address many of the most pressing concerns

  • will not change biofuel mandates that are directing more corn to ethanol and contributing to a global run-up in food prices

  • will do little to ease worldwide food shortages

  • demonstrated (by Ken Cook) that the farm subsidies it contains would mostly benefit a small number of wealthy crop producers

  • and, at a time of unprecedented volatility in the futures markets, it will not require tougher regulation

Indeed, many experts say the biggest step Congress could take would be to eliminate the direct payment subsidies in favor of a new revenue assurance program that would help farmers in times of need, but save money in boom years when crop yields are strong and prices high.

Let's pause and think about that comment a minute.

Did you happen to see this Globe & Mail news story out of Canada where Ottawa is planning to pay $50 Million for a swine kill owing to the massive surplus in the pork industry right now?
EDMONTON — In what is being called an unprecedented move, the federal government will pay Canadian pork producers $50-million to kill off 150,000 of their pigs by the fall as the industry teeters on the brink of economic collapse.

The animals are being destroyed at slaughter plants and on pig farms in a bid to cull the swine breeding herd by 10 per cent.

Most of the meat is to be used for pet food or otherwise disposed of, but up to 25 per cent of it will be made available to Canadian food banks.

“The value that the market is providing to hog farmers for their breeding animals has fallen to virtually nothing,” said Martin Rice, executive director of the Canadian Pork Council on Monday.

But, I digress.

Back to the Bush rebates (because I can't resist commenting on it)...

Recipients receiving their checks in the weeks ahead might want to think twice about using it to go on a shopping spree. Try checking out the product origins of the items you purchase and see how much of that money you'll actually be sending to China instead of helping to curb the recession here at home. Those "made in China" tags are mighty prevalent, wouldn't you say?

In my most humble opinion, I just can't resist applying someone else's quote to the situation.

"It's like the black hole in space that astronomers talk about, everything gets sucked in and nothing ever comes out."

But I don't want to go down that road of "torchture and politics" (link).


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