HOW THE FEDERAL GOV’T CAN SCREW UP A FREE MARKET

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Posted on 28th December 2012 by Administrator in Economy |Politics |Social Issues

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If the politicians can fuck up a market as simple as the milk market, imagine what they will do to our healthcare market. These bozos interfere in free markets and then spend decades adjusting, manipulating, and fixing their original interference in the market. These morons are about to double the cost of milk because of their incompetence. I’m sure glad it won’t impact the middle and lower classes.  

First the Fiscal Cliff, Now the Dairy Cliff

ByJames GreiffDec 28, 2012 4:18 PM ET

You think going over the fiscal cliff might be a big deal? Wait until you get a dose of the dairy cliff.

Sad to say it but the arrival of 2013 may bring a doubling in the price of milk to as much as $6 to $8 a gallon, up from about $3.75. For this, you can thank Congress, which seems to have lost the ability to carry out its most basic functions, starting with passing legislation.

The source of the dairy cliff can be found in the failure of Congress to agree on a new farm bill, which is normally renewed every five years. Not this year, and the deadline for passing a new law expires Jan. 1.

The upshot is that the rules governing dairy price supports will revert to legislation adopted in 1949, forcing the government to purchase milk at elevated prices. With Washington soaking up milk, market prices would follow.

How does a law from 1949 lead to a doubling of milk prices? The law sets a floor for milk prices based on dairy production costs 63 years ago, when farms were much less efficient and mechanized than they are today. Add in adjustments for inflation and a few bells and whistles and out comes a formula that requires Washington to buy milk at roughly twice the current price. That works out to about $40 per hundredweight compared with $18.56 now.

Dairy farmers probably won’t mind. But everyone else down the dairy food chain would be affected, from consumers to cheese, butter and yogurt makers, who probably will resort to buying more imported milk to keep their costs in check.

This could all be averted if Congress passed a new farm bill that included a minimum price floor, like the one in the legislation about to expire. In recent years, with commodity prices at or near record highs, this floor has been lower than market prices for milk. Farmers could make more by selling their goods on the open market, and the floor never kicked in.

The deadlock over the farm bill has dragged on for half a year. The Senate passed a bill that included $23 billion of cost savings during the next 10 years. The House version contained $35 billion in savings, though that version never came to a vote because of opposition from members who sought more savings, mainly from the food-stamp portion of the bill.

The threat of reverting to the 1949 law is supposed to work just like the fiscal cliff — the combined $600 billion in tax increases and spending cuts if Washington can’t reach a budget deal before the new year. It seems neither has worked.

There is a lot not to like about the two proposed versions of the farm bill. A better alternative would be to end most government subsidies for the farm industry. But congressional inaction that leads to soaring milk prices is inexcusable.

SUGAR DADDY

9 comments

Posted on 17th June 2012 by Administrator in Economy

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Does anyone actually think the two parties that control our country have any intention of changing anything? They can’t even summon the courage to close a few hundred money losing post offices out in the boonies serving 20 people. The weasels in Washington like the existing system of doling out your tax dollars to corporations and other special interests in order to get campaign contributions and buy votes. They retain their power and wealth. You sink further into debt and poverty.

It is a bipartisan screw job. The story below confirms this fact. The Farm Bill is the gift that keeps on giving when it comes to congressional hypocrisy. Both Republicans and Democrats spout off about ending wasteful spending and cutting government bloat, until it comes down to voting to cut useless wasteful programs. You will be happy to know that your friends in Washington take $1.9 billion per year from you, hand it to massive sugar corporations, so you can pay a higher price for sugar. Simply brilliant!!!

This same government solution is applied to milk, soybeans, peanuts, corn , rice and a myriad of other farm products. They take your tax dollars and pay off massive corporate farm interests so you can pay higher prices.

Now for the ultimate hypocrisy. Marco Rubio the champion of Neo-Con Tea Party idiots everywhere, voted FOR this subsidy. It seems sugar is a big industry in Florida. I thought Rubio was against government waste and scorches Obama about cutting government spending. The Republican party and its slogans are a pathetic joke. Neither party has any intention to change anything. We need to burn this sucka down.

Sour vote on sugar

Saturday, June 16,2012

THE U.S. SENATE this week narrowly missed an opportunity to make progress in restoring fiscal sanity to Washington.

By a 50-46 vote Wednesday, the Senate defeated an amendment to the farm bill that would have phased out price supports and quotes to the sugar industry.

The federal government has imposed controls on the domestic sugar market for at least 80 years, and the modern structure of statist sweeteners was implemented in 1981. Uncle Sam guarantees a minimum price for domestic sugar through price supports (maintained through a loan system), restrictions on imported sugar and quotas on domestic production. In short, Washington ensures that the price of sugar remains relatively high.

Naturally, that has a negative impact on consumers and businesses that rely on sugar for their products. They all pay a higher price than what the open market would bear — about $1.9 billion more annually, according to The Government Accountability Office. In effect, they are being forced to subsidize sugar manufacturers who are protected from competition.

It’s not like the sugar growers are a bunch of Ma and Pa Kettles eking out a living. The GAO found that 42 percent of all sugar subsidies go to just 1 percent of sugar growers, most of them large, profitable companies.

THAT LEADS US to another deleterious effect of sugar policy: its impact on the environment. The artificially high sugar prices have encouraged expanded production in the Everglades, which has resulted in draining wetlands, damaging them with fertilizer runoff, and destroying the natural habitats of several species.

But hey, otherwise it’s a great program!

These facts haven’t changed in years, yet Big Sugar has been impervious to logic and common sense. Wednesday, it survived yet another attempt to remove an antiquated and unnecessary, corporatist program that reeks of centrally planned economics and which forces others to pay for it.

It’s disappointing, though not surprising, that Sen. Bill Nelson, D-Fla., voted for the status quo. That’s what he’s always done. He was joined by 31 other Democrats.

The real eye-opener, though, was the “yea” vote cast by Sen. Marco Rubio, R-Fla. He has wowed tea party conservatives with his inspiring rhetoric on changing the culture in Washington and reigning in exactly this kind of lumbering, big government stupidity. Yet, when faced with an opportunity to put his money where his mouth is, he chose parochial politics over principle.

SUGAR IS BY no means the only example of misguided agricultural policy. The Senate is debating a new five-year farm bill that includes subsidies, price supports, trade restrictions, etc. for such crops as soybeans, peanuts, corn and rice. Supporters are touting that the entire bill would reduce spending $23.6 billion over the coming decade.

Talk about peanuts. The entire framework of crop regulation should be scrapped. Fat chance of that happening, though. Rubio’s vote on the sugar amendment shows why it is so very difficult to make real change in Washington.

— The Panama City News Herald

FARMER FSA WADDLES UP TO THE TROUGH

13 comments

Posted on 13th June 2012 by Administrator in Economy

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Corporate Green Acres is the place to be. It seems the free shit army isn’t just occupying West Philly. They are crawling all over the Midwest farmbelt. It’s not your small family farm. It’s the giant corporate farms that have big time lobbyists and congressmen in their pockets. These bloated bills are nothing but handouts to corporations. Why should corporate farms be guaranteed a profit even if they don’t produce a crop? Why should I pay so that corporate fat cat farmers have no risk if their crops fail? Why should milk prices be controlled? Why should government be spending almost $100 billion per year of our tax dollars to promote and subsidize farmers in any way? Since the SNAP food stamp program falls under this bloated bill, maybe the West Philly FSA can join forces with the Iowa FSA to lobby for this bill.

 

Farm Bill Redux

Tuesday, June 12,2012

THE U.S. SENATE is poised this week to take up the crucial 2012 Farm Bill. This inordinately complex legislation is projected to cost $969 billion over the next 10 years, about $24 billion less than the cost of extending the soon-to-expire existing farm bill.

Big agriculture and its deep-pocketed lobbyists support the new bill, having accepted deep cuts in direct crop subsidies in exchange for legislators “protecting and strengthening” crop insurance programs. Industry considers the latter its safety net against adverse weather and unpredictable fluctuations of global commodities prices.

It’s less of a safety net than a security blanket that shifts risks to taxpayers and guarantees farmers substantial profits. That must change; otherwise, the cost of the new insurance programs could greatly exceed Congressional Budget Office estimates, leaving the federal government on the hook for billions of added dollars each year.

In a particularly cruel twist, the bill pays for these new programs in part by taking food out of the mouths of poor children.

Farm bills are the long-time home of the Supplemental Nutrition Assistance Program — food stamps. The proposal strips $4.5 billion from the SNAP program over 10 years, even as the struggling economy has record numbers of Americans seeking food stamps to help feed their families. The reductions would eliminate about $90 worth of groceries a month from the kitchens of low-income families. According to Sen. Kirsten Gillibrand, D-N.Y., who is introducing an amendment to restore the SNAP funds, half of those who benefit from the program are children.

The Obama White House is supporting the bill, S. 3240, sponsored by Sen. Debbie Stabenow, D-Mich., who chairs the Senate Agriculture Committee. The administration opposes the SNAP reductions, however, and wants the cost of crop insurance reduced.

MEANWHILE, AN odd amalgamation has emerged to oppose the bill. The liberal Environmental Working Group used U.S. Department of Agriculture data to reaffirm that corporate and very large individual agriculture operations — not small and mid-sized family farms — enjoy the vast majority of the insurance benefits. Last year in Missouri, for example, 74 percent of the $267 million in benefits went to 20 percent of recipients. In Illinois, the top 20 percent received 72 percent of $518.5 million.

From the right comes the American Enterprise Institute with its “Field of Schemes” report. It’s part of a broader AEI project called “American Boondoggle: Fixing the 2012 Farm Bill.” In “Schemes,” AEI experts focused on the bill’s proposed ‘shallow losses” insurance. Such insurance would cost far more than the direct crop subsidy programs being dropped and “create incentives for the wasteful use of economic resources,” the report says.

EXISTING CROP insurance programs already are out of whack. If crop yields fall short of projections, farmers collect from the government. If harvest prices fall short of projections, farmers collect. To make sure that farmers can afford the insurance premiums, the government pays an average of 60 percent of the cost. To make sure private companies offer the insurance, the government pays their commissions and administrative costs.

Expanded shallow-loss coverage would distort the system even further. As one Minnesota farmer told “The New York Times” last week, “I can farm on low-quality land that I know is not going to produce and still turn a profit.”

The farm bill needs a lot of work before it merits the support of the American people.

— The St. Louis Post-Dispatch