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Commodities: How High-Income Welfare Creates Low-Income Welfare
Politicians have lots of devious tools at their disposal, and they're not afraid to use them. One of the most devious of these tools also happens to be the most popular: namely, to mix indefensible spending together with spending that only Scrooge, LordVoldemort, or Hitler would oppose.
Take, for example, the $300 billion, five-year "farm bill" now before Congress. It will reportedly pass with a veto-proof majority. Here is some of what the bill allows (quotes are from The Wall Street Journal):
- Farmers can "lock in price-support payments at the lowest possible market price, and then sell their crops later at the highest possible price, and then pocket the high price and a payment from the government for the difference between the two. They in effect get paid twice for the same bushel of wheat."
- A "new income limit [of $750,000] to qualify for subsidies," but which also "allows spouses to qualify for payments too," so that "farm owners with clever accountants can have incomes up to $2.5 million and still get a taxpayer handout."
- New programs "for Kentucky horse breeders and Pacific Coast salmon fishermen," and "your tax dollars will help finance the dairy industry's 'Got Milk?' campaign."
- Sugar plantation "owners in Florida walk away with the sweetest deal ... an increase in price supports and a guarantee of 85% of the domestic sugar market at these guaranteed prices."
There's more, but you get the idea. The farm bill is all the more objectionable in light of the fact that overall farm income has increased by 56% during the past two years, due mainly to the story told in this graph.
It's obvious that defending these farm "subsidies" would be no easy chore. But why defend them? Here's where the devious tool I explained above becomes so handy. Simply combine the farm subsidy legislation with a bill that includes more spending for items like school lunches, healthy school snacks, food stamps, and so on.
Problem solved. Anyone who publicly objects to welfare for millionaire landowners can now stand accused of wanting to take food from the mouths of hungry schoolchildren. You may be in the right, but suddenly you feel like the soldier trying to capture a terrorist who hides in the basement of a house full of women and children. Doing the right thing may come at a cost too great to pay.
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Lest this seem like an idle rant, I note that the latest economic data shows that food prices just saw the largest monthly rise in 18 years. Yet, the biggest beneficiaries of that rise will soon enjoy even greater transfers of wealth from the very consumer-taxpayers hurt most by rising food prices...
...Thanks to our public servants in Congress.
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