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Drought Burns a Hole in Taxpayers’ Wallets

Written by Gary North on August 3, 2012

Half of America’s counties are suffering from a major drought. The federal government has identified these counties as national disasters This means bailout money is on its way.

Bailouts are a way of life in a nation filled with national disasters. In fact, the bailout money helps creates them. The free market works. The federal government pays for victims of national disasters. Hence, there is an increasing supply of them.

Crop insurance, subsidized by the government, keeps farmers in high-risk parts of the country on their land. Actually, most farming is done by multinational agribusiness firms, but when a drought strikes, the media go looking for small farmers who are facing disasters. For 70 years, small farmers have served as “extras” for the long-running series of U. S. Department of Agriculture films, Old Macdonald Had a Farm.

What will the drought cost taxpayers in crop insurance payments? About $20 billion this year.

Ee-I, ee-I, IOU.

Urban residents pay higher prices for food during a drought: less supply. Demand stays high. So, the government steps in and provides below-market loans, funded by taxpayers and buyers of Treasury debt. This keeps people in debt in lines of work that they should abandon. Urban residents are then taxed to pay for loans. They get squeezed coming and going.

It’s the American way!

About 2% of Americans live on farms. They are kept there by the farm bloc in Congress, which sticks it good and hard to the other 98%. This is called democracy.

“How ya gonna keep ’em down on the farm, after they’ve seen Paree?” Simple. Pay them to stay on the farm.

I know what people will say. “Would you just sit there and let Conagra executives die?”

Yes, I would.

“Would you do nothing, while Archer Daniels Midland is burned to a crisp?”

Yes, I would.

The House passed a $383 million bailout for livestock producers, but the Senate failed to go along. Then Congress adjourned. The bill will be reconsidered when Congress reassembles in September.

Continue Reading on www.nytimes.com

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2 thoughts on “Drought Burns a Hole in Taxpayers’ Wallets

  1. sean murry says:

    this drought is making food prices to rise meat, dairy ,eggs are going up.

  2. A lot of these national disasters are due to government allowing infrastructure to crumble, even though billion$ in taxes are supposedly earmarked for their maintenance: levees, bridges, roads, irrigation systems, clearing brush and bulldozing firebreaks on public lands. Where is all the money going? Endless wars, Wall Street, banksters.