5 more years of farm welfare?

It appears that those in charge of reconciling the differences between the House and Senate versions of the Farm Bill will not be doing anything to reduce the obscene amount of welfare going to farmers.  Money “saved” by eliminating direct payments is being shifted towards more subsidies for crop insurance.  Senator Grassley’s effort to place a cap on the total welfare payments received by any one farmer appears to have been watered down at best.  Farmers have higher incomes and greater wealth than most citizens. They should pay the full cost of their crop insurance.  Now, lets hope that either the full House or Senate will vote this bill down.  We don’t need five more years of welfare for rich farmers.

Stop crop insurance subsidy!

Taxpayers subsidize about  60% of the premiums that farmers pay for crop insurance – regardless of how wealthy the farmer is, regardless of the income of the farmer, and regardless of whether or not the owner actually even works on a farm.  Crop insurance covers not only losses due to disasters, but it also covers losses due to low prices.  There is no ethical, moral, or food security reason why wealthy farm owners should be receiving any subsidy.  Most farms, like most other businesses, need disaster insurance.  But, there is no good reason why taxpayers should subsidize the premiums.  Farmers say they need a 5-year farm bill so that they can properly plan.  That is understandable.  Let’s let them plan on not receiving any subsidy on their crop insurance.

Food Stamp reduction is okay.

Republicans propose to reduce food stamp spending by $20 billion to $40 billion over the next 10 years.  As reported in the Des Moines Register, we currently (2012) spend about $75 billion per year, up from $ 15 billion in 2001.  The number of people receiving food stamps has gone from 17 million in 2001 to 46 million in 2012.   So, the number of people receiving food stamps has gone up 170% and the dollar amount has gone up 400%!  The $40 billion in proposed cuts over the next 10 years equals an average of $4 billion per year.  That is only a 5% cut from the current record high numbers.

Under the Republican proposal, many of those who will have their benefits cut have incomes that are too high to meet the normal food stamp guidelines.  Their states allows them to automatically qualify because they qualify for one or more other safety net programs.  Others who will have their benefits cut include able bodied individuals who fail to either work or attend job training for at least 20 hours per week.

Given the improving economy, declining unemployment, and our tremendous budget deficit, these cuts appear very reasonable.  How can we ever solve our budget deficit problems if we can’t make cuts like these?

Keep government out of long term care insurance.

The Register advocated for government operated long term care insurance in its lead opinion on 7/15/2013.  (“Long-term care policies need attention”)  We don’t need or want a government financed program for long term care insurance.  President Obama backed out of a government sponsored long term care insurance program when he felt unable to promise that government would not some day step in and require taxpayers to subsidize the plan.  We have Medicaid for the poor.  That is enough.  If anything, our government should encourage people to buy long term care insurance and/or to save for their own long term health care needs.  Instead, our government seems content to keep interest rates artificially low so that people will borrow and spend.  Low interest rates reduce the returns that insurance companies earn on their reserves, which in turn causes them to increase their long term care insurance rates.  Letting interest rates rise to their natural levels would be one of the best ways for government to help improve the incomes of seniors, and help hold down the cost of long term care insurance.

Register editorial: http://www.desmoinesregister.com/comments/article/20130715/OPINION03/307150025/The-Register-s-Editorial-Long-term-care-policies-need-attention

Still no reason to subsidize crop insurance

The opinion piece by Doug Stark on 3/24/2013 in The Des Moines Sunday Register gave several great reasons why crop insurance is important and beneficial to both farmers and our economy. (See: “Another View: Crop insurance stabilizes jobs and economy” link below.)  However, he did not give a single reason why taxpayers should subsidize the premiums.  Purchasing insurance to cover various types of risks is usually a smart business decision.  Most businesses and individuals by various types of insurance to cover a variety of risks of loss.  But most businesses and individuals are expected to pay the full cost of whatever coverage they need – unless they are poor.  Most farmers are not poor.  Most farmers should not receive any subsidy.  Maybe only poor farmers should be given a welfare voucher that would provide a partial subsidy up to a specific dollar amount premium.

 

Link to Register article: http://www.desmoinesregister.com/comments/article/20130324/OPINION01/303240035/Another-View-Crop-insurance-stabilizes-jobs-economy

Iowans don’t live in poverty.

Contrary to the picture painted by the recent series of articles in the Des Moines Register, very few Iowans actually live in poverty.  What we have is families who whose incomes, before counting any welfare benefits received, are below government established guidelines for poverty.  We measure “food insecurity” because very few Iowans are actually go without food for any extended period of time.  Taxpayers provide food stamps, Medicaid health insurance, subsidized housing, and much more.  Charitable organizations provide food banks, clothing, shelters and much more. For children, taxpayers also provide pre-school, meals before, during and after school, subsidized child care, and much more.
We clearly have an effective and extensive safety net.  The relatively few who fall through the cracks either don’t know about the benefits or won’t ask for help.  It appears quite clear that we do not need to spend more taxpayer money to expand welfare benefits.  It’s actually hard to imagine that spending for welfare programs cannot be reduced.  There has been much anecdotal evidence of fraud and abuse in our welfare programs by both recipients and providers.
Today, the best way to help the poor is by having a vibrant, growing economy with enough jobs for those who are willing to work, not by expanding welfare benefits.  To encourage a growing economy, we need for our government to stop regulating businesses in areas not related to employee and public safety or pollution of our environment.  Government should not mandate pay levels or benefits.  Government should not provide corporate welfare (subsidies) to artificially prop up favored industries.  Just as with individual welfare, corporate welfare breeds competitive weakness and dependency on government.

Minimum wage hurts low skill workers the most.

The Guest View , “Fix the minimum wage”, by Elizabeth Rose, published in Cityview on 9/6/2012, was emotionally appealing, but logically misguided. Wouldn’t it be nice if we could simply raise the minimum wage without any unseen negative effects.

What we see are those people who get and keep jobs at the new higher minimum wage. What we don’t see are those people who just don’t get jobs because they are not economically viable at the new higher wage. Some jobs are lost because customers will simply not pay higher prices, some are lost to automation because the new higher wage makes automation economical, and some are lost to offshore outsourcing. Typically, those with the least skill are the ones who can’t find jobs.

Many of the government laws and regulations regarding employment protect big, established businesses from competition by new, start-up competitors. Established businesses are often the ones who lobby for regulations that increase costs for would-be competitors. This is much the same as unions wanting government to require a high “prevailing wage” on construction contracts – to protect the union’s higher wages. These types of laws and regulations are primarily intended to protect existing vested interests.

As we continue to have downward pressure on wages and benefits because of international competition, it is possible that the cost of living will decline too. If wages dropped 10% but the cost of living dropped 15% what would be wrong with that? At the same time, our government is doing everything it can to increase the cost of housing (housing prices) – and then subsidizing those with low incomes. It would be better for those with low incomes if our government let housing prices fall to their natural level. Many cities don’t allow homeowners to take in borders – which could lower the cost for both the owner and the tenants.

Morally and philosophically, we should not allow our government to use its force to prohibit peaceful and honest people from voluntarily agreeing to employment terms. It would be considered immoral and illegal if you used force or fraud to make someone pay you a higher wage. The same thing done by a majority through government is still immoral. The purpose of government is not to create jobs. The proper role of government is to protect our lives, liberty and property against those who would use force or fraud to take those things from us.

And If you still feel that government and taxpayers must subsidize those who earn low wages, then the Earned Income Tax Credit, which already exists, is much better than an increase in the minimum wage.

Don’t raise Social Security tax.

Some people argue that there should be no cap on Social Security taxable wages and that the tax should be paid on all wages.  The reason for the cap is that social security is not a welfare program.  Benefits received are based on taxes paid in.  Medicare has already been converted into a welfare program.  The Medicare tax is applied to all wages, but those who pay more don’t get any greater benefits.  Medicare taxes 2.9% of all wages.  Social Security taxes 12.4% of wages up to $110,100.  If the Social Security tax were to be applied to all wages, it would probably be the greatest tax increase of all time.  Most people want a fair payment for what they have paid in.  They understand that a higher retirement age is fair.  That is what should be done.

Reich is wrong.

Robert Reich is wrong in his opinion that the key to improving the sluggish economy is more spending by the middle class. The middle class is still mired in debt and needs to save more. This is a hard pill to swallow. Borrowing and spending can be an addiction, and just leads to a weaker economy.

Reich also wrote that we need to lift the earnings of middle class America by increasing taxes on the wealthy, increasing government spending on defense, infrastructure, higher education, and giving labor unions more power in bargaining with big businesses. (See The Register, 6/23/2012, Another View: Why the U.S. economy can’t get out of first gear, by Robert Reich. LInk: http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=2012306230027&nclick_check=1 )

In fact, the best thing to boost middle class income on a sustainable basis is to increase the number of good private sector jobs. The best way to increase the amount and quality of private jobs is to keep government involvement in the economy to a minimum and let people peacefully cooperate with one another. Regulations often protect vested interests, welfare payments often lead to more welfare, and crony capitalist spending leads to more special interests who lobby to maintain and expand taxpayer money flowing to their favored industries.

Expanding government financed jobs takes money away from things that people actually want, and puts it into either non-productive jobs or things that people don’t really want. Government stimulus spending has a tendency to mis-allocate resources. Infrastructure spending builds bridges to nowhere, higher education spending results in tuition increases, and defense spending is completely wasteful economically, even when necessary and morally justified. Raising taxes on high income earners may temporarily transfer wealth from the rich to the poor, but, over time, pulling the rich down does not raise up the poor. And, taxing for the purpose of transferring wealth from one person to another is immoral.

As long as our government tries to manage the economy with low interest rates and subsidies to favored industries we will grow dependent on government and weaken industries that continue on the dole. We mostly need to reduce spending