Posted by
Rich on Sunday, May 25, 2008 7:19:32 AM
Waldo
Proffitt gets it way right when he supports President Bush's veto of
the farm subsidy bill passed by Congress this past week.
In his column, "Bush gets it right on farm bill",
Waldo states, "...I feel obliged to opine here that he did exactly the
right thing this week when he [President Bush] vetoed the 2008 farm
bill sent to him by Congress." Waldo goes on to say, "with a five-year
price tag of almost $300 billion.... it's not entirely accurate to call
this a "farm" bill. It's a 'farm and earmarks' bill."
Waldo is
particularly upset by government subsidizing sugar growers. He rightly
points out that with sugar subsidies, "we do know the worst, the most
unjustified and probably the most costly element in the bill is what it
does to enrich the sugar industry at the expense of U.S. citizens in
their roles as both consumers and taxpayers."
We fully agree
with Waldo. Government subsidies pick winners and losers in what is
supposed to be an open market system in the U.S. What subsidies do are
take money out of one pocket (the taxpayers) and put it into another
pocket (the activity subsidized) with an out come of higher prices for
consumers and support for that activity over other activities.
Where
Waldo and I will differ is on what should and should not be subsidized.
There is nothing in the U.S. Constitution that says that federal
government should subsidize anything. Today the federal government
tries to subsidize nearly everything from individual behavior (health
care, education, energy, housing, etc.) to what crops are and are not
grown.
Subsidies are in fact an insidious form of socialism.
Many
would say that providing government scholarships and low cost student
loans for college is good for America. In fact, when government
subsidizes college education then colleges and universities charge more
for a college education, which makes government increase the size of
their subsidy to keep up with costs. This leads to an artificial cycle
of inflation that puts the cost of education, for those who pay for it
without a government subsidy, further out of reach.
We should
not be subsidizing anything and let the free market system work on its
own. That is a dramatic statement but one we must consider.
Let's
just take the energy industry. The prices of energy and gasoline are
rising rapidly. This is a supply and demand problem in large measure.
However, Congress subsidizes oil, coal, natural gas, wind, solar,
biomass, and ethanol production. We can all agree that it would be
better if all these energy industries made it on their own. Let the
market decide at what level each of these energy industries grow and
prosper on the merits of their products and services.
We believe
that subsidies in general are bad and produce bad outcomes for both
taxpayers and consumers. Unlike Waldo we do not single out just sugar.
As Nobel laureate Milton Friedman said, ""One of the great mistakes is to judge policies and programs by their intentions rather than their results."
The results of subsidies are bad.