Friday, May 25, 2012

Just let the economy work

According to this article,, the USDA just contracted to pay farmers for not planting an additional 3.9 million acres of farmland.  This new acreage is in addition to the current 30 million acres of idled farmland.  My initial response was outrage, since I'm already seeing higher prices on everything at the grocery store, and idling more farmland means less production, and higher prices again.  And as if that isn't enough, the farmers are being paid to do this with my tax money.

The article goes on to say that there are environmental benefits to the program, so I guess it isn't all bad.  Then again, it could just as easily be said that there are environmental benefits to unemployment, so that's not all bad either.  Kind of like the article I read not too long ago where someone (the name eludes me at the moment) tried to spin unemployment into some kind of growth strategy.

In the end, I just think the government needs to decide whether they actually believe that capitalism works and, if it does, let it work.  In this case, we would let farmers decide what and how much to plant based on what they believe the supply and demand will be, and what prices they can expect to get.  Economics suggests that we would eventually reach an equilibrium price and quantity, and there would be no need to pay any one to not produce; the farmers would only be producing at the level that was economically feasible.  True, it would likely mean that some farmers would leave the industry; and it would likely mean that some farmland would be used for other purposes.  But that is precisely how a market economy is supposed to work.  I suggest the government stop attempting to fix the economy, and just let it work like it's supposed to.

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