Friday, May 16, 2008

I Made Under $ 750,000 Last Year, Where's My Check?

I have stayed away from politics on the blog as I feel that I don't need to intentionally alienate any readers, but some things bear mentioning. Looking at my IP tracking, I may be about to infuriate at least some readers in the midwest. So be it, this needs mentioning.

Yesterday the Farm Bill passed the House, and today it passed the Senate. For those unfamiliar with the 2007 Farm Bill, it is the $289,000,000,000 cherry on top of the government sundae of spending.

People can bitch about government spending here and there all they want, but when the government allows subsidy payments to individuals with incomes up to $750,000 a year (married incomes of up to 1.5 million dollars) it somehow strikes me as the rich getting richer. Isn't that what so many people are bitching about? Economic stimulus checks are arriving now. I'm wondering where mine is, as I am positive I made less than three quarters of a million dollars last year.

Then there is the ethanol debate. I just can't stand behind the idea of burning food... We have seen rises across the board in food prices and yet somehow we need to be giving refiners (those people that everyone likes to bitch about having record profits) a 45¢ a gallon tax credit for blending food corn based ethanol into our gasoline. I know that the subsidy exists to keep US farmers in the business of growing corn, but at a time of record grain prices (and shortages in other categories, the big two in my world being barley and hops) is this still necessary?
And then we end up with anomalies. Case in point, a recent article in the W.S.J. pointed out that some refiners have been switching to Brazilian ethanol due to it's lower cost even though it is hit with a 54¢ a gallon tariff. Brazilian ethanol is made primarily from sugar cane, and their economy is immensely dependant upon the export of ethanol. That said, the entire country of Brazil only produces 4.3 billion gallons of the fuel. The US produces only 7 billion gallons of ethanol. The 2007 Farm Bill mandates that refiners blend 9 billion gallons of ethanol this year alone, with an average increase of about half a million gallons a year over the next fourteen years.

The increase can be made up in their production of Cellulosic Ethanol. CE is produced from non-food items such as sawgrass, wood chips, sawdust, etc... The production of CE at least has the potential to alleviate the need to burn US foodstocks to run our automobiles, but it is still being researched and there are currently only two major CE projects, one of which is not expected to come completely online until 2011. The Farm Bill provides a significant research subsidy to increase the production of CE, and it damn well better. The bill requires that an additional 21 billion gallons of CE be blended into the US fuel supply in 14 years. (A total US ethanol dependancy of 36 billion gallons.) For some reason I think we aren't going to be able to pull that one off...

And then there is the food aid. The fact that this spending is thrown into a bunch of government pork is laughable and probably one of the few reasons that the damn thing passes with enough votes to override a veto. It's hard to tell the poorest people in a congressional district why you voted against their children's school lunch program...

5 comments:

The Charming Hedonist said...

Hey, I'm still waiting for my check for all the crops I'm not growing!

Bogart in P Towne said...

That politics game is so fascinating...and the farm bill is a joke.

Glad to hear someone else my age reads the WSJ.

Wanderlusting said...

All governments rip you off - I was super excited to get my tax check back until I found out I owed them $16. I barely made anything last year AND paid taxes and somehow I owe them. sheeesh. I'm gona be a farmer.

Trundling Grunt said...

And rice has shot up as well, which doesn't seem to make much sense. The reality is that the need for corn yield for feeding a growing population outweighs the need for corn based ethanol. And the fossil fuel input needed for corn makes it less attractive.

Algae, mate.

Alan said...

Soylent Green, anyone?