Kill the Farm Bill

http://www.cato.org/publications/commentary/new-zealand-farmers-dont-want-subsidies

Upshot is New Zealand ended all ag subsidies years ago and their ag sector has done great.

Right here in the good ol' US of A, the same thing has happened to tobacco - price controls and subsidies removed, tobacco sector explodes. This is an old article but the trend is holding (at least until the Chinese stop smoking):

http://www.msnbc.msn.com/id/2504947.../us-tobacco-farming-bigger-ever/#.UAlfjWH2ZFo

These kinds of subsidies need to be real high on the list of cost cutting measures when Congress gets around to fixing our budget, as I am sure they will do any day now.

Sounds like a good idea to me. We repeal that, the mortgage interest deduction, and a bunch of other deductions, we may actually be in decent financial shape.

How many members of Congress are for the market? How many would rather say they "brought home the bacon?"

I don't know why, but the thread title and cadence makes me think of Elmer Fudd/Opera Bugs Bunny when he sings, Kill the Wabbit!"

Sgt Hulka said:

I don't know why, but the thread title and cadence makes me think of Elmer Fudd/Opera Bugs Bunny when he sings, Kill the Wabbit!"

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pos rep

Ball State Deac said:

Sounds like a good idea to me. We repeal that, the mortgage interest deduction, and a bunch of other deductions, we may actually be in decent financial shape.

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I couldn't agree more, this is where financial reform has to start. Unfortunately all of our current politicians are bought and paid for by the interests benefiting from those deductions and will be dead before the true effects of their cowardice really appear. So yeah, we're fucked.

I think a good number of us agree with Ball State and Brasky on this one. It's a good common sense place to start.

Can't afford to repeal the mortgage interest rate deduction at this point. The housing market is still too weak, and that's killing credit markets.

There are a lot of things we "can't afford to do" as long as we don't do them.

PhDeac said:

There are a lot of things we "can't afford to do" as long as we don't do them.

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Repealing the mortgage deduction is close to the top of the list. The single greatest factor that is weighing down our economy right now is the anemic housing market. It's inhibiting credit markets, and keeping the expansion from taking off.

The single greatest factor that is weighing down our economy is that we're so dependent on the housing market.

PhDeac said:

The single greatest factor that is weighing down our economy is that we're so dependent on the housing market.

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Of course we are. Houses are the greatest source of wealth for the average American. When a person wants a loan to start a small business, they take out another mortgage on their house. When a person wants to pay for his kids to go to college, he takes out another mortgage on his house. Because houses are the most valuable thing most people own, they use it as collateral when taking out loans. Now that house prices have been plummeting, credit markets are somewhat stagnant because banks are less willing to extend a loan if they will lose money in the event of a default.

Are you agreeing with me or disagreement with me? You pretty much made my point.

PhDeac said:

Are you agreeing with me or disagreement with me? You pretty much made my point.

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I'm agreeing with you. Our dependence on the housing market isn't really a negative, though. That's like saying our economy is too dependent on people's savings.

Yes and no. Savings is still cash.

PhDeac said:

Yes and no. Savings is still cash.

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Sure. But liquidity of the assets isn't really relevant. Saying that our economy is too dependent on housing is borderline tautological. To a large degree, housing is the economy. It's not a good thing or a bad thing. It's just pretty much equivalent to saying the economy is too dependent on people's wealth.

But that statement makes it seem like housing has always been the economy and will always be the economy which is exactly the assumption that got us into this mess in the first place.

PhDeac said:

But that statement makes it seem like housing has always been the economy and will always be the economy which is exactly the assumption that got us into this mess in the first place.

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You'll get no disagreement from me. You should take up your argument with the guys that said, "a house for every family is the American dream" and offered housing subsidies and tax deductions.

I do, which is why we got started on this discussion in the first place.

that back and forth between you two was kind of surreal.

I think the argument that we can't end the deduction because it will be bad for the economy is significantly countered by the example of Britain and Australia (maybe it was Canada instead of Australia, too lazy to google) that had the deduction and phased it out in relatively recent years. Neither one of them had any significant adverse economic consequences and both of them have homeownership rates comparable to the US and similar to the rates before the phase out.

No matter when you do it or how you do it, the Realtors lobby is going to scream bloody murder and claim it will wreck the economy. That's nonsense for two reasons: first, it would be a phase out, not a cold turkey cutoff. People that bought their homes relying on the deduction should be able to keep it for some period of time until it gradually phases out. Second, it would have to be done as part of a comprehensive reform that would lower rates and make the whole package revenue neutral - if for no other reason than that it could never pass otherwise. Under those circumstances I just don't see how ending the deduction would be the big catastrophe that the Realtors and mortgage brokers make it out to be.