How would you like to be head of a business that was spending a great deal more than the business was taking in, and with prospects that during the next year every indication pointed toward even greater losses? If you were running your own business, or if you were hired to manage a corporation, you would know that you couldn’t keep on spending more money than you had coming in.
Be glad that your business isn’t as bad off financially as is the case with your government. It now appears that the U. S. Government, the biggest business in the world, will operate during the 1950 budget year at a loss of about $6.6 billion. In other words, the people who are ·running the Federal government right now plan to spend $6.6 billion more than is likely to be collected through taxes. Some people are worried about that situation, but not enough people are worried enough to really do anything about it.
Something like $14 billion of government spending will serve as a “shot in the arm” to the U. S. economy during the next three months. This money will go into all sorts of business, will undoubtedly provide new employment, may help farm prices, too. Unemployment has been on the increase this year. College graduates will have more difficulty in getting jobs than any time in the past decade, but unemployment is not yet really serious. Income to wage earners remains high and will help sustain prices the remainder of this year.
No one is particularly happy about the government farm program. There is growing antagonism to waste of food purchased under the price support program. Your government now owns huge stockpiles of food that have cost $4 billion and no one quite knows what can be done with the food on which huge storage costs are being paid. Farmers are not happy because their income has declined from postwar peaks. Consumers protest because they have paid taxes for supports and for the most part have had little savings in food costs.
More and more farmers themselves are wondering if the old-fashioned laws of supply and demand won’t eventually determine prices and the best use of farm land. Pressure will grow for reduction in federal spending and it -is highly probable that whatever farm program eventually is decided upon will be one which will require a minimum of government cost and will depend mainly upon marketing agreements among producers themselves. About the only excuse for government subsidy of farm production would be to provide incentive payments to boost production, such as might occur if there were
real danger of immediate war. Nothing like that seems probable in the near future. Price supports which encourage production of the surplus foods don’t make sense.
The livestock business continues to stand out as offering the best opportunity for stability and security. People who raise what they feed–and feed what they raise–will continue to do all right. — Nelson R. Crow
