Early next week it will all be over. The most aggressive midterm election in history. I for one will be glad to see the local political ads go away. Most of them are not helpful; the ads confuse and berate the amendments and/or the candidates. As we all know, our political system is in a world of hurt. Lots of folks around the world are seeing a dysfunctional democracy and they don’t like it.
What I love about agriculture are the people. Everyone is a straight shooter. They mean what they say and say what they mean. We take a lot of abuse from government while we have the most noble cause in the world; feeding people.
It’s a well-known historical fact that hungry people will create anarchy. This is China’s big fear. But here in the U.S. we’re for the most part well-fed. We spend less of our income on food than most countries but for some reason we’re unhappy with government.
Nobody likes to pay taxes. We got lower taxes with the Trump administration and now the federal government is seeing more tax revenue. This tax cut has worked as planned. It’s hard to understand for some, but the reality is lower taxes leads to more consumer consumption and more investment. Money is moving around and is taxed more often.
It’s kind of like the Beef Checkoff Program. A single steer can contribute way more than a buck a head, depending on how many times that steer is traded, from the cow-calf operator to the backgrounder and the feeder and other trades made along the way.
So far this year the feds have received $14 billion more in tax revenue. My friend, Andy Gottschalk at HedgersEdge, said it best: “The answer to enhanced federal revenues is not complex. Factors like record employment, accelerating wage hikes and accelerating economic growth. The economy continues to be firing on all cylinders. The latter is the result of deregulation and lower tax rates, resulting in record high confidence levels, both corporate and consumer. This level of optimism is noted especially within small businesses, which were being strangled by needless regulation. Consumer spending remains very positive. As a reminder (despite the clamor regarding consumer debt), household debt service payments as a percent of disposable income is near a record low. Demographically, the world is amidst the largest generational transfer of wealth in the history of mankind. The economic flame will continue to shine brightly, adding to demand for meat and beef.”
But now the feds need to get a handle on spending and debt. There has never been an earnest effort to pay down the national debt, currently at $21.6 trillion. The best any administration has done is to reduce deficit spending to a couple hundred billion. Last week President Donald Trump asked his cabinet to reduce their agency spending by 5 percent, which seems reasonable at $68 billion. But then that depends on whose ox is getting gored.
As reported in The Hill, a recent report from OpentheBooks.com, a government watchdog group, showed that the federal government doled out over $600 billion in 2017 in various grants. The reports said that eight Ivy League universities had collected $22 billion in grants over an eight-year period while maintaining foundations worth $120 billion.
Just last week I received several press releases from the EPA dolling out $57 million in grants to tribal lands for pollution monitoring. One of their highlighted expenses was $547,000 to replace 40 aging septic systems in tribal homes. In other words, these agencies have money burning holes in their pockets and they continue to have the fiscal philosophy of “use it or lose it.” I’ve heard that term about government spending all my life. And it doesn’t stop with the feds; the states and counties all have the same attitude.
The point is that the government has a severe spending problem. We’ve proven that we can raise revenues without additional tax burdens. But the agencies just can’t seem to be fiscally responsible. Politicians don’t make good managers and their vision doesn’t go beyond the next election.
Unfortunately, this election is being driven by emotion and is a referendum on Trump. What do we need from government leaders now? Leadership with good social skills or leaders with good fiscal skills. Pick one or the other because they seldom come in the same package. — PETE CROW