Suchergebnisse

Chris Edwards


The U.S. Department of Agriculture runs dozens of farm subsidy programs, which cost taxpayers more than $30 billion a year. The largest program is crop insurance, which costs about $10 billion a year. The program displaces private methods of managing risk and gives subsidies to farm businesses that do not need them.
Federal crop insurance for revenue and yield shortfalls is available for more than 100 crops, but corn, soybeans, wheat, and cotton are the main ones. The policies are provided through 14 private insurance companies.
The USDA subsidizes insurance premiums, which costs taxpayers about $8 billion a year. The subsidies cover an average 62 percent of premiums, which results in most farmers making money on this so‐​called insurance. The Congressional Budget Office found that farmers received $65 billion more in claims than they paid in premiums between 2000 and 2016.
The USDA also pays about $2 billion a year to farm insurance companies to cover their administrative costs. With these subsidies and the inflated demand for policies, the 14 insurance companies appear to make above‐​normal profits, as suggested by the Government Accountability Office and other experts.
Here are some features of the USDA's crop insurance program.
Expansion in Scope. Federal crop insurance keeps growing in size and scope. The USDA reports that the number of crops insured has risen from 112 in 2000 to 134 today, while the number of insurance plans has risen from 20 in 2012 to 36 today. Expanding the scope of farm subsidies buttresses support for the logroll in Congress.
No Income Limits. There are no income limits for the crop insurance program, with the result that subsidies are tilted upwards. An AEI study found that "farms in the top 10 percent of the crop sales distribution received approximately 68 percent of all crop insurance premium subsidies." The Government Accountability Office reported that some billionaires receive crop insurance subsidies. It is often claimed that subsidies are needed to support family farms, but most farm subsidies go to the largest producers.
No Transparency. The recipients of crop insurance subsidies are a government secret. Billions of dollars in taxpayer‐​funded aid is laundered through private insurance companies to help hide the identities of the millionaire and billionaire recipients. Congress is spending our money, but we're not allowed to know who gets it.
Crowding Out. Instead of government subsidies, the USDA itself identified market‐​based ways for farmers to manage risks, including diversifying crops, building savings, using forward contracts, using specialized equipment, and diversifying income sources. Farmers can also diversify planting locations and keep a low debt load in case emergency borrowing is needed. Federal subsidies displace or crowd out private risk management solutions, including new solutions that would arise if subsidies were repealed.
Disaster Aid. Crop insurance subsidies have been expanded over the years under the premise that they would reduce pressure for Congress to pass emergency aid packages after disasters. But farmers have enjoyed huge emergency aid packages in recent years on top of all the regular aid. Since 2017, Congress has passed "an astounding $60 billion in ad‐​hoc disaster assistance" in a series of bills.
Environmental Effects. Economists Vincent Smith and Barry Goodwin argue, "There is an extensive body of research overwhelmingly reporting that subsidized crop insurance has encouraged farmers to shift production onto more fragile lands, thereby increasing soil erosion and, by implication, agriculture's carbon footprint."
Climate Change. The Environmental Working Group says that the federal crop insurance program "doesn't encourage or require farmers to adapt to or mitigate climate change because it often pays farmers for the same type of loss year after year, like multiple years of payments due to drought." That is a fascinating point—that subsidies undermine market adaptations to changing environmental conditions. The same is true, by the way, with federal flood insurance subsidies.
The best reform would be for Congress to repeal crop insurance subsidies, which would save taxpayers about $100 billion over the next decade. A more limited reform would be to impose an income limit for subsidy recipients, as economist Eric Belasco examines here. There is no reason why farm businesses cannot plan ahead by themselves to mitigate fluctuations in their earnings from drought and other contingencies.
More on farm subsidies here, here, and here. And see farm policy analyses from AEI, EWG, TCS, and Heritage.

The Vietnamese government has tried to discourage workers from early withdrawal through various means. As pensions are a key pillar of the social insurance system in Vietnam, the growing opt-out rate of people will create huge pressure on the government to support elderly people with no source of income in the future, writes Tu Phuong Nguyen … Continued

It's high time for Congress to end a program that routinely goes into debt providing subsidies to wealthy people living in high-risk areas.

One of the strange aspects of the collapse of Silicon Valley Bank back in March (discussed on this blog here, here, and here) was the realization that many banks hold deposits are much larger than $250,000. Thus, the depositors are not covered by federal deposit insurance and are ready to participate in a bank run … Continue reading Spreading Accounts Across Banks for the Deposit Insurance
The post Spreading Accounts Across Banks for the Deposit Insurance first appeared on Conversable Economist.

The National Flood Insurance Program is one of the programs caught in the wash as the federal government staggers from one short-term budgeting plan to the next. As the the website of the Federal Emergency Management Agency (FEMA) points out: “Congress must periodically renew the NFIP's statutory authority to operate. On Sept. 30, 2023, the … Continue reading National Flood Insurance Program: One More Short-Term Deadline
The post National Flood Insurance Program: One More Short-Term Deadline first appeared on Conversable Economist.

Floridians spend millions litigating insurance disputes after hurricanes. There's a better way.

ThemeWar-weariness is becoming a problem but there is a need for continuity in the support for Ukraine. SummaryThe war in Ukraine is entering its third year. Ukraine has become a mirror that reflects a number of images: the breakdown of Europe's security and defence architecture; Russia's revisionist and revanchist policies; the heroism of the Ukrainian […]
La entrada Ukraine as a mirror: should we pay an insurance premium? se publicó primero en Elcano Royal Institute.

The tornado that destroyed a Pfizer building in North Carolina was orchestrated using weather manipulation to provide "an insurance claim for big pharma."

As California faces flooding this year, PPIC Water Policy Center director Ellen Hanak spoke with Insurance Commissioner Ricardo Lara about how to better protect the state's residents from flood risk—which is growing in our changing climate.

One of the most controversial policies included in H. R. 7024, the "Tax Relief for American Families and Workers Act" that passed the House on January 31, is a provision that would expand the "lookback" to determine eligibility for the child tax credit (CTC). Under current law, adults claiming the CTC for a tax year […]
The post How Many Forms of "Wage Insurance" Do We Need, Exactly? appeared first on American Enterprise Institute - AEI.

Could gene therapy break employer-sponsored health insurance at small companies? In Health Affairs Scholar, LDI Senior Fellows Jalpa Doshi, Atul Gupta, Mark Pauly, and Alexander Olssen say that despite the growth in gene therapy options and predictions about rising insurance costs, the expensive treatments do not threaten the U.S. health insurance system—as long as protections […]

Olympic gold medalist gymnast Mary Lou Retton said she was uninsured despite having a rare pneumonia that almost killed her. But her reasons for not buying coverage — preexisting conditions and cost — are among the things the Affordable Care Act directly addresses.

Letting third parties pay our bills pushes prices higher and limits our options.

Non-standard workers doing short-term, flexible jobs are a growing segment of the labour force, which poses difficult questions. Is it good policy to provide unemployment insurance to them? Do people engage in gig work by choice? And should they be rewarded for it? Jonas Kolsrud and Johannes Spinnewijn explore the issue and argue that many … Continued

Long-term care insurance coverage could increase the economic opportunities for adult children of aging parents by increasing the likelihood that they work full-time. This is one of the intriguing findings of a new study by LDI Senior Fellow Norma B. Coe and colleagues, which explored the effects of private long-term care insurance (LTCI) coverage on […]