Red China is Undermining the U.S. Dollar with Counterfeit Money

Red China is having Alibaba sell counterfeit U.S. $20 and $100 Federal Reserve Notes that are sufficient copies that many casual users and perhaps many foreigners would not notice that they were counterfeit.  This is a way to undermine our economy.  See this page.  This sort of nefarious activity directed at the USA is coupled with extensive espionage, the theft of proprietary information, violations of patent law, supplying Mexican drug gangs with fentanyl chemicals, biowarfare (Covid 19), the counterfeiting of many US products, mining monopolies, the planting of harmful misinformation and propaganda on the Internet, and attacks on websites and infrastructure software programs.  Red China is building its military rapidly with a desire to dominate the Earth with its totalitarian control.  It is already impeding the use of international trade routes.

Americans need to take the Red China threat much more seriously than they do, despite the fact that Chinese goods may sometimes be less expensive than American goods.  Red China is one country upon whose goods we should impose significant tariffs, though I am not a general fan of high tariffs.

Trump has been widely criticized by libertarians and many economists because he has advocated high tariffs.  He tends to use them as a negotiating tactic to improve our international trading prospects.  Reducing the $3 trillion per year cost of US regulations imposed on American businesses would help us compete in international markets greatly.  Trump will work on reducing regulations, which Harris will not.  Trump will also not allow the Trump tax cut for small businesses to expire, as Harris and the Democrats will.  This tax cut has made American businesses more competitive in world markets.  Labor unions, backed by Democrats, have also made US businesses less competitive.  Trump will make the US economy more efficient with higher reliable energy use and production, with the building of more pipelines, with the building of more nuclear power plants, and by allowing the export of natural gas.  He will oppose such deadly mandates as those directed at the internal combustion engine in our transportation system and requirements that all carbon dioxide emissions be captured at huge expense.  Over the last year, job creation under Biden/Harris administration has been totally dominated by the hiring of government workers and healthcare workers.  The private sector scale has been reduced and shackled, making it much harder for the USA to compete in world markets.  Trump will improve this debilitating effect of big government growing ever more gigantic and controlling.  

We also have made ourselves less competitive by shouldering so much of the defense of the free world.  It is our military that has made the world safe enough that international trade has grown mightily.  It is perfectly reasonable that a low tariff on the goods of other countries should help pay for this protective service we provide the world.  Our military will otherwise suffer because the excessive spending of the Democrats on their Green New Deal and many other irrational programs such as college student loan forgiveness, caused out-of-control inflation.  This raised interest rates tremendously and has caused the servicing of our national debt to devour more tax money than does our military.  Tariff revenue to cover a portion of our military spending is needed and justified.

U.S. Sugar Price Nearly Twice the World Market Price

This sugar crisis may not be one of the worst crises in the world right now, but we should never lose sight of the many, myriad ways that the federal government fails the American People with its pursuit of power way beyond its constitutional grants of power.  The U.S. Constitution gives the federal government no power to set food prices or agricultural production limits, yet it does so under the completely spurious claim that it can do anything it wants to our commerce under the Interstate Commerce Clause.  That clause was intended to keep the various states from interfering with trade between the states, but it was reinvented as a power allowing the federal government to dictate the terms of all commerce crossing state lines in the late 1800s and even most intrastate commerce in the 1900s.

One result is that politicians and bureaucrats largely fix the price of sugar in the U.S. by imposing import restrictions on sugar.  These restrictions are controlled to cause the U.S. price of sugar to be much higher than that in the world market.  According to today's Wall Street Journal, the U.S. price of sugar relative to the world market price is the highest it has been in the last decade.  This is a gift to sugar producers, some of whom are abroad, from sugar processors, confectioners, and consumers.  It is as direct a transfer of their income as would be a tax levied on them with the government then handing the tax over to the sugar growers.  No.... actually it is better for the sugar growers than a tax, since they do not lose a part of the money to bureaucrats as they handle it.

The global sugar price is 19.67 cents a pound, but the U.S. price is 35.02 cents a pound.  Until 1 April, the import quota on sugar is 1.3 million metric tons, which it has been set at since 1990, despite a growing population.  To be precise, there were two momentary exceptions:  after Hurricane Katrina in 2005 and a large sugar refinery explosion in 2008.  The historic price differential has been about 8 cents per pound, but last week it was 17.32 cents per pound, which is the highest it has been since 1999.  The import quotas are given by country and were set in the 1970s.  Jamaica and Haiti and others no longer export sugar to the U.S. at all, so only about 1.2 million metric tons is actually imported even though the overall quota is higher than that.  The USDA may reallocate the quotas by country to allow some countries actively exporting sugar to the U.S. to export more sugar to us.

It turns out that one peculiarity of these import restrictions is that the exporter, as long as he is within his country's export limit, is paid the higher American market price, not the world market price.  So, American consumers are offering such exporters a bonanza profit.  Once a country meets its quota, a stiff tariff of 15.36 cents a metric ton kicks in.  India and Brazil are the worlds two largest producers of sugar, but bad weather in both countries caused the world sugar price to hit a 29-year high on 1 February.  Supplies have improved since then.

Not only are Americans paying ridiculously high sugar prices, but we may run out of sugar before September when new supplies will be available.  Last year, U.S. supplies of sugar fell to 49 days worth by the end of September and they are projected by the USDA to go as low as 38 days inventory this year.

Of course, social engineering or Nanny State supporters are not likely to become too upset by high sugar prices.  If the import quotas did not keep the price of sugar high, they would be advocating a sugar sin tax.  Come to think of it, some of them are doing that anyway.

Tax Monies Making Some Farmers Rich

"Oh, come on Charles, now you are going to claim that the farm subsidy program, which is meant to keep the family farm in existence, is just another government mistake or a fraud! Heck, we sent the Senators and Representatives we want to Congress and they, in their wisdom, believe the farmers need this help. This is fine, because there is something reassuring and comforting in knowing that many Americans families are still able to stay close to the soil."

Two-thirds of American farmers do not receive Federal subsidies. There are no guaranteed prices or protection for the production of cherries, melons, almonds, potatoes, pears, grapes, blueberries, apples, pistachios, lettuce, celery, cabbage, cauliflower, beef, and poultry. Despite this, these foods are farmed profitably and represent two-thirds of the value of the agricultural market. Corn, soybeans, cotton, rice, wheat, milk, sugar, peanuts, tobacco, and cotton are subsidized. The first five, corn through wheat, receive more than 90% of all farm payments. In 2004, government support for farm production provided 18% of all farm income. Did this subsidy money go largely to small family farmers?

NO. In 2003, the top 10% in subsidy payments received were paid 68% of the Federal farm support funds. The top 5% were paid 55%! Riceland Foods of Stuttgart, Arkansas received $68.9 million as the largest single recipient. Producers Rice Mill of the same town received the second largest payment of $51.4 million. In more recent years, the top 10% have edged upward to getting about 72% of the payment amount. Fortune 500 companies on farm welfare include Archer Daniels Midland, International Paper, Westvaco, John Hancock Insurance, Chevron, Electronic Data Systems, and Caterpillar. Multi-multi-millionaires such as Ted Turner, Edgar Bronfman, and David Rockefeller are on the farm dole. Many of the politicians who vote for these farm supports in the Congress are also on the dole, including Representative John Salazar (Colorado Democrat) and Charles Grassley (Iowa Republican). These are certainly not the small family farmers most Americans seem to think are the ones being helped by the farm subsidy programs.

But to look on the bright side, the program does raise the dead! The Senate Finance Committee asked the GAO to perform an audit of the subsidies and they found that from 1999 to 2005, the Agriculture Department sent out payments totaling $1.1 billion to more than 170,000 dead people. 40% of the dead had been dead more than 3 years and 19% had been dead more than 7 years. How happy their relatives must have been to have such consolation from the Dept. of Agriculture! Overall improper payments were found to be over $500 million per year. Democrat Senator Harkin said, "Given the extremely tight budget restraints it is no longer tolerable to permit billions of farm bill payments to go to individuals who in instances don't even farm or are no longer alive." Aren't we all very reassured that he is on the job and watching over our tax money with such enthusiasm and vigor now that the budgets are restrained for the first time? Hmm....you and I have always been aware that our budgets were restrained, how is it that he has just become aware that his budget is restrained?

If we look at average farm household income in 2005, we find it was $79,965 or 26% higher than the average household income of all Americans. This was not a fluke year. In 2006, it was $81,420, or 29% above the national average. Agricultural prices are high and farm property values have risen greatly. Corn prices were up 41% for the 12 months prior to 25 March. Soybeans were up 74% and wheat prices were up 126%. The soybean and wheat prices were up even more than corn prices because subsidies for corn and for ethanol drove farmers to convert some land from growing soybeans and wheat to growing corn. The lessened supply of soybeans and wheat caused their prices to go up. Net farm income grew 48% from 2006 to 2007. In 2002, farm profits were $40.1 billion and in 2007 they were $87.5 billion. Farm land prices have risen 78.5% since 2002.

Between 2003 and 2006, the total of the net farm profits in those four years was $279 billion, which was the highest 4-year total ever. Despite these profits, the Senate Agriculture Committee, under Chairman Tom Harkin, Democrat of Iowa, approved a new farm subsidy program totaling $288 billion over the five-year life of the new farm bill. The Senate version and the House versions had some differences and they have been unable to resolve them, so the government is operating under an extension of the 2002 Farm Bill which was supposed to be revised and reapproved in 2007. A major difference is that the Senate wanted to put an upper limit on how much money could go to an individual and how much could go to a husband and wife, while the House refused to do so.

Aside from being soaked as taxpayers, we are also being soaked as food consumers. Between March of 2007 and March of 2008, the price of a dozen eggs went up 40%, milk went up 26%, and bread has gone up 11%. Beef prices have gone up about 20% since 2006. The sugar protective tariff program guarantees a price of $0.229 per pound for beet sugar and $0.18/pound for cane sugar. The world price is only about $0.10/pound for sugar. The U.S. International Trade Commission found that between 2000 and 2002 the average domestic price of nonfat milk was 23% higher than the world price, cheese was 37% higher, and butter was more than double the world price. Trade policy also increased the price of cotton, beef, peanuts, orange juice, and canned tuna. The mounting concerns about inflation are being fueled largely by energy costs going up and by rising food costs. The government drives up fuel costs by denying drilling for oil in the U.S., by holding the oil shale and tar sand lands in the West, and with its ethanol policy. They drive up food costs with their subsidies, their tariffs on imported foods, and their ethanol mandates.

These higher costs for food and food inputs hurt the restaurant business and it hurts the food industry dependent upon food product exports. This results in less investment in those industries, fewer employees, lower payscales, and hurts our overall export value. Food production is a major American business strength, but with our tariffs and our subsidies, we discourage greater productivity and decrease innovations in these industries. Their contribution to the balance of trade is then reduced. The number of sugar refineries in the last 20 years has dropped from 23 to 8. The confectionary industry, once very big in Chicago, has been bleeding badly. Farm subsidy reform is also required as part of the World Trade Organization talks to reduce tariff barriers to trade. Lacking that, we are reducing the exports of many other industries as well. The World Bank estimates that the removal of world trade barriers to farm products would result in world farm exports becoming 74% higher in 2015 than without this reform. U.S. exports would be up $88 billion, while our imports would rise by $28 billion, giving us a surplus in trade of $60 billion.

For about 100 years the amount of land being farmed has been dropping in the U.S. This has led to the regrowth of huge acreage of forested land. The current drive to use huge amounts of farmland to grow corn for ethanol and the fact that farm crop subsidies encourage land to be used in general for the purpose of receiving as much subsidy money as possible, is likely to cause an increase in the amount of land farmed. This also means that more marginal, less suitable land will be farmed. Plowed land produces more silt in rivers and lakes. The use of more fertilizer and insecticides results in more pollutants in our rivers, lakes, and bays. The EPA says that 72% of our rivers and 56% of our lakes suffer from agriculturally caused pollution. Agricultural water subsidies cost $2 billion per year and encourage the growing of cotton in Arizona, where that water could and should be put to better uses. The sugar supports cause farmers to grow sugar cane in Central Florida, where they have taken large amounts of water from the Everglades. The damage that has done to the Everglades allowed Congress to spend billions more tax dollars to provide a bit of mitigation to the problems caused.

The fact that we do not import more foods from abroad hurts the small farmers in many underdeveloped countries around the world. In many cases, our subsidy-induced overproduction drives world prices for some farm commodities down and makes it difficult for them to compete. It rightfully causes many of them to resent us, despite the fact that most developed countries have higher protective tariff barriers for their agricultural industries than we do. In 2004, the European Union provided 33% of farm income through subsidies, while the U.S. provided 18%. Japan provides 56%, Canada 21%, South Korea 63%, Turkey 27%, Switzerland 68%, and Mexico 17%. The good guys here are Australia at 4% and New Zealand at 3%! In terms of an equivalent tariff, the U.S. support for agriculture is 19.9%, while the European Union provides support at a 46.4% rate and Japan at an 82.0% rate. So, there are worse actors in the world, but we are nonetheless hurting ourselves and many of the poor in less developed areas of the world. This harm is not compensated by our foreign aid programs.

So, why are our elite rulers, our elected politicians who know what is best for us peon citizens, shoving these stupid programs with their baleful consequences down our throats? Apparently because we are either too uninformed to notice the problems or we simply do not have enough incentive to spend our time fighting them. There are special interests out there who have a lot to gain from these foolish programs for farm supports and they do fight hard for them. Hard enough to get the programs passed through Congress and signed by a President over and over since the Great Depression. We taxpayers and food consumers just keep taking it on the jaw and do nothing. We do not protest loudly that this is all clearly unconstitutional. We do not get angry at our tax bill. We do not mind paying much more for food. And we certainly do not care that the U.S. exports less, employs fewer people, and we earn less, all as consequences of these stupid programs.

The U.S. farm support programs fit the pattern of unconstitutional government programs, which clearly hurt the General Welfare and do not lie within the enumerated powers of Congress, and yet they proliferate. They do serve unethical and unprincipled Congressmen and the recipients of the major welfare payments. If the farm support program does not hurt most of us enough to get up off our rear ends and fight for our individual rights, then one would hope that the sum of these many deleterious programs would give us sufficient incentive. This problem is repeated over and over at all levels of government. We must learn to fight it by standing on our principles and never letting up in our fight for the rights of the individual against all such intrusions and all such little enslavements. The sum of the enslavements is no minor thing. The only pragmatic way to fight them is to stand on our principles and demand that our elected officials and all special interests give way to those principles. When government makes it its duty to protect the rights of the individual to life, liberty, and the pursuit of happiness, then it justifies its existence in the only way it can do so. Otherwise, it does evil to most of us and evil to future generations.