The Farm Bailout

[HVAU 673]

I'm hoping someone can clarify this.

The partisan message from the left seems to be this:

Trump Tax Cut > Increases Deficit > Trade War and Tariffs > Farmers Hurting > Big Bailout > Can Not Afford > Borrow From China

In other words, due to the tax cuts the US must borrow from China to subsidize Trump's trade war with China.

Here's the issue I have, I can substantiate everything up until the "Borrow From China" part.  The articles I've seen indicate Trump is using a policy from the Great Depression to borrow $30 billion from the US Treasury to support farm aid.  Is borrowing from the US Treasury during periods of large deficits de facto borrowing from China?  Or, is this an unreasonable jump to inaccurate conclusions?

https://www.newsweek.com/trump-trade-wars-tariffs-farmers-bailout-1040309

https://www.nytimes.com/2018/07/24/us/politics/farmers-aid-trade-war.html

https://www.cbsnews.com/news/soybean-farmer-calls-trumps-12-billion-bailout-a-pacifier/

http://insider.foxnews.com/2018/07/24/donald-trump-tariffs-are-greatest-ben-sasse-rips-president-over-tweet-vfw-speech-remarks

If this being discussed elsewhere, apologies.

[HVAU 673]

I guess it was a seek and ye shall find scenario.

https://www.thebalance.com/how-much-u-s-debt-does-china-own-417016

China is essentially the largest US Treasury creditor as it holds a substantial percentage of the bonds the Treasury offers in order to generate revenue.

[AU64 10,122]

Regarding farm subsidies.....note that the Federal Government has paid out about $350 Billion over the past 20 years and in 2014 the president approved a subsidy of $25 Billion.   The proposed package is quite large but to some extent as far as taxpayers are concerned, it is probably offset by income from other trade sources. 

While legislators from both parties have complained about the pork barrel spending,  over the years Dems have been supportive of farm subsidies so it is likely they will  once again support aid to US food producers. ...right? 

https://www.thoughtco.com/us-farm-subsidies-3325162

[HVAU 673]

4 minutes ago, AU64 said:

Regarding farm subsidies.....note that the Federal Government has paid out about $350 Billion over the past 20 years and in 2014 the president approved a subsidy of $25 Billion.   The proposed package is quite large but to some extent as far as taxpayers are concerned, it is probably offset by income from other trade sources. 

While legislators from both parties have complained about the pork barrel spending,  over the years Dems have been supportive of farm subsidies so it is likely they will  once again support aid to US food producers. ...right? 

https://www.thoughtco.com/us-farm-subsidies-3325162

Maybe I misread something or picked something up elsewhere, but I recall seeing that Congressional approval isn't needed for this particular aid.  So whether or not Democrats support this is moot?

I agree that making sure food producers can maintain operations is important.  My issue is that, but for Trump's trade war saber rattling, this extra subsidization isn't necessary.

Maybe Trump's trade war scramble eventually works, I doubt it, but the current results are negative.  That's even taking the EU meeting into consideration.

[AU64 10,122]

34 minutes ago, HVAU said:

Maybe I misread something or picked something up elsewhere, but I recall seeing that Congressional approval isn't needed for this particular aid.  So whether or not Democrats support this is moot?

I agree that making sure food producers can maintain operations is important.  My issue is that, but for Trump's trade war saber rattling, this extra subsidization isn't necessary.

Maybe Trump's trade war scramble eventually works, I doubt it, but the current results are negative.  That's even taking the EU meeting into consideration.

Probably ....but It looks like a trade off for other expected trade gains.      It is early in the game.....takes trade issues and concessions a while to work through the economy...as you note...most of this is just talk right now anyway.

[homersapien 11,453]

I am pretty sure the effects on market prices (soybeans, steel, etc.) was immediate.  Granted the impacts on the average person will take a while to "trickle down".

[Mikey 16,740]

While $12 billion isn't peanuts, it's not that much in the overall view of things. Food stamps alone cost $104.5 billion and constitute 69% of the USDA budget.

"The Budget requests $104.5 billion for nutrition assistance programs for low-income individuals

and families."

https://www.usda.gov/sites/default/files/documents/USDA-Budget-Summary-2018.pdf

[AU64 10,122]

On ‎7‎/‎30‎/‎2018 at 12:20 PM, homersapien said:

I am pretty sure the effects on market prices (soybeans, steel, etc.) was immediate.  Granted the impacts on the average person will take a while to "trickle down".

No way to tell.....futures and current prices for ag products run all over the place during any given year and blaming it on tariffs is just a guess and short term thing....like adding a penny to the state sales tax or gas tax.    Mostly IMO, it's no different to what we read in the paper each day as some "experts" try to tell us why the stock market went up.....or went down....often using the same "reasons' for moves in either direction.