# Scandalous



## 32rollandrock (May 1, 2008)

https://www.nytimes.com/2015/09/21/...column-region&region=top-news&WT.nav=top-news

Yet another example of why putting health care in the hands of capitalists is a bad idea.


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## vpkozel (May 2, 2014)

This strikes me as very odd. If this drug is as old as they say then the patent has long since expired and generics would be readily available for less. And the article never explains why generics aren't available.

It was like the famous line in The West Wing. The second pill costs 2 cents. The first one cost 2 billion dollars. There is no denying that the US is the research engine for the world when it comes to drugs. But - and this is a HUGE but - US companies have dramatically altered their business plans and now spend more money on advertising and marketing than on R&D. Part of the marketing also includes lobbying patent renewals to keep generics from being able to slash profit margins. And this is just plain wrong.

So, the bottom line is that if you want to blame capitalists, you need to blame the government just as much, because they control the patent system.


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## SG_67 (Mar 22, 2014)

vpkozel said:


> This strikes me as very odd. If this drug is as old as they say then the patent has long since expired and generics would be readily available for less. And the article never explains why generics aren't available.
> 
> It was like the famous line in The West Wing. The second pill costs 2 cents. The first one cost 2 billion dollars. There is no denying that the US is the research engine for the world when it comes to drugs. But - and this is a HUGE but - US companies have dramatically altered their business plans and now spend more money on advertising and marketing than on R&D. Part of the marketing also includes lobbying patent renewals to keep generics from being able to slash profit margins. And this is just plain wrong.
> 
> So, the bottom line is that if you want to blame capitalists, you need to blame the government just as much, because they control the patent system.


The generic is not available because of such incredibly low demand for the drug. It's used to treat an obscure parasitic disease.

It's like this, you own a buggy whip company and lately there has been very, very low demand for your buggy whips. What do you do? Close up shop? Keep making the same number of buggy whips as you did before the downturn and charge the same hoping that things will turn around?

The reason no one is making a generic is because there's no market for it. Period! There's a reason why every once in a while when there's an uptick in influenza cases nationwide people panic and there's a shortage of vaccine.

It's because during the off years, no one gets the vaccine and there's very little market for it. So there is very little manufactured.


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## 32rollandrock (May 1, 2008)

Exactly the case.

We are living in a world where parasites disguised as investors search for an obscure, yet lifesaving, drug, then engage in price gouging. It is, quite literally, a case of your-money-or-your-life. It's happened, also, with a TB drug, although outrage quickly forced the gougers to back off:

https://www.nytimes.com/2015/09/22/...r-tb-drug-is-rescinded.html?ref=business&_r=0

True, there is incredibly low demand for these drugs. Equally true that dead is dead and broke is broke--it doesn't much matter whether your loved one succumbed to TB or parasites or cancer (although I would submit that I would be outraged if I had to declare bankruptcy to save my life while some investor/parasite who sold me the drugs laughed all the way to the bank). It is also true, I suspect, that we are all paying for this. I have health insurance. I would hope that my insurer would pay for these lifesaving drugs if I needed them. My premiums are well below the cost of these pills.

Finally, there's no getting around math. These drugs, obscure as they might be, were available and affordable and suddenly they were available but not affordable. No one benefited from this save a profiteer who did nothing to develop the drug or otherwise help anyone in any way.



SG_67 said:


> The generic is not available because of such incredibly low demand for the drug. It's used to treat an obscure parasitic disease.
> 
> It's like this, you own a buggy whip company and lately there has been very, very low demand for your buggy whips. What do you do? Close up shop? Keep making the same number of buggy whips as you did before the downturn and charge the same hoping that things will turn around?
> 
> ...


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## vpkozel (May 2, 2014)

But the blame doesn't lie with him. If alternatives are available cheap then no one will pay these exorbitant prices. If he has an exclusive market then that is the fault of the patent system. Which means that it is the government at fault.


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## MaxBuck (Apr 4, 2013)

32rollandrock said:


> ... parasites disguised as investors ...


As has been demonstrated time and again, life is *so* much less stressful under communism.


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## SG_67 (Mar 22, 2014)

^ Tell you what, gather a group of investors from around the country and world, kick in your own cash and start a drug development lab in downstate Illinois to design, manufacture and distribute all manner of drugs for all manner of obscure diseases and only charge people what they can afford. 

Let's see how long your company stays around. Good luck. I'll tell you what, when your drug reps start coming by my office offering me trips to Hawaii for an educational conference I'll be receptive. That will be my contribution to your success.


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## L-feld (Dec 3, 2011)

SG_67 said:


> ^ Tell you what, gather a group of investors from around the country and world, kick in your own cash and start a drug development lab in downstate Illinois to design, manufacture and distribute all manner of drugs for all manner of obscure diseases and only charge people what they can afford.
> 
> Let's see how long your company stays around. Good luck. I'll tell you what, when your drug reps start coming by my office offering me trips to Hawaii for an educational conference I'll be receptive. That will be my contribution to your success.


This seems more like a market failure than anything else. It sounds like this is not a patent issue, but rather that only a few manufacturers have the capacity to produce the drug and nobody else is willing to invest in manufacturing of the drug because the demand is sporadic.

The only rational actors who invest in the facility for manufacturing the drug are banking on a few large sales to make it worthwhile. This sort of market strategy is not an issue when we're talking about nonessential luxury items. Nobody dies if they can't afford a pair of hand welted shoes.

But it's a different story when it's literally a life or death matter. This is the prime area for some sort of social insurance to fix the market failure. A prudent solution would either be to have a small, nationalized facility to manufacture drugs that are inexpensive to produce, but due to market failure, require very high margins of sale in order to attract capital investment.

Alternately, single payer insurance could insure citizens against these sort of catastrophic situations and spread the risk amongst the populace in such a way that nobody really feels the cost too heavily.

It's ultimately cheaper to have some sort of nationalized fallback to nip outbreaks in the bud. As Ebola has shown us, it only takes one person without healthcare access to go and cause a national crisis.

Sent from my iPad using Tapatalk


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## eagle2250 (Mar 24, 2006)

MaxBuck said:


> As has been demonstrated time and again, life is *so* much less stressful under communism.


While certainly not a fan of what many might consider pharmaceutical profiteering, I personally take more comfort in keeping the communists in my gun sights, rather than embracing their political ideology. Old habits are hard to break and perhaps should not be? LOL.


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## 32rollandrock (May 1, 2008)

MaxBuck said:


> As has been demonstrated time and again, life is *so* much less stressful under communism.


Communists don't let people die for want of health insurance or money to pay for drugs, and so life for some is, in fact, much less stressful. In fact, life exists because of this approach.

And before we get all started on the merits of health care in America vs. the merits of health care behind the now-defunct Iron Curtain, please publicly reject your right to Medicare now and in the future. We wouldn't want any socialized medicine now, would we?


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## 32rollandrock (May 1, 2008)

Excellent points. As you point out, ebola is/was another example. There are lots more.



L-feld said:


> This seems more like a market failure than anything else. It sounds like this is not a patent issue, but rather that only a few manufacturers have the capacity to produce the drug and nobody else is willing to invest in manufacturing of the drug because the demand is sporadic.
> 
> The only rational actors who invest in the facility for manufacturing the drug are banking on a few large sales to make it worthwhile. This sort of market strategy is not an issue when we're talking about nonessential luxury items. Nobody dies if they can't afford a pair of hand welted shoes.
> 
> ...


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## MaxBuck (Apr 4, 2013)

32rollandrock said:


> Communists don't let people die for want of health insurance or money to pay for drugs, and so life for some is, in fact, much less stressful. In fact, life exists because of this approach.
> 
> And before we get all started on the merits of health care in America vs. the merits of health care behind the now-defunct Iron Curtain, please publicly reject your right to Medicare now and in the future. We wouldn't want any socialized medicine now, would we?


Had I not lived the first 60+ years of my life planning for retirement on the expectation of Medicare availability, I might very well favor elimination of the program. As it is, though, your suggestion qualifies for straw-man status.

I wouldn't oppose the intervention of the feds in situations like the case of Turing Pharma and its execrable owner, Martin Shkreli. And manufacture of low-demand generics like Daraprim and doxycycline by government-funded university chemical engineering programs would seem to solve a couple of issues - get reasonably-priced drugs available, and provide real-world manufacturing experience to students.

My complaint was with your characterization of investors as parasites. Those of us who own equities can reasonably be upset with your calling us names. But perhaps you'd prefer life under Stalin to life under Disney.


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## Shaver (May 2, 2012)

Umm... parasites disguised as investors ≠ investors are parasites, does it?

Brokers on the other hand......

https://neweconomicperspectives.org/2014/03/financial-sector-greatest-parasite-human-history.html


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## 32rollandrock (May 1, 2008)

MaxBuck said:


> *Had I not lived the first 60+ years of my life planning for retirement on the expectation of Medicare availability, I might very well favor elimination of the program.* As it is, though, your suggestion qualifies for straw-man status.
> 
> I wouldn't oppose the intervention of the feds in situations like the case of Turing Pharma and its execrable owner, Martin Shkreli. And manufacture of low-demand generics like Daraprim and doxycycline by government-funded university chemical engineering programs would seem to solve a couple of issues - get reasonably-priced drugs available, and provide real-world manufacturing experience to students.
> 
> My complaint was with your characterization of investors as parasites. Those of us who own equities can reasonably be upset with your calling us names. But perhaps you'd prefer life under Stalin to life under Disney.


Ah. So you are, in fact, reaping the benefits of socialized medicine. And what if you had had the misfortune to fall victim to a life-threatening disease or natural disaster, say tornado, whilst between jobs, and without medical insurance, when you were a younger man? There are lots and lots and lots of people who have been financially ruined through this exact scenario, and through no fault of their own (and if you think that it has been easy for one unemployed person, alone, to obtain medical insurance, you should check your assumptions). You should be thankful that you are not one of them.

I did not mean to imply that investors, per se, are parasites. I invest in things and I do not consider myself a parasite. In this case, however, is hard to argue that the investors in question are not parasites.


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## 32rollandrock (May 1, 2008)

And therein lies a good part of the problem. Drug reps do, with some degree of regularity as I understand things, visit doctors and dangle junkets to Hawaii and other wonderful places before physicians who hold the key to their financial success, if not the health of patients. The problems inherent in this do not seem difficult to discern.

I would happily start manufacturing these drugs for a modest return, say, 10 percent or so. The problem is, the returns that these parasitic investors are demanding are not modest, nor are these miserable excuses for human beings doing anything whatsoever to advance medicine by developing drugs. If you truly believe that this sort of thing is in any way defensible, keep defending it.



SG_67 said:


> ^ Tell you what, gather a group of investors from around the country and world, kick in your own cash and start a drug development lab in downstate Illinois to design, manufacture and distribute all manner of drugs for all manner of obscure diseases and only charge people what they can afford.
> 
> Let's see how long your company stays around. Good luck. I'll tell you what, when your drug reps start coming by my office offering me trips to Hawaii for an educational conference I'll be receptive. That will be my contribution to your success.


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## vpkozel (May 2, 2014)

Y'all are overcomplicating this to the Nth degree. It can all be somved with a few simple questions. 

Is there a system to allow for new ways of doing things and the protection of that work for a defined period of time?

Would drugs fall into that category?

If this system exists, who administers it?


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## 32rollandrock (May 1, 2008)

There is, absolutely, a simple way to fix this. it is not, at all, complicated. But whenever someone suggests that the free market is not an appropriate way to provide health care, some folks get worked up into a dither and make things much more complicated than they are. These are, invariably, people who don't think much about health care and its costs because it doesn't seem that it affects them, even though it does. Ultimately, someone pays for profiteering, and that someone is, in most cases, is everyone.

Medicare works. We should have it for everyone. Why people object so strenuously on socio-political grounds to a proven system, I will never fathom. But it is hard to argue that health care costs would rise if we had Medicare, and the cost controls contained within Medicare, for everyone. Instead, we rely on the private sector, and we pay more for health care than darn near any other nation on the planet yet do not have close to the best care.

Since some folks think that the NYT is a lefty-can't-be-trusted rag, here is a good summation from Forbes: https://www.forbes.com/sites/danmun...ked-dead-last-compared-to-10-other-countries/

And we just keep doing what we're doing, pretending that somehow the private sector can improve itself.



vpkozel said:


> Y'all are overcomplicating this to the Nth degree. It can all be somved with a few simple questions.
> 
> Is there a system to allow for new ways of doing things and the protection of that work for a defined period of time?
> 
> ...


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## L-feld (Dec 3, 2011)

vpkozel said:


> Y'all are overcomplicating this to the Nth degree. It can all be somved with a few simple questions.
> 
> Is there a system to allow for new ways of doing things and the protection of that work for a defined period of time?
> 
> ...


Based on the information in this article, it does not appear that this is an issue with the patent system. The drugs in question are not under patent protection. They are priced high because the demand is so low that investors are not willing to gamble on production unless there is a high return, which is a market failure. Prices are properly high when a good is scarce and demand is high. In that case, the price serves to allocate the good to those who want it the most.

In this case, demand is generally low, but for a very small percentage of the population, there is perfect demand. This is a market failure because the good is artificially scarce and it is not allocated appropriately. The demand curve and supply curve are basically not intersecting.

That being said, I'm all for abolishing the patent system, which seems to be what you're driving at. I don't think the profit motive is particularly good at driving appropriate drug research or manufacturing, and, as previously noted, drug companies these days spend far more or advertising than R&D. We have a plethora of useless drugs and not enough of necessary drugs, despite having the infrastructure for it.

Politically, it would be very difficult to abolish the patent system, but a better result could be achieved by heavily increasing patent filing costs, which would discourage the filing of patents in all but the most profitable of scenarios, and then earmarking that revenue for NIH and the CDC.


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## 32rollandrock (May 1, 2008)

Again, excellent points. The issue is, the health care delivery system in the United States is fraught with market failures. You cannot piecemeal solutions to the myriad market failures in the health care delivery system in this country without exponentially increasing problems--it's like playing whack-a-mole. This is why other nations have taken health care out of the private sector. Look at the nations listed in the above-mentioned Forbes article that have better health care than we do at lower costs. None of them rely on the private sector to the extent that we do in the United States.

This cannot go on forever, and at some point, greed becomes its own worst enemy. The current system is doomed to failure and will at some point be replaced by Medicare for everyone. It is an economic and political certainty.



L-feld said:


> Based on the information in this article, it does not appear that this is an issue with the patent system. The drugs in question are not under patent protection. They are priced high because the demand is so low that investors are not willing to gamble on production unless there is a high return, which is a market failure. Prices are properly high when a good is scarce and demand is high. In that case, the price serves to allocate the good to those who want it the most.
> 
> In this case, demand is generally low, but for a very small percentage of the population, there is perfect demand. This is a market failure because the good is artificially scarce and it is not allocated appropriately. The demand curve and supply curve are basically not intersecting.
> 
> ...


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## SG_67 (Mar 22, 2014)

32rollandrock said:


> This cannot go on forever, and at some point, greed becomes its own worst enemy. The current system is doomed to failure and will at some point be replaced by Medicare for everyone. *It is an economic and political certainty*.


I agree. Right after our collective farm experiment succeeds.


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## 32rollandrock (May 1, 2008)

Actually, we are already engaged in collective farming. Have been for years. Anyone familiar with the finer points of the farm bill and farm subsidy system would know this.



SG_67 said:


> I agree. Right after our collective farm experiment succeeds.


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## MaxBuck (Apr 4, 2013)

32rollandrock said:


> Drug reps do, *with some degree of regularity* as I understand things, visit doctors and dangle junkets to Hawaii and other wonderful places before physicians who hold the key to their financial success, if not the health of patients.


Not anymore, they don't. You should do a little fact-checking before you post this stuff. Docs who accept this sort of inducement are subject to severe consequences related to ethics violations (and so they're seldom offered and even more seldom accepted).

"Parasites masquerading as investors" does not, in fact, imply that investors are parasites (i.e., the Venn diagram represents a subset only). My apologies for the error.


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## MaxBuck (Apr 4, 2013)

32rollandrock said:


> Ah. So you are, in fact, reaping the benefits of socialized medicine. And what if you had had the misfortune to *fall victim to a life-threatening disease* ... *whilst between jobs*, and without medical insurance, when you were a younger man?


This has, in fact, happened to me. I dealt with it. It wasn't easy, and we should have better ways to assist people faced with these problems, but suggesting systems other than our US capitalism do it better overall? Just nonsense.


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## Shaver (May 2, 2012)

MaxBuck said:


> Not anymore, they don't. You should do a little fact-checking before you post this stuff. Docs who accept this sort of inducement are subject to severe consequences related to ethics violations (and so they're seldom offered and even more seldom accepted).
> 
> "Parasites masquerading as investors" does not, in fact, imply that investors are parasites (i.e., the Venn diagram represents a subset only). My apologies for the error.


How do these facts grab you?

https://www.justice.gov/opa/pr/john...ion-resolve-criminal-and-civil-investigations

https://www.justice.gov/opa/pr/glax...-resolve-fraud-allegations-and-failure-report

https://www.justice.gov/opa/pr/abbo...civil-investigations-label-promotion-depakote

https://www.justice.gov/usao-cdca/p...r-15-million-resolve-allegations-it-illegally

Big Pharma is rotten to the core and cares not for the health of its customers but only for the health of its super-normal profit margins.


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## 32rollandrock (May 1, 2008)

MaxBuck said:


> This has, in fact, happened to me. I dealt with it. It wasn't easy, and we should have better ways to assist people faced with these problems, but suggesting systems other than our US capitalism do it better overall? Just nonsense.


It is good that you managed to negotiate big medical bills while unemployed and uninsured. But a lot of people cannot do that, and they are not irresponsible swine. Unforeseen medical bills are a leading cause of bankruptcy in the United States. To expect someone who will never make more than $40,000 a year to settle a hospital bill rising well into the six figures isn't realistic. You can go anywhere in this country and see donation jars set by cash registers in Ma and Pa restaurants and other small businesses, asking folks for donations to defray medical expenses for a family unlucky enough to have a kid diagnosed with cancer. That is a national disgrace, in my opinion. What, I wonder, do tourists from nations fortunate enough to have better health care systems think when they see these jars? I know what I would think.

i will add that you enjoy Medicare benefits. I'm just sayin'.

If you don't believe me, check out the story in Forbes, which is hardly a liberal publication. We pay more for health care than any nation on the planet, yet our quality of care ranks eleventh. Every nation ranked higher than the United States does not rely on capitalism to save and prolong lives. The only folks in the U.S. who object to Medicare for everyone are health care providers, insurance companies and ideologues who automatically reject any model other than the free market. Medicare is not charity. We are all paying for health care but via an inefficient system that puts profit ahead of public welfare. That, really, is the nut of it. The only ones that would suffer under a Medicare for everyone model is insurance companies (which would go out of business) and health care providers (who would make less than they do now but would still rank near the top of income earners in this country).


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## L-feld (Dec 3, 2011)

32rollandrock said:


> Actually, we are already engaged in collective farming. Have been for years. Anyone familiar with the finer points of the farm bill and farm subsidy system would know this.


Farm subsidies are actually a great case study showing that the answer of government intervention and subsidy is not a particularly simple one and requires a ton of finesse, policy research, trial and error, etc. They have at various times been an amazing tool and, more recently, amounted to something of a policy disaster. I say this with the caveat that, although I studied soil chemistry in college and know a little about chicken farming policy, my specialty disability law and policy, not agricultural law and policy.

That being said, your article from Forbes shows that there isn't simply a single solution to the healthcare issue. And I don't mean that as an attack, since I'm on your side. More than anything, I mean that as a rebuttal to people on here who act like the failures of the Soviet Union somehow imply that the free market is the only viable option, as if authoritarianism and free market capitalism were the only two economic systems available.

One could actually make a good argument that the system is not necessarily the issue, so much as it is how the system is managed. If you look at the Forbes article, the two overall best countries are England and Switzerland. England has a fully socialized healthcare system, while Switzerland has a sort of Obamacare-on steroids system. England's works extremely well, coming in first in nearly every domain (except for overall health, which just goes to show you that you can have the best healthcare on the planet, but there will always be other factors to interfere). Switzerland's system works pretty well and works pretty consistently. It's not the best, not the worst, but the consistency makes it compare well to other countries. One stark contrast, though, is that England's cost is significantly lower than Switzerland's, and one of the lowest overall, indicating that a fully nationalized healthcare system can in fact control costs very well.

Alternately, compare England to Sweden or Norway, both of which also have fully nationalized healthcare. They have terrible ratings in terms of quality and efficiency of delivery of healthcare (which are, IMHO, the really important areas). Sweden at least has fairly low costs, but Norway's costs are similar to Switzerland's. This shows that a fully nationalized healthcare industry can be enormously efficient and effective, or it can be a flop.

It's interesting to see that single payer countries come out in the middle. Their costs are relatively low, and their quality and efficiency of care are fairly middle-rate. Which suggests that by switching to a single payer system, the US's healthcare probably wouldn't get much worse, but it would probably get cheaper.

A fully nationalized system is more of a gamble and can work swimmingly, but comes with a lot of risks. I would like to see a more detailed comparison between Sweden/Norway and England to see where they differ. I think we could learn a lot about what works and what doesn't by comparing the two.


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## SG_67 (Mar 22, 2014)

At the risk of veering off topic, as rare as it is on the interchange, farm subsidies are in a way a testament to the efficiency of our modern agricultural system. 

Think of how plentiful and cheap our food is.


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## 32rollandrock (May 1, 2008)

Happy to veer off topic, but first, L-feld has, I think, provided an outstanding analysis.

With regard to farm subsidies, many farmers, actually, hate them. I found this out a few years ago while talking to farmers here in central Illinois. The farm subsidy program, at least at that time, provided automatic payments to anyone who owned farmland, which meant that folks in Manhattan and Boston were getting checks. The practical effect has been to inflate the price of farmland to the point where large landowners, notably the University of Illinois, moved to cash rents, whereas previously land had been allocated on, for lack of a better word, a sharecropping basis. Huge operations that could afford to operate on thin margins prospered; smaller operations couldn't make it and fell by the wayside. Critics will tell you that the centralization of crop production in the United States has a lot to do with the farm subsidy program.

There have been other issues as well, most notably the cultivation of marginal farmland by farmers who don't have to worry whether their crops will come through or not because government subsidies, including subsidized crop insurance, makes it nigh impossible for them to lose money. Historically, crop insurance premiums paid in states such as Iowa and Illinois have gone to pay claims outside the heart of the grain belt, but no one raises too much of a fuss because Uncle Sam is paying most of the freight. Continued support of the farm program, of course, has become a Faustian bargain of sorts as urban lawmakers support it so long as it is tied to food stamps, free school lunches and other programs seen as benefiting urban interests.

We are not alone, of course, Most every other nation subsidizes farming because the food supply is considered a vital national interest. However, New Zealand terminated its farm subsidy program many years ago, and farmers, after a culling of the herd (so to speak) immediately after government support ended, have prospered. Here's a nice, brief overview:

End of day, I think the farm subsidy program is bigger and more expensive than it needs to be. We probably do need some sort of backdrop/insurance scheme to ensure we don't run out of food, but the farm subsidy program, it seems to me, has gone somewhat amok. They do help ensure food is cheap and plentiful by encouraging centralization and consolidation, but, on the other hand, this is also corporate welfare to farming interests that would already be making tons of money without government subsidies.



SG_67 said:


> At the risk of veering off topic, as rare as it is on the interchange, farm subsidies are in a way a testament to the efficiency of our modern agricultural system.
> 
> Think of how plentiful and cheap our food is.


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