This is one reason why the 1990 deficit-reduction package did not cut one program or one bureaucrat or even one penny from total federal spending. Perhaps the most absurd example of this self-perpetuating nonsense is the U.S. farm program. Relatively poor American taxpayers pay relatively rich American farmers billions of dollars each year not to grow food. But for more than fifty years, misguided governmental policy has created strong incentives for regulated rice, wheat peanut, and tobacco farmers to reduce output and raise prices. Sugar subsidies and output regulations make U.S. sugar prices twice the world price.
American consumers pay a twenty percent premium for peanut butter because of peanut subsidies.
Overall food prices would fall twelve percent in the absence of farm price supports. Actually, prices would fall even further if the entire Department of Agriculture were abolished. This is because its farm program requires farmers to idle massive amounts of farm acreage in order to qualify for our tax money. It takes no special expertise to understand that the farm program offends both morality and efficiency. Of course not.