Minding Ag's Business

Crop Insurance Prevents Main Street Meltdown

By  Marcia Zarley Taylor

Crop insurance not only deflected a financial disaster on grain farms after last summer's epic drought, it warded off a meltdown for Main Street businesses as well, a new study by University of Nebraska-Lincoln economists Eric Thompson and Brad Lubben finds.

Farmers in the four states studied--Iowa, Nebraska, South Dakota and Wyoming--had collected a record $4.5 billion in 2012 insurance claims through March 4. Those payments not only helped growers cover losses and afford to plant another crop in 2013, but preserved more than 20,000 jobs in ag-related businesses, the economists concluded.

The study, financed by Omaha-based Farm Credit Services of America, is one of the first to examine the benefits of crop insurance beyond the farm gate. The states in question are key to the nation's grain output, normally supplying about 35% of U.S. corn production. Growers there paid $885 million in insurance premiums to cover 85% of the major crop acres eligible for 2012 insurance, so the net funds recirculating in the farm and rural economy were about $3.6 billion.

Those dollars might look small relative to total farm income, but in Nebraska alone they represented more than 20% of crop producers' 2012 profits, Lubben estimates.

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“This research helps us answer the question: ‘What would have happened in both rural and urban communities if producers had not been protected by crop insurance during the severe drought last year?’” Doug Stark, president and CEO of FCSAmerica says. “The study shows that while crop insurance is critical for farmers, in years of significant loss it also helps stabilize jobs and incomes off the farm as well. Indemnity payments replace some of the income that farmers would have earned from a more normal crop, enabling them to continue investing in their businesses and households."

Droughts have a powerful psychological effect on farmer spending. Last summer, orders for farm equipment, grain bins, trucks and other capital intensive purchases dried up and even normal fertilizer orders were put on hold, retailers told DTN at the time. Between March and September, the DTN-Progressive Farmer Ag Confidence Index, a quarterly survey of 500 farmers nationwide, registered its steepest drop in farmer attitudes since the survey began in 2010. Moods improved considerably once growers assessed how well crop insurance payments and higher commodity prices buoyed incomes.

It's not just the size of 2012 indemnities that matters to farmers and their communities, but the speed they were paid, Lubbens told DTN. In the past, ad hoc disaster programs usually covered extreme losses, but these payments are subject to political deadlock that can drag on for years. Despite the worst drought since at least the 1950s, cattlemen's request for 2012 livestock feed and forage assistance has stalled.

By the time Congress authorizes funds it authorized in January's fiscal cliff legislation, "it may be late 2013 or early 2014 before USDA can pay forage losses in 2012, on cows cattlemen sold in 2013 because they didn't have the money to feed them," Lubbens says. "Even when paid, the indemnities are not timely to the loss and the financial crunch has already come and gone. The sector has already suffered financial damage."

Critics have questioned the necessity of a subsidized crop insurance program, but they forget that Congress has a long history of approving ad hoc aid, especially in election years. Shifting to a private-public partnership where producers pay some of the cost and where claims can be paid in a timely manner offers many economic and societal benefits.

"Without crop insurance, a lot of nonirrigated producers would have been forced to leave after 2012," Lubben said. Droughts are particularly hard on beginning farmers or smaller producers with low equity. So shocks on that scale aren't good for individuals, the demographics of the farm population or the towns and factories across the Grain Belt that depend on them.

For a full copy of the study go to http://www.fcsamerica.com/…

Follow me on Twitter@MarciaZTaylor

(SK)

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Comments

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KEITH PEARSON
3/22/2013 | 7:50 AM CDT
Lon your last comment just proves my point about your collage education.
Lon Truly
3/21/2013 | 6:31 PM CDT
�When the debate is lost, slander becomes the tool of the loser.� � Socrates
Jarrod Bennett
3/21/2013 | 10:02 AM CDT
I'll add this. I've all but quit reading Marcia's blog. Not because of Marcia; I'm VERY interested in her topics and her excellent commentary, but because of one person's neverending comments. I've continued to read Marcia's articles, but seldom ever read the comments. I'm just not interested in the recycled comments over and over and over. It's exhausting folks. Thanks Marcia for your writings, I really enjoy them and hope you continue the crop insurance articles!
Jarrod Bennett
3/21/2013 | 9:47 AM CDT
Tim, you sir are spot on.
Jarrod Bennett
3/21/2013 | 9:47 AM CDT
Tim, you sir are spot on.
Tim Haugen
3/20/2013 | 3:53 PM CDT
....?
Bonnie Dukowitz
3/20/2013 | 6:07 AM CDT
I have not witnessed such childish exchanges since the last time I was in a bar, some 40 years ago. Why some would rather lose the opportunity to contribute do to a lack of respect of the writer and subject matter is beyond me.
Lon Truly
3/19/2013 | 9:30 PM CDT
Threatened is an apt word to describe what the government is doing to smaller farmers when they award insurance subsidies and investment/profit guarantees of extreme value to the most competitive competitors in a highly competitive business.
KEITH PEARSON
3/19/2013 | 8:11 PM CDT
Your welcomed Tim. Lon has been ranting & raveing long enough.
Tim Haugen
3/19/2013 | 5:32 PM CDT
Lon, you have made up your mind. I only got involved with these threads because people like you are the threat. People like you get all worked up about budgets and rich farmers because it's politically and fiscally (in this decade away) easy. People like you troll around comment boards and bash anything succesful. You want fiscal responsibility? How about demanding that EVERY other federal program from defense to medicare take the budget cut that the USDA already handed down to Crop Insurance in the 2008 Farm Bill? We already did the right thing. And now what, you what more? So farmers and many big lobbies are offering up DCP. Boom. Billions more gone. But it still isn't enough, so you call people like me wasteful and unnecessary and overpaid cronies of the rich. You, sir, are a threat to me, when you come on here and make wild claims about jobs you know nothing about. If average Joe taxpayer stumbles across your drivel and no one stands up and says otherwise, that is a threat to me. Thanks for standing up with me, Keith, you and a few others. We all need to battle this bad information. Lon, you might be a great guy that has just bought into the wrong ideas, I don't know, but if you to know who I find threatening...it's people with bad information, wrong ideas, and a keyboard.
KEITH PEARSON
3/19/2013 | 4:36 PM CDT
Lon you accuse me of threatening you personaly witch we both know is wrong. That really doesnt matter, what does matter is that you keep accusing us farmers of doing things that we both know that just dont happen. So what is worse Lon; you telling lies about us farmers or Tim & me telling you the truth about what you are doing. If asked who do you think farmers would agree with you or Tim & me.
KEITH PEARSON
3/19/2013 | 4:01 PM CDT
Lon that was not a personal threat.
Lon Truly
3/19/2013 | 3:54 PM CDT
What was that poliicy you had about personal threats Marcia?
Tim Haugen
3/19/2013 | 1:27 PM CDT
Seems about right, Keith
KEITH PEARSON
3/19/2013 | 12:38 PM CDT
Hi Tim; Lon is a collage educated idiot. He is book smart & common sense stupid!!!!! I would love to have him farm next to me. He would only last one season. Lon would be flat broke by the time I got done with him.
Lon Truly
3/19/2013 | 12:23 PM CDT
It should be obvious to everyone that changes are part of fci's future. See http://spectator.org/archives/2013/03/19/crisis-what-crisis Subsidies are not preferable. Less subsidies are a step in the right direction.
Tim Haugen
3/19/2013 | 11:55 AM CDT
The backpeddling is getting old. Every time you run out of steam, you post the same old "I'm not against subsidies, I just want to pick and choose who gets what"...so we go from "cronyism" to "nepotism"...furthermore, it would be extremely simply to circumvent a system that caps payments by entity. All you do is involve more taxable entities in the operation.
Tim Haugen
3/19/2013 | 11:48 AM CDT
"Future food, fiber, and fuel demands will not be met by expanding cropland area," This is a small tid bit I pick up in a lot of articles. I suppose it has nothing to do with land values, though. I am just a simple recipient of government welfare for zillionaires. Lon, the problem is, I wish you were right! I'd be typing this in Aruba during a 6 month vacation thanks to your land value ideals, not freezing at my self employed job that offers zero vacation, workers comp, unemployment, pension, benefits, paid time off, sick pay, tenure, or maternity leave. Spite us all for getting a little insurance that allows people, especially small producers, to farm year in and year out.
Lon Truly
3/19/2013 | 11:41 AM CDT
As I have said before, reasonable limits on fci subsidies and fci investment/profit guarantees would go a long ways in reducing the crony capitalistic aspects of fci. Also bankers would not be so busy driving smaller producers out of business when pursuing wild goose chases such as Grabanski, Rosentreter, and Stamp. As most of us who are farming know just about every community has a few individuals very similar to these people pursing every dollar that they can find from bankers over eager to grow loan volume based on the open ended nature of federal crop insurance.
Tim Haugen
3/19/2013 | 11:32 AM CDT
As you say, Lon, let's do away with crop insurance, remove acres from production, and reduce ending stocks. This would send markets skyrocketing in a global market that sees ever increasing population with an ever increasing demand for grains and meats. Can any of us imagine this magical Lon world and say land values would not triple? Quadruple? What would happen to small farmers in Lon's world? Suddenly my quarter section isn't just worth an easy $1M, I've got huge corporate farms knocking on my door offering me $5M or maybe even more. $550 cash rent would become a punchline at the coffee shop. Are people like you able to comprehend the true cost of a totally free market alternative, or do you just enjoy complaining about a program that regulates the most affordable food supply in history and costs its society less than 1/2 of 1% of the total budget?
Cypt Frms
3/19/2013 | 9:20 AM CDT
Lon, do you know any of these farmers personally, because I don't know of anyone doing these things that you are accusing me, farmers in general, of?
KEITH PEARSON
3/18/2013 | 8:12 PM CDT
I see Lon is still chirping about how bad crop ins is for the farmer. He must not have any equip to get ready for spring. He has too much time on his hands if he can dream up this ****
Lon Truly
3/17/2013 | 2:24 PM CDT
We all know that some farmers are more than willing to bid land rental rates way beyond levels of probable profitability. We also know that farmers given an $847.50 guarantee of revenue are more likely to bid rental levels a whole lot higher than those receiving no guarantees of revenue. We also know that many farmers do spend $0 for annual land rent and do receive at least $847.50 as a revenue guarantee. These farmers are in fact receiving a massive guarantee of prosperity from the government and are most likely extremely wealthy. Numerous articles point out the low debt levels of America's farmers as well as the fact that cash is being used to pay for many land purchases at record prices. Using government schemes to guarantee extreme prosperity to the wealthiest may be the Detroit, Chicago, and DC way of running government, but it certainly is not a very American way of running a near bankrupt government that is incurring trillions in deficits and has trillions in debt. Obviously Babcock's experiences give him a platform from which he can make many valid observations regarding government crop insurance. I personally do not share his preference for free crop insurance as I feel this too would be capitalized into land valuations and would give a greater benefit to the largest operators. Government policies that steal from hundreds of thousands if not millions of Americans any chance of establishing a farm business are not in America's best long term interests. Government schemes that guarantee a perpetual and over whelming prosperity to the largest operators tend to benefit a few at the expense of the majority. Marcia can at least admit that the massive investment/profit guarantees government is providing are capitalized into land values. Others that are benefiting from the lucrative business of peddling government investment/profit guarantees appear unwilling to admit this.
Tim Haugen
3/16/2013 | 12:57 PM CDT
http://static.ewg.org/reports/2012/farm_bill/babcock_free_crop_insurance.pdf Look at Table 3 on the bottom of Page 20. He uses $1.7B as an A&O expense for 2011. That's odd, because the federal government capped premium earnings for that year at: http://www.rma.usda.gov/aboutrma/budget/cycost2003-12.pdf RMA shows 2011 A&O at $1.383B Another interesting thing he does to skew numbers...when he shows the premium subsidy as a cost to taxpayers, he doesn't plow that back in as a benefit to farmers. Again his numbers are way off base, but simply exaggerating costs isn't enough. He has to show a lofty expense in one area and ignore it when estimating benefits to the recipients (farmer). I could keep going, but I think you get the idea. You want this guy writing policy!?
Tim Haugen
3/16/2013 | 12:42 PM CDT
It's fun to hear people quote Babcock about high subsidies and coverages. His own GRIP policy, which he basically wrote the rules for 10 years ago, calls for 90% coverage at 44% subsidy. Very few people buy it. The ones that do can get paid losses even when they yield 200 Bu corn. If you want Babcock writing ag policy, just look at what he's done in the past: fail, fail, and fail. Another interesting fact: very few farmers have 85% MPCI, so Guebert can speculate all he wants about something he knows very little about. Look at the RP guarantee at 75%...let's even use a high 200 Bu APH. This gives a 2013 producer $847.50 guaranteed revenue. If $550 is sunk into cash rent already, they're not even covering expenses. They're rolling the dice and anyone in sustainable farming knows that. We can sit around and try to blame the RMA and FCIC for coverage that's been offered at the same rates and subsidies for over a decade, or we can look at what's really changed: market prices and land fever. Too bad Lon won't listen to someone that knows a lot about crop insurance because I'm an agent. He'd rather listen to a disconnected journalist and an economist that uses made up numbers to write failure after failure.
Lon Truly
3/15/2013 | 2:17 PM CDT
Crop insurance cuts risk, drives up land prices Latest News by Alan Guebert But questions are likely coming for program. Saturday, December 15, 2012 - 11:25 am Neither the outcome of the federal election nor the fast-approaching budget �fiscal cliff� bothered any of the 250 gawkers and bidders at a 1,170-acre land rental auction Nov. 10 in Thurman, Iowa. That's right, an auction where the right to crop one family's five parcels of Fremont County, Iowa, the absolute southwest corner of the state, went on the block that Saturday at the appropriately named Skyline Sportsman Club. Minutes later, every notion about local land values had surpassed any skyline � nearby Omaha's, the more distant Des Moines' and even that of super-tall Chicago. The winning bids were: �Tract One, 196 acres, all tillable, $545 per acre. �Tract Two, an all-tillable 158 acres, $470 an acre. �Tract Three, 296 acres, all tillable, $520 per acre. �Tract Four, 104 acres, all tillable, $485 per acre. �Tract Five, 417 acres, all tillable with some grain storage, $615 per acre. As stunning as those prices are � an average $548 per acre � the terms of the rental deal are even more stunning. According to Jim Hughes, whose firm, Jim Hughes Real Estate in Glenwood, Iowa, brokered the deal, the land was rented for two years only. Cash rent terms for 2013 are 25 percent of the day of auction, the remainder on March 1, 2013. For 2014, 25 percent is due Jan. 1, 2014; the balance on March 1, 2014. In short, you pay, then pray, then plant. Hughes describes the renters as �local farmers who are willing to risk grain prices and weather on a two-year, $550-an-acre rental deal rather than a 30-year, $12,000-an-acre purchase deal.� Well, mostly. Many ingredients go into the rocket fuel that pushes land values and rents to the moon: commodity prices, aggressive local farmers, excess machinery capacity, cheap labor, low interest rates, federal farm program benefits. A new, major ingredient, however, is federal crop insurance, the heavily subsidized program that delivers an ironclad guarantee on locked-in revenue regardless of weather, commodity prices and federal farm payments. (In 2012, 62 cents of every $1 in federal crop insurance premium were paid by taxpayers.) �Oh, crop insurance played a definite role in the prices,� reckons Hughes. �It's the best thing that ever happened to farmers.� Bruce Babcock, professor of economics at Iowa State University and a faculty member of ISU's Center for Agricultural and Rural Development, agrees. �If you can lock in 85 percent of your expected revenue��the level permitted under current federal crop insurance programs � �you've taken virtually all the risk out farming,� he says. And it will get better. Part, if not all, of the remaining 15 percent of crop revenue presently not insured under the federal program is almost certain to be covered if and when Congress finally approves a 2012 Farm Bill. Both the Senate and House versions raise subsidized coverage over 90 percent. That's an unbelievable move, opines Babcock, at a time when there is a bipartisan call in Congress for all Americans to assume �more risk� � take cuts in federal programs like food assistance, retire at an older age, pay more taxes � in the marketplace in order to cut federal spending. But when it comes to the Farm Bill, Congress is proposing to �ratchet down market risk� � raise the level of subsidized crop insurance � �while doubling down on the cost of these programs rising?� he asks. �This is just insane.� Babcock is exactly right: How can farmers and farm groups ask taxpayers to underwrite an expansion of an already highly subsidized revenue insurance program that guarantees farm income and higher land values but does not � cannot � guarantee food production or conservation compliance? Farmers better come up with an answer quickly, because the question will be asked.
Lon Truly
3/15/2013 | 12:11 PM CDT
The clueless and or corrupt congress ever fixated on re-election has chosen to be oblivious to the economic carnage it is creating with the unfair and inequitable crop insurance schemes. It should be obvious to everyone that targeting the largest and most profitable farm businesses with the largest investment and income guarantees grants these operations with an overwhelmingly competitive edge in a highly competitive business. It should be noted that many of these operations have little or no land costs and that government has no business guaranteeing ever increasing land values with insurance schemes that cover land costs. It should also be obvious that smaller farm operations targeted with no or minimal government benefits have little or no chance of competing in such an economic environment. Considering the stratospheric levels to which land values have escalated it should be obvious to all that extreme government income and investment guarantees are capitalized into land values and that government has no business targeting the wealthiest with multimillion dollar business benefits and billions in insurance subsidies.
Tim Haugen
3/13/2013 | 10:24 AM CDT
That's too funny. Thanks for copy and pasting it for me.
Lon Truly
3/12/2013 | 4:42 PM CDT
Tim - I never said that millionaires have the greatest probability of the greatest profits. I said " For decades Congress has spent billions insuring and guaranteeing the financial durability of a specific group of farmers which has the utmost probability of greatest profitability, the largest farmers."
Lon Truly
3/12/2013 | 4:36 PM CDT
As I have said before, reasonable limits on fci subsidies and fci investment/profit guarantees would go a long ways in reducing the crony capitalistic aspects of fci. Also bankers would not be so busy driving smaller producers out of business when pursuing wild goose chases such as Grabanski, Rosentreter, and Stamp. As most of us who are farming know just about every community has a few individuals very similar to these people pursing every dollar that they can find from bankers over eager to grow loan volume based on the open ended nature of federal crop insurance.
KEITH PEARSON
3/12/2013 | 3:34 PM CDT
Hey guy`s don`t let Lon get to you!!! He`s upset that he didn`t have crop ins last year & he lost his *** because he didn`t have it. I can`t believe a bank would give out a crop loan to any one without crop ins with the input cost going up every year. throw in a drought & it`s worse.
Tim Haugen
3/12/2013 | 2:24 PM CDT
Lon himself said the millionaires are the ones with the "highest probability of profitability" and that's right. Which means they'll be the only ones able to afford nice insurance in a privatized system. In turn, they'll be the only ones left after disasters. Lon is the biggest advocate for destroying rural America and making large farmers larger. Keep spit-balling your imaginary numbers, Lon. It's fun to read about the gazillions of dollars we all make because we hold Congress hostage. I'm going to go warm up my zillionaire-mobile and drive to my private plane and fly to the farmer islands we all own because MPCI pays us money to breathe.
Lon Truly
3/12/2013 | 12:58 PM CDT
If congress was paying many billions to 14 or so private companies to disburse disaster aid to farmers it would also be done promptly. I don't suppose you have noticed Curt that the billions in wealth that congress is targeting at the wealthiest farmers do a great job of eliminating nearly all expansion opportunities for small farmers. Basically the only financially viable beginning farmers are the poor sons of multimillion farmers. Poor sons of poor farmers do not compete with millionaire farmers sons. So again the taxpayer is subsidizing the growth of the largest farms with programs to help poor sons of large farmers.
Curt Zingula
3/12/2013 | 8:09 AM CDT
"It's not just the size of 2012 indemnities that matters to farmers and their communities, but the speed they were paid." Ahhh... new information to digest! Didn't anyone hear of Governor Christie's complaint about the slowness of Hurricane Sandy relief?! Who wants farmers to wait two or three years for our inept Congress to send disaster relief? John Deere? Main Street? The farmer's landlord? The farmer's bank? Here, next to Cedar Rapids, uninsured, displaced home owners of the flood waited up to three years for help - those with insurance were paid in days! BTW, I'm glad that crop insurance isn't a plan to keep the small farmer from becoming extinct. The small farmers in my area mostly have another full time job, are older and financially secure, or simply lack motivation to expand. The only small farmers that deserve preference in my book are the beginning farmers.
Bonnie Dukowitz
3/12/2013 | 6:06 AM CDT
Why, Marcia, is there a need for this, so-called research? If the Economists' would read the history of the Food Security and Rural Development Act, their findings would be obvious without the hoopala. Just looking at the title(s) of these Food Programs, one can conclude the intent of such is not "Welfare for Farmers". What this research is accomplishing is not a new discovery but ending up back at the beginning. By dubbing the Food Bill as Farm Bill, is where the confusion starts. How-ever some do better at siphoning off some profits than others in this program, which is designed to provide an adequate food supply for the American public.
Lon Truly
3/11/2013 | 10:07 PM CDT
Newk - try reading the comments on the following link http://www.agweb.com/article/full-circle_fiasco_stamp_farms_update/ Federal Crop Insurance is one of the most destructive forces ever unleased against smaller family farmers by Congress as it creates extremely narrow margins of profitability. When farmers receive an investment guarantee from congress this enables aggressive farmers to forego budgeting for marketing and production risks and allows these farmers to bid land rent prices to very small levels of profitability. This is workable and beneficial for most large farms, and has proven to be fatal for most small farmers. This transfer of risk assumption from farmers to the federal government resulting in smaller per acre profitability margins is a major cause of the depopulation of rural America. The extreme difference in the fair market value of the federal crop insurance security blankets as well as the subsidy given per policy between large and small farmers is just another example of congress financially discriminating and creating an unlevel and unfair playing field between farmers of different sizes. How is a small or beginning farmer supposed to compete with an established farmer with a highly subsidized multimillion dollar revenue assurance policy? These policies not only routinely guarantee a farmers multimillion dollar investment, but routinely obsurdly even guarantee a per acre profit for the largest farmers. Even John Deere is marketing these in many cases no lose federal crop insurance policies to their mega farmer customers. Congress has given the largest farmers nearly bullet proof investment insurance that does not allow the small a chance to compete in the business.
Newk
3/11/2013 | 8:39 PM CDT
I cannot name a single small farmer in our area who has gone under as a result of being pushed out by a larger farmer. On the other hand, I can name dozens of farmers who have died, retired, or have merged with other operators to become more efficient. Efficiency is the name of the game. Young farmers who are establishing themselves often work a second job to enhance their cash flow. It is easier today to start farming than any other time in US history. Interest rates are low, no-till technology minimizes machinery investments, and genectics have been greatly enhanced. Government programs are in place for new producers and crop insurance provides a revenue support system that reduces risk. I am convinced that agriculture regardless of it's size is the solution to our rural economy and not the problem.
unknown writer
3/11/2013 | 12:47 PM CDT
You can see a circus everyday for free...all you have to do is watch our government at work.
Aaron Cross
3/11/2013 | 12:03 PM CDT
Lon, your comments are misplaced and sound like the drolling of the EWG. Crop Insurance has always been a tool of farmers to protect their bottom line (break even) and most farmers are very supportive in their communities, schools and churches. I know of a farmer in KS that buys the school children tickets to the Shriners Circus every year. Where is the mentality for that in any urban school?
Bonnie Dukowitz
3/10/2013 | 7:35 PM CDT
Thanks Lon, However, you are mistaken. What you describe isthe WalMart mentality to a T. Ten years of tax credits or whatever and down the road they will go for the next break. The morons will follow like sheep with their sales circular. Farms and Farmers at least stay put.
Cypt Frms
3/10/2013 | 12:34 PM CDT
Lon more effecient farming practices has led to the dwindling of small town USA. These towns don't have large manufacturing plants or infrastructure to support such. Gov't spending and outsourcing has led to this not subsidies to the farmers that are keeping us in business and your food supply safe.
Lon Truly
3/10/2013 | 6:58 AM CDT
Marcia - Insane government spending on larger farmers has a profound psycological effect on larger farmer's spending. Small town USA main street has been melting down for decades due to the exodus of small farmers from rural America caused by discriminatory government farm programs. For decades Congress has spent billions insuring and guaranteeing the financial durability of a specific group of farmers which has the utmost probability of greatest profitability, the largest farmers. This immoral spending has come at the expense of smaller farmers who are adversely harmed economically by the increased costs of production caused by this outrageous spending larded on the most profitable group of farmers. The multimillion dollar investment/profit guarantees targeted at those with the largest profits is capitalized into substantially higher land and other farm input costs. Congress is providing billions in help for those who need the help the least. At the same time they are financially kneecapping smaller farmers who are the least financially viable! These operators watch as their financial health is afflicted with overwhelming and suffocating expenses caused by the discriminatory targeting of perpetual and overwhelming prosperity to the most prosperous. The money larded on the wealthiest has quickly flowed back to reelection campaigns. Congressmen are not ignorant â?“ money targeted poor individuals, of course does not flow back in great quantities.