Starter - Expanded States Econ Das

Arizona Debate Institute 2008

1

Pre-Institute Evidence

State Econ DA

States Econ DAs States Econ DAs...................................................................................................................................................................1 ***OHIO CORE 1NCs ........................................................................................................................................................3 Ethanol – Ohio Farm Prices 1NC [1/2]................................................................................................................................4 Ethanol – Ohio Farm Prices 1NC [2/2]................................................................................................................................5 ***OHIO UNIQUENESS....................................................................................................................................................7 UQ: Ohio Econ Up [1/2].......................................................................................................................................................8 UQ: Ohio Econ Up [2/2].......................................................................................................................................................9 UQ: Ohio Ethanol Production Up.......................................................................................................................................10 Wheat UQ/Brink.................................................................................................................................................................11 ***TOP-LEVEL OHIO LINKS.........................................................................................................................................12 2NC: Ethanol Link Wall [1/2].............................................................................................................................................13 2NC: Ethanol Link Wall [2/2].............................................................................................................................................14 2NC: Lifting Subsidies – Link Expansion..........................................................................................................................15 A2: Ohio Doesn’t Get many Subsidies...............................................................................................................................16 A2: Dairy Turn....................................................................................................................................................................17 ***OHIO ECONOMY INTERNAL LINKS......................................................................................................................18 2NC: Farmland Prices I/L...................................................................................................................................................19 Ohio Economy I/L to Economy..........................................................................................................................................20 Ethanol I/L to Bank Bailouts..............................................................................................................................................21 Bank Bailouts I/L to Economy............................................................................................................................................22 A2: Ohio Not Key...............................................................................................................................................................23 ***IOWA ECON 1NC........................................................................................................................................................24 Iowa Econ Shell (1/3).........................................................................................................................................................25 Iowa Econ Shell (2/3).........................................................................................................................................................26 Iowa Econ Shell (3/3).........................................................................................................................................................27 *** IOWA EXTENSIONS..................................................................................................................................................28 UQ: Iowa Econ Strong........................................................................................................................................................29 Lnx: Iowa............................................................................................................................................................................30 Lnx: Corn Ethanol Key 2 Iowa...........................................................................................................................................31 Lnx: Corn Ethanol Key 2 Iowa...........................................................................................................................................32 Lnx: Corn Ethanol Key 2 Iowa...........................................................................................................................................33 Lnx: CAFOs Key to Iowa...................................................................................................................................................34 Internal Lnx: Iowa dependent on Ag..................................................................................................................................35 *** ARKANSAS ECON 1NC............................................................................................................................................36 Arkansas Econ Shell (1/3)..................................................................................................................................................37 Arkansas Econ Shell (2/3)..................................................................................................................................................38 Arkansas Econ Shell (3/3)..................................................................................................................................................39 ***ARKANSAS EXTENSIONS.......................................................................................................................................40 UQ: Arkansas Econ Strong.................................................................................................................................................41 Lnx: Arkansas ....................................................................................................................................................................42 *** GENERAL ECON CARDS.........................................................................................................................................43 Brink: Ag Collapse..............................................................................................................................................................44 Brink: Ag Collapse..............................................................................................................................................................45 Internal Lnx: US Econ depends on Ag...............................................................................................................................46 Internal Lnx: US Econ Key 2 Global Econ........................................................................................................................47 Internal Lnx: Perception.....................................................................................................................................................48 Internal Lnx UQ: US Econ Ok...........................................................................................................................................49 ***AFF ANSWERS TO OHIO DA...................................................................................................................................50 AFF: No Ag Market Bubble...............................................................................................................................................51 N/U – Ohio Economy Down [1/2]......................................................................................................................................52 N/U – Ohio Economy Down [2/2]......................................................................................................................................53 AFF: Global Warming Kills Ohio Econ.............................................................................................................................54 AFF: Turn – Dairy..............................................................................................................................................................55 ***AFF ANSWERS TO IOWA..........................................................................................................................................56 Non-UQ: Iowa Econ Low Now..........................................................................................................................................57 Iowa No Lnx.......................................................................................................................................................................58

Arizona Debate Institute 2008

2

Pre-Institute Evidence State Econ DA Turn: Iowa & Ethanol.........................................................................................................................................................59 ***AFF ANSWERS TO ARKANSAS...............................................................................................................................60 Non-UQ: Arkansas Econ Low Now...................................................................................................................................61 ***GENERAL AFF ANSWERS........................................................................................................................................62 Cutting Subsides Saves Money...........................................................................................................................................63 No Internal Lnx...................................................................................................................................................................64 Internal Lnx Non-UQ..........................................................................................................................................................65 No Mpx to Cutting Subsides...............................................................................................................................................66

Arizona Debate Institute 2008

3

Pre-Institute Evidence

State Econ DA

***OHIO CORE 1NCs

Arizona Debate Institute 2008

4

Pre-Institute Evidence

State Econ DA

Ethanol – Ohio Farm Prices 1NC [1/2] A. Unique Link – farmland prices in Ohio are rising due to ethanol demand Gary T. Pakulski – Blade Business Writer - January 30, 2008 “Prices for northwest Ohio farmland shooting up” http://www.toledoblade.com/apps/pbcs.dll/article?AID=/20080130/BUSINESS06/801300381 access 7-18-08 [nfb] Mary Meyer forked out nearly three quarters of a million dollars to enlarge her northwest Ohio farm by 15 percent last year. But with the price of crops up and demand for land high, she feels lucky to have snagged the 170-acre parcel for $4,300 an acre. "I think prices will continue to go up as long as the grain market stays good," said the 48-year-old Ottawa resident who has nearly doubled her family's farm to 1,500 acres since taking over in 1997 when her father died. Amid record-breaking grain prices, cropland values last year soared 11 percent in Ohio, 15 percent in Michigan, and 13 percent nationally, according to the U.S. Department of Agriculture. At $3,920 an acre, Ohio bested the Michigan average of $3,450 an acre and the U.S. average of $2,700. And in fertile areas of northwest Ohio, values are even higher. In a survey last spring, the lender Ag Credit, of Fostoria, found that top land was fetching $4,500 in several places in the region. Those places included Wood County, up 2 percent, and Henry County, up 10 percent. The figures are for land kept for farming and none converted to housing tracts. Current values probably are higher, said Bill Eirich, chief appraiser for Ag Credit. "Values have gone up since spring," he said, attributing the gains to price increases for corn, soybean, and wheat since autumn, along with land purchases as income-tax strategies. Last spring, cropland averaged $3,000 to $3,500 an acre in Hancock County, he said. But over the past three months, four farms sold at an average of $4,300 an acre there. "It's like a leapfrog effect," Mr. Eirich said. Joe Newlove, a Wauseon auctioneer who specializes in agricultural property, speculated that the increases are being driven by rising demand for corn from producers of the gasoline substitute ethanol. Grain prices have been at or near record highs in recent weeks, added Jim Swartz, assistant manager of Luckey Farmers Inc., an agricultural cooperative in Luckey. Wheat has been trading at more than $9 a bushel, soybeans at nearly $12, and corn at about $5. Besides ethanol production, factors include rising exports driven by the falling U.S. dollar and growing world population, Mr. Swartz explained. Despite problems in other sectors of the economy, confidence is rising among farmers, agriculture experts said. "We're seeing farmers bidding up rent and land prices with the expectation that they will be able to grow crops quite profitably," said Joe Logan, president of the Ohio Farmers Union, a lobbying group.

B. Cutting subsidies tanks farm prices, causing loan defaults that force a bailout of agricultural banks Russell L. Lamb - assistant professor in the Department of Agricultural and Resource Economics at North Carolina State University. WINTER 2003-04 REGULATION “ The New Farm Economy” online [nfb] HOW DO WE GET THERE? Allowing market forces to guide the New Farm Economy toward a more efficient supply chain structure would benefit consumers and producers. But the U.S. farm economy has a 70-year history of government intervention into agricultural markets through subsidies and supply management. How can we move to a market- guided New Farm Economy with the least turmoil? Cold turkey? If the goal is to allow market forces to guide the New Farm Economy, why not end subsidies and supply management policies today? An immediate shift to a market-forces policy might be expensive for U.S. taxpayers. For example, farm subsidies have been tied to historical production on farm “program acres.” The effect has been to boost the prices that buyers are willing to pay for land. Removing farm subsidies entirely, or lowering them dramatically, could result in a decline in farmland values of as much as one-third, even in the highly productive Midwest. Declines in farmland values could seriously disrupt rural communities. Because farmland purchases are often financed with considerable debt, a drop in farmland values would result in large losses for many agricultural banks. Such a decline could necessitate yet another taxpayer financed bailout of agricultural banks like that of the 1980s.

Arizona Debate Institute 2008

5

Pre-Institute Evidence

State Econ DA

Ethanol – Ohio Farm Prices 1NC [2/2] C. Impact – panic from another bank bailout wrecks the global economy Zachary Kouwe – New York Post Reporter - March 15, 2008 “US ECONOMY'S COLLAPSE FEAR PLUMMET AMID STEARNS BAILOUT” http://www.worldproutassembly.org/archives/2008/03/us_economys_col.html accessed 7-20-08 [nfb] -- A tsunami of fear slammed the financial world yesterday as one of Wall Street's biggest investment banks teetered on the brink of collapse and the federal government was forced to engineer an unprecedented rescue. Stocks were pummeled across all sectors, with the Dow Jones industrial average swinging wildly, falling as much as 360 points between the day's highs and lows. The chaos eventually ended with the Dow down 194.65 points to 11,951.09 - a seemingly welcome relief from the bloodbath earlier in the day. But every major index fell by 1.5 percent or more. The panic struck trading desks early in the morning when the Federal Reserve announced that it was invoking a procedure from the Great Depression to save Wall Street giant Bear Stearns from going belly-up. The near-collapse of the investment bank served as another reminder to investors that the global credit crisis continues to wreak havoc on the economy. Bear is the fifth-largest investment bank on Wall Street and a significant player in the market for securities backed by mortgages. The government essentially stepped in to provide desperately needed access to cash for Bear, which has been pummeled over concerns about its large holdings tied to the battered US housing market. With traders and investors worried the bank was running out of money to pay debts, its ability to do business was virtually halted. "We have been subject to a significant amount of rumor and innuendo over the past week," said Bear CEO Alan Schwartz. "Given the nervousness, people wanted to protect themselves." While some on Wall Street initially saw the Fed's bold rescue as a positive move to prevent the collapse of a giant financial institution, the reaction soon turned to panic as worries grew that other banks might suddenly also be vulnerable to the same cash crunch. "The firm did not have enough cash to pay its debts at that point in time and would have gone under were it not for the Fed," said one banker involved in arranging the bailout. "Regulators felt that Bear Stearns could not be allowed to fail." Shares of Bear Stearns lost nearly half their value yesterday and the bank said it has hired an outside adviser to pursue options - Wall Street shorthand for finding a buyer for the firm. "We are in a tenuous market environment and experiencing a true crisis of confidence," said Oppenheimer analyst Meredith Whitney. The grim news came in a week that saw the Dow soar a whopping 416 points on Tuesday after the federal government said it would ease the credit crunch by allowing banks to use their mortgage-tainted holdings as collateral to borrow cash. That good news was followed by a ray of hope on Thursday, when Standard & Poor's surprisingly said "the end is now in sight" for subprime mortgage-related write-downs by the major banks. However, yesterday's meltdown now has US and global markets bracing for another shoe to drop.

Lastly, extinction Norman Bailey - Consulting economist to Potomac Foundation, Former Senior Director of International Economic Affairs, White House National Security Council, Former Professor, City U. of New York - 1990 The World and I, p. 33 The thirties after all began three months after the inception of the Great Depression and ended four months after the start of World War II. This is no a coincidence. Tens of millions were killed and maimed in the Second World War. If another historical credit liquidation cycle is allowed to take place in the usual chaotic fashion the chances of another global armed conflict will be greatly increased – this time not only would hundreds of millions (rather than tens of millions) be killed or wounded but the very hopes and future of mankind, as such, might well be destroyed in the process.

Arizona Debate Institute 2008 Pre-Institute Evidence

6 State Econ DA

Arizona Debate Institute 2008

7

Pre-Institute Evidence

State Econ DA

***OHIO UNIQUENESS

Arizona Debate Institute 2008

8

Pre-Institute Evidence

State Econ DA

UQ: Ohio Econ Up [1/2] Ohio economy up – their housing market is growing Michelle Jarboe - covers real estate for the Cleveland Plain Dealer – 7-24, 2008 “Home sales fall in June, but Ohio bucks national slide” http://blog.cleveland.com/business/2008/07/home_sales_fall_in_june_but_oh.html accessed 7-24-08 [nfb] Home sales in the Buckeye State rose from May to June, marking their fifth consecutive month of growth even as national home sales slid. Sales of new and existing homes across Ohio rose 7.6 percent last month -- but still lagged June 2007 sales by 16.4 percent. That pattern was mirrored across much of Northeast Ohio, where the housing market perked up heading into summer but remained far below last summer's sales activity. One exception was Cuyahoga County, where sales held nearly flat from June '07 to June '08.

Ohio economy stable – high bond ratings prove Business Wire 7-22, 2008 “Fitch Rates $37MM Ohio Capital Facilities Bonds 'AA'; Outlook Stable” http://www.marketwatch.com/news/story/fitch-rates-37mm-ohio-capital/story.aspx?guid={2AFFCD08-F2154C79-B019-1940E11A5143}&dist=hppr accessed 7-24-08 [nfb] NEW YORK, Jul 22, 2008 (BUSINESS WIRE) -- Fitch Ratings assigns an 'AA' rating to $36.8 million State of Ohio (Treasurer of State) capital facilities bonds, consisting of: --$30 million mental health capital facilities bonds, series II-2008A, and --$6.8 million cultural and sports facilities refunding bonds, series 2008A. The bonds are expected to sell via negotiation on or about July 29. Fitch also affirms the 'AA' rating on approximately $2.6 billion of outstanding appropriation bonds of the state and certain agencies. The Rating Outlook is Stable. The 'AA' rating on bonds backed by Ohio's lease appropriations reflects the state's general credit standing, sound lease structures, the broad state purposes of financed projects, and constitutional authorization for these types of bonds. Debt service on the bonds is paid from appropriations to the relevant departments for lease payments; for the mental health lease bonds, the state also pledges patient receipts, principally reimbursements from Medicaid and Medicare. Ohio's 'AA+' general obligation (GO) rating reflects its careful financial management, a demonstrated record of maintaining fiscal balance, and a moderate, rapidly amortizing debt burden. Fitch will continue to monitor closely the state's challenged economic situation. The long-term erosion of manufacturing has been exacerbated by a housing market downturn and the weakening national economy, leading to declines in employment and clouding the state's nearterm economic and fiscal outlook. The state expects to update its economic and revenue forecast in August. State fiscal management has been conservative. In response to economic weakening, in February the state lowered its revenue forecast for the fiscal 2008-2009 biennium, largely in the fiscal 2009 forecast, and instituted spending cuts and other measures to maintain budgetary balance. Actual tax revenues for fiscal year 2008 were 0.6% below the reforecast figures, led by weakening in personal income and non-auto sales taxes. Lower than forecast spending nonetheless helped the state to achieve an ending fund balance of $808 million, or 3.8% of revenues and transfers. Fund balance is projected to fall to $240 million at the end of fiscal 2009.

There’s a stable trend of economic growth in Ohio JAY MILLER - government and economic development reporter – 7-11, 2008 “Strickland touts Ohio's economic virtues” http://www.crainscleveland.com/article/20080711/FREE/946523453/1099&Profile=1099 accessed 7-24-08 [nfb] Gov. Strickland said Ohio is the only state that has grown its industrial exports every year for the last decade and that it has led the nation in attracting new businesses, according to Site Selection magazine. Yet, he said with a little frustration, it is the Sun Belt states that are touted for their growth, even though that growth started from a smaller economic base than Ohio’s. “We’re not going to match the growth rate of the states with fewer assets,” he said. “But we are bigger, stronger and more prosperous.”

Arizona Debate Institute 2008

9

Pre-Institute Evidence

State Econ DA

UQ: Ohio Econ Up [2/2]

Ohio’s economy is growing Brian Hyslop - Pittsburgh Post-Gazette – 7-24, 2008 “Regional economy shows improvement” http://www.post-gazette.com/pg/08206/899084-28.stm accessed 7-24-08 [nfb] Despite weaknesses in parts of the housing and retail sectors, the economy in the Federal Reserve's Fourth District, which includes Western Pennsylvania, Ohio and parts of Kentucky and West Virginia, improved slightly in the early summer. According to the Fed's periodic survey of regional banks, known as the "Beige Book," which was released yesterday, the regional housing industry remains weak, with no improvement expected for the remainder of the year. Home builders reported flat to declining sales, and half of the respondents to the survey said they had reduced the list prices on new homes. They also reported price increases for concrete, shingles, metal products and fuel, although lumber prices reportedly were stable to declining. On the other hand, most commercial builders reported that business was expanding. Bankers in the district reported that home mortgage origination was slow, with lending standards remaining very tight for the foreseeable future. Higher costs for food and gasoline appear to be taking their toll. Grocery store managers reported that sales were flat to declining. Auto dealers also reported that purchases of new and used cars were flat to down, the exception being fuelefficient cars, which are "selling well." Purchases of SUVs and trucks were characterized as poor. Overall consumer spending was reported as sluggish or slowing in nearly all districts. The Fourth District was an exception to the trend, characterizing sales as stable to improving, outside of the grocery sector. Regional output by factories was largely stable during the past six weeks with manufacturers expecting a slowdown in orders during the upcoming months. Manufacturing activity declined in many other Fed Districts. Employment levels in the Fourth District were largely unchanged with the most job vacancies reported in health care, energy, steel and chemicals. [survey is based on information supplied by the Fed's 12 regional banks collected on or before July 14]

Ohio has an award-winning economy ODOD - Ohio Department of Development – 7-23, 2008 “OHIO WINS SILVER SHOVEL AWARD” http://www.odod.state.oh.us/newsroom/releases/1944.asp accessed 7-23-08 [nfb] Columbus, OH -- Lieutenant Governor Lee Fisher today announced that the State of Ohio has been awarded a Silver Shovel Award from Area Development magazine for its 2007 accomplishments in attracting new business opportunities and supporting company expansions that create jobs. Ohio was a winner among states with populations of more than 10 million and the June/July edition of the magazine highlights the award. "This recognition highlights the work we are doing in coordination with our partners across the state to help drive Ohio's economy," said Lt. Governor Fisher, who also serves as the Director of the Ohio Department of Development. "We had many important achievements in 2007 in the areas of business and industry attraction, community and urban development, and innovation and technology. The hard-work of our community and business partners is crucial to our economic growth and is what makes Ohio a state of great strength and promise."

Arizona Debate Institute 2008

10

Pre-Institute Evidence

State Econ DA

UQ: Ohio Ethanol Production Up

Ohio ethanol boosts the local and regional economy – investment is up ABC 7-21, 2008 http://abclocal.go.com/wtvg/story?section=news/local&id=6278123 accessed 7-23-08 [nfb] About 65 million gallons of ethanol are produced in Leipsic every year. The plant generates more than $150 million in revenue every year and the parts of the corn that aren't used for ethanol are used to feed livestock. The corn by-product that's used to feed livestock is another big money maker for the plant. While the ethanol produced in Leipsic is mainly used in Ohio and Michigan, plant managers say it also has a much broader impact. The same company that operates the Leipsic facility plans to have two other Ohio plants up and running by the end of the year, one in Marion and one in Fostoria. With the two new plants, Poet has invested more than $350 million in Ohio. The company was started on a family farm in the western U.S. [FYI: Leipsic is a town in Ohio, population ~2200]

Ohio is pursuing ethanol, it’s key to economic stability Howard J. Siegrist - extension educator at Ohio State University Extension –7-17, 2008 Newark Advocate “Farm Science Review coming in September” online accessed 7-23-08 [nfb] http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080717/NEWS01/807170343/1002 [nfb] # With agricultural costs increasing and grain prices soaring, managing the farm can be tricky. Enterprise budgets, land rents and custom rates will be part of a farm management program being offered in the Firebaugh Building, located on Friday Avenue. Exhibits on confined animal feeding operations and OSU Extension's new livestock ventilation trailer will be displayed in the Firebaugh Building. # From ethanol to wind power to hydrogen fuel cells, interest in bioenergy continues to grow. Look for a wide variety of bioenergy topics from both Ohio State and Purdue universities during the event. The exhibits will be housed in the Energy Education tent at Alumni Park.

Arizona Debate Institute 2008

11

Pre-Institute Evidence

State Econ DA

Wheat UQ/Brink Wheat farmers are on the brink – only high food prices keep farms in business CHRIS KICK - iStockAnalyst Staff Writer – 7-22, 2008 “Farmers Cutting 'Quality' Wheat Crop” http://www.istockanalyst.com/article/viewiStockNews+articleid_2423691~title_Farmers-Cutting.html accessed 723-08 [nfb] WOOSTER -- Most of the area's wheat crop appears to be harvested, and some area farmers have already baled straw from the remaining stubble and planted a follow-up crop, such as soybeans or alfalfa. The National Agricultural Statistics Service reported that 99 percent of Ohio's winter wheat crop was ripe, identical to last year. Forty-three percent of the winter wheat was harvested last week, compared to 94 percent this time last year. But mostly-sunny weather the past week has helped local farmers catch up on the harvest. Will Spreng, an agronomist and field consultant for Loudonville Farmer's Equity, which serves farmers in Wayne, Holmes and Ashland Counties, figured about 75 percent of the local wheat crop had been harvested as of Thursday. As of Thursday, Spreng figured the mill had received about 50,000 bushels of wheat. He said the quality was mostly good, with moisture percentages between 13-18 percent. If the moisture is too high, and if the wheat is stored in a metal wagon for too long, the potential for mold is increased, he said. Spreng said if wheat must be stored for long periods of time it should be well aired, by transporting it from one wagon to another, or in some other way causing aeration. "It doesn't take long for it to heat up in a wagon," said Mark Trenchard, a grain merchandiser for Town & Country CoOp. Trenchard figured Town & Country's Smithville location had received about 800,000 bushels of wheat as of mid-last week. He said the mill will probably take in more wheat this year than last year, but was unsure how much more. This year's Ohio wheat crop was forecasted to be 67 bushels per acre, an increase of 4 bushels over last year. Most area markets are buying wheat for more than $6 a bushel, among the highest prices in at least the last 40 years. But with the cost of growing wheat on the rise, the margin of profit may not be as high as anticipated. "We're not gaining anything over the last 40 years," said Clayton Arnholt, who grows wheat south of Wooster. Arnholt, who also does custom combining, said this year's crop is a good one and figured his own wheat produced 65 bushels an acre, almost what the state forecasted. The market is good, he said, but increases in the cost of diesel fuel and fertilizer have taken away the profit potential for him and most farmers. Several of the area's feed mills have remained open later into the night than usual, to accommodate the wheat farmers are harvesting. Trenchard said Town & Country of Mansfield has been staying open until 7 p.m., compared to the normal closing time of 4:30 p.m.

Arizona Debate Institute 2008 Pre-Institute Evidence

12 State Econ DA

***TOP-LEVEL OHIO LINKS

Arizona Debate Institute 2008

13

Pre-Institute Evidence

State Econ DA

2NC: Ethanol Link Wall [1/2] Ethanol is boosting land values in Ohio – farmers have made the transition to corn, cutting subsidies would cause a ripple effect throughout the region Jim McTague - Barrons Financial Weekly, Washington Editor -December 31, 2007 “Don't Bet the Farm” http://online.barrons.com/article_print/SB119882116265055389.html?mod=b_hps_9_0001_b_this_weeks_magazi ne_home_top accessed 7-23-08 [nfb] YOU'VE LIVED THROUGH THE TECH-STOCK BUBBLE. The dot-com bubble. The residential-real-estate bubble. Now, get ready for the cropland bubble. - At year-end 2007, farms -- the latest count shows that the U.S. has 2,089,790 -- are what Miami condos and San Diego McMansions were at year-end 2004: properties so hot that they're likely to have a meltdown in their future. As city slickers in many parts of the nation see the market prices of their homesteads deflate faster than a New Year's party balloon, farmers are watching the values of their land swell by annual doubledigit percentages. Nationwide, farmland prices skyrocketed 50% over the past three years, to an average of close to $2,200 an acre through August, according to the U.S. Department of Agriculture. While that's the latest month for which federal data are available, there's no doubt that prices are still sprinting ahead. - Ground zero for the phenomenon could very well be Iowa, which, like a newly active volcano, sits at the center of a massive dome of rising farm and pastureland prices stretching across America's heart and beyond, from Ohio to the Dakotas. Bidders for Iowa farmland have become almost as eager as the politicians scurrying around the Hawkeye State desperately stumping for next month's presidential caucuses. Mike Duffy, an economics professor at Iowa State University, calculates that the average year-end farm price in the state will be a record $3,908 an acre -- $508 higher than the USDA's August estimate (see map). Prices will have jumped an average 22% this year, he estimates. THE PHENOMENON ISN'T confined to the Midwest. In some Eastern states, where residential development has squeezed farmland supply, prices have doubled over the past five years. (The costliest U.S. farms are in Rhode Island, averaging $12,500 an acre.) And in the West, states like Montana and Wyoming have seen prices of both farm- and pastureland soar. Virginia Benz, a broker at Prairie Rose Real Estate in Steele, N.D., says that good, productive farmland is up 30% this year in her state, to the highest level she's seen in her 30 years in the business. Even "the poorest, most unproductive land is selling for $600 an acre," she marvels. Some purchasers are from Minnesota, where rural land is even pricier. All bubbles have catalysts, real or perceived. The tech-stock boom was driven by the belief that technology was changing both our lives and investment realities. And the residential-realty boom was driven by faith that interest rates would stay very low and that the baby boomers' wealth would keep the new, second- and vacation-home markets robust for decades. The catalysts in the farmland bubble are federal subsidies to ethanol producers and the belief that ethanol demand will keep rising and that China's and India's new wealth will keep boosting global commodity prices. Indeed, U.S. farmers are switching to corn from other crops, curbing supplies of food grains. Nationwide, from 2002 to 2007, the number of acres on which corn was planted rose 24%, to 86.1 million. And the energy bill recently signed by President Bush and strongly backed by both parties mandates that oil refiners eventually boost ethanol use as a gasoline additive to 36 billion gallons a year from the current seven billion gallons.

Our link-magnitude is huge – ethanol is up, and fueling the Ohio economy ABC 7-21, 2008 http://abclocal.go.com/wtvg/story?section=news/local&id=6278123 accessed 7-23-08 [nfb] One of Ohio's biggest vegetable crops is ending up in gas tanks and a Putnam County plant helps make that happen. Northwest Ohio corn could actually help save you money at the gas pump. There are 60,000 bushels of corn grown here in northwest Ohio that are turned into ethanol at the Poet Biorefining plant in Leipsic every day. Up to a ten-percent blend of ethanol can be used in any gas and some say, because ethanol is cheaper than gas, it's saving you money-- some studies show between 29 and 40 cents a gallon. It's also helping local farmers make money. The ethanol plant has also been a big boost to the Leipsic economy. The plant employs about 45 people and some grain elevators are adding workers because of the new plant.

Arizona Debate Institute 2008

14

Pre-Institute Evidence

State Econ DA

2NC: Ethanol Link Wall [2/2] Mid-west growth from ethanol production is key to offset full U.S. recession Economist Feb 7th 2008 “The geography of recession” http://www.economist.com/world/na/displaystory.cfm?story_id=10650727 access Montana and Michigan mark the divergence that lies behind America's aggregate economic figures. National statistics suggest that the country may have already tipped into a formal recession. Output rose by only 0.6% at an annual rate in the last three months of 2007, a figure that could easily be revised down to a fall. Residential construction is plunging, house prices are dropping, consumer spending is slowing and the economy shed 17,000 jobs in January, the first such decline since 2003. A monthly gauge of services activity, published on February 5th, has fallen dramatically and now suggests recessionary conditions. The big question—particularly for those on the presidential campaign trail —is where will the pain be felt most acutely, and how far it will spread. So far, much of the misery has been concentrated in one sector—housing—and in two distinct sets of states: the industrial Midwest and those states that saw the biggest housing bubble, particularly California, Nevada, Arizona and Florida. These two groups are disproportionately important politically. They include many states that voted early in the primary races. Several of them (such as Michigan and Florida) are traditionally swing states in the general election. The situation is still grimmest in Michigan, Ohio and other erstwhile manufacturing strongholds, where the subprime bust came on top of the secular loss of factory jobs. But the most dramatic weakening has been in bubble states. Economies that were buoyed by booming construction and soaring house prices are now being dragged down. California's mighty economy is visibly wobbling. In some cities, house prices are falling at double-digit rates and the unemployment rate has jumped from 4.8% to 6.1% in the past year, an increase twice as steep as the national trend. In Los Angeles, the weak dollar and slower consumer spending have sharply cut import-traffic through the port. This downturn is not as gut-wrenching as those in the early 1990s or 2001, when core industries such as defence and technology suffered badly. But it is steep enough to have thrown the state's budget into disarray and derailed Governor Arnold Schwarzenegger's ambitious plans for health-care reform. In Florida, Nevada and Arizona the story is similar: plunging house prices, rising foreclosures and disproportionate increases in unemployment. Not all is gloomy: in these states, as in the rest of America, strong global growth and the weak dollar have buoyed export industries and boosted tourism. (Orlando International Airport, the gateway to Disney World, saw a record number of passengers last year.) But these positives have failed to counter the drag from housing and weaker consumer spending. Mark Zandi, chief economist at Moody's Economy.com, reckons that all four bubble states, along with Michigan, are already in recession. Together, he points out, they make up 25% of America's GDP. Joy on the plains and mountains Move inland from the coasts and away from the industrial Midwest, however, and the picture, for now, looks less grim. A belt running from Texas north-west across the Great Plains and the Rocky Mountains has been doing particularly well, thanks to soaring exports and high commodity prices. Ethanol subsidies and “agflation” have brought a bonanza to the farm states. Agricultural exports are up almost 20% compared with 2006, while farm incomes are growing smartly. Extractive industries are booming. Miners find it worthwhile to dig for copper in Butte, Montana, even though the operators say it is the worst-grade ore in the world. These states now have some of the lowest unemployment rates in the country. With far less of a housing boom, they have also avoided the worst of the subprime bust.

Arizona Debate Institute 2008 Pre-Institute Evidence

15 State Econ DA

2NC: Lifting Subsidies – Link Expansion Lifting commodity subsidies leaves our farmers exposed to protectionism overseas, destroying Ohio and the larger Midwest economy Dan Morgan - Washington Post Staff Writer - October 3, 2004 Page A03 “Farm Revolution Stops at Subsidies” http://www.washingtonpost.com/wp-dyn/articles/A2928-2004Oct2.html accessed 7-20-08 [nfb] But in one essential respect, Skogen is still deeply entrenched in the farm system of the last century. Despite bin-busting crops and strong prices over the last four years, he relies heavily on checks from the federal government. Since 2000, his farm has received about $158,000 from Washington under a program that gives grain, rice and cotton farmers an annual allowance in

good times and bad. Last year -- a banner year in agriculture -- the government paid farmers $6.7 billion in such "direct payments," and $5.4 billion in other types of subsidies, according to figures from the U.S. Department of Agriculture and the Washington-based Environmental Working Group. Over the past nine years, the government has paid out more than 10 times that amount in total subsidies -- a $130 billion government outlay. Skogen's situation bears witness to a persistent dilemma: Even as American farms grow bigger and more efficient, they still demand and receive financial help from the government. Their productivity is itself part of the problem, experts say, because it perpetuates a cycle of bigger crops to meet growing world demand while prices per bushel or bale stay at about what they were three decades ago. While the system benefits many huge, highly profitable farms as well as smaller producers, few in either political

party favor ending the flow of federal dollars that last year went to 1.8 million farmers and generated business and income for banks, real estate brokers, businesses and local governments throughout the Farm Belt. Both political parties are mindful that wheat, corn and soybean farming are vital to such presidential battleground states as Minnesota, Missouri, Ohio and Wisconsin. Such broad-based political support has made agriculture a laggard in the movement heralded after the GOP takeover of Congress a decade ago to reorient the economy toward unfettered markets and reduced government support. That philosophy was the bedrock of the Republicans' "Freedom to Farm" legislation passed in 1996. But subsequent droughts, floods and market upheavals forced Congress to back down. With passage of 2002 legislation, Congress once again embraced more generous subsidies. Those subsidies have come under fire from fiscal conservatives, developing countries and other groups. "Farm subsidies are America's largest corporate welfare program," said Brian Riedl, federal budget analyst for the conservative Heritage Foundation. "The majority of the payments go to large agribusinesses, which promotes the consolidation of farms. It's the plantation effect." Developing nations, meanwhile, have refused

to participate in a new round of multinational trade talks without a pledge from the United States, Europe and other wealthy countries to reduce their $300 billion in annual agricultural subsidies. In a case that some farm groups say could bring down the whole subsidy system, a World Trade Organization panel recently ruled that an array of U.S. cotton subsidies -- though not the direct payments -- was illegal. An appeal is planned. "Seventy percent of farmers aren't getting any subsidies," said Rep. Ron Kind (D-Wis.), who led a battle in 2002 to shift more money in that year's farm bill from subsidies to conservation. "I don't think that's the way to encourage diversity in our food production system." Instead of paying farmers cash, he said, the government should help them with improved health care, more agricultural research and conservation programs. Congressional defenders of the farm program take strong issue, however. "The

so-called world market is not a free market by anyone's definition," said Rep. Charles W. Stenholm (D-Tex.), who played a key role in writing the 2002 farm bill. Stenholm said he would be willing to end all farm subsidies if other countries follow suit, which is unlikely.

"As long as you have Europeans subsidizing wheat exports and marketing boards in Canada, you're going to see continued market influence by governments," Stenholm said. "We have the most efficient farmers in the world, but most of them can't compete with government-imposed prices overseas." Experts agree that Congress has, in fact, made strides in breaking from the old New Deal-era farm system that strictly controlled what farmers planted, how much land they used and even what they got for crops. The 1996 farm bill was intended to wean farmers off decades of government price supports and directives, and allow them to plant crops that were bringing good prices in world markets. The bill stressed supporting farm income with the cash payments unrelated to what farmers grew, rather than having government support prices by purchasing surplus crops. The new, more flexible system brought about sweeping changes. Wheat and barley growers in the northern plains converted millions of acres to higher-value soybeans, a crop that was not covered in the more rigid farm subsidy programs of earlier years. But in the late 1990s, with farm prices crashing, Congress rushed back with billions of dollars in "emergency" payments. In 2000, the payments soared to a record $27.5 billion. The 2002 farm bill continued the direct payments, but also improved the "countercyclical" payments for which farmers were eligible when prices fell below certain targets: $2.63 a bushel for corn and $3.92 a bushel for wheat. In a further show of political muscle, farm state senators a week ago attached a $2.9 billion drought, flood and "disaster relief" provision to an unrelated spending bill. Skogen is keenly aware how this agriculture spending may look to urban dwellers, but he makes no apologies. "From the outside, you look at it and say: Why would you give anybody more money when they have a good year?" he said. "But it's really much broader than that. It's food security for the country, it's schools, it's county government and all the things we need out here to inhabit North Dakota."

The steady cash, he said, enables him to weather bad years, get credit from banks and constantly upgrade his operation in a region buffeted by the vagaries of weather and a world economy. He used the first of two annual checks this year to purchase the yield-measuring device for his combine.

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A2: Ohio Doesn’t Get many Subsidies Farmers downplay their reliance on subsidies. They underrate their importance to the Ohio economy COLUMBUS DISPATCH June 17, 2007 “Cash by the acre” By Monique Curet and Doug Haddix http://www.dispatch.com/live/content/local_news/stories/2007/06/17/Farmcash.ART_ART_06-1707_A1_0V70K8Q.html?print=yes accessed 7-20-08 [nfb] Farmers often are reluctant to discuss their subsidies. "I think that it's just like anybody else. You don't like to tell someone else what your paycheck looks like," said Rick Borland, program chief for production adjustment compliance for the Farm Service Agency in Ohio. Under the current farm bill, every person receiving subsidies must report adjusted gross income to the USDA. To qualify, income from activities other than farming can't exceed an average of $2.5 million over the previous three years, Borland said. "We need to understand that, historically, farm programs have been about production of certain commodities. It has not been about farmers," said Carl Zulauf, an agricultural economist at Ohio State University. The primary goal was food security, not farmer support. "There's all kinds of economic evidence that (subsidies) have indeed stimulated production," Zulauf said. For example, the U.S. traditionally has amassed a stock of crops such as corn. That's an indication that production is being supported by the government, because the market doesn't support large reserves. Providing steady income Farmers had some unexpected company in collecting agricultural subsidies: charities, churches and government.

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State Econ DA

A2: Dairy Turn

Ohio dairy firms are on top of the technology curve and insulate themselves from rising corn prices Marissa Mullett - Ohio State University Extension Agent for agriculture and natural resources/community development in Coshocton County – 6-28, 2008 “Dairy industry contributes millions to local economy” http://www.coshoctontribune.com/apps/pbcs.dll/article?AID=/20080628/NEWS01/806280307/1002/NEWS01 accessed 7-23-08 [nfb] On a state level, the Ohio Department of Agriculture reports that Ohio has more than 3,700 licensed dairy farms. The 273,000 cows on these farms produce about 4.75 billion pounds of milk a year. These numbers put Ohio 11th in the nation for its milk production. Dairy producers in the county and across the nation implement advances in agricultural technology and farm management practices on their farms to make them more profitable and environmentally kind. For instance, there are dairy farms in Coshocton County that breed their cows using sexed semen. This technology allows farmers to ensure that a calf will be a heifer (female) instead of male (bull). After all, heifers are the daily money-making part of a dairy operation. Another farm management practice dairy producers are using on their farms is intensive grazing. This practice is characterized by moving animals from paddock (a small pasture area) to paddock. While the cattle graze on the forages in one area the other areas re-grow. This lessens the dependency on regular corn consumption and preserves land quality and enhances soil productivity.

Arizona Debate Institute 2008 Pre-Institute Evidence

18 State Econ DA

***OHIO ECONOMY INTERNAL LINKS

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State Econ DA

2NC: Farmland Prices I/L

Subsidies are key to keep Ohio farm prices high Ben Sutherly - Staff Writer - June 08, 2008 “Coping with an uncertain economy” http://www.daytondailynews.com/n/content/oh/story/news/specialreports/2008/06/08/ddn060808econfarminsideweb.html accessed 7-18-08 [nfb] Direct payments may inflate prices for farmland, said Carl Zulauf, an OSU agricultural economist and farm bill analyst. Despite the depressed real-estate market, value of top farmland in southwest Ohio is forecast in 2008 to be $5,214 per acre, up 5 percent from $4,962 in 2007, according to Ohio State University.

Planting decisions have already been made, the plan shocks the market because farmers have no ability to react Jeffrey L. Frischkorn 7-5-2008 “Farmers wither as costs grow” http://www.zwire.com/site/news.cfm?newsid=19831206&BRD=1698&PAG=461&dept_id=21849&rfi=6 accessed 7-23-08 [nfb] Northeast Ohio farmers already had done their planning and planting before the floods began, said Les Ober, program assistant for the Ohio State University Extension in Geauga County. "But guys may decide to plant more corn next year, depending upon what they see happening. Farmers are now waiting to see what comes up out of the ground here and elsewhere," Ober said. Ramey said Ohio also has largely been spared the flooding of farmland, with just spot damage and loss. "Of course if you're a farmer with flooded land, you're hurting," Ramey said. Anecdotal information and visual observations, though, do seem to suggest that more Geauga County farmers are planting high-value corn and soybeans, Ober says. "We'll probably see that once the harvest reports come out but not until fall. It's difficult to get a good number locally right now," Ober said.

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State Econ DA

Ohio Economy I/L to Economy

The agricultural economy spills over to influence all other sectors Howard J. Siegrist - extension educator at Ohio State University Extension –7-17, 2008 Newark Advocate “Farm Science Review coming in September” online accessed 7-23-08 http://www.newarkadvocate.com/apps/pbcs.dll/article?AID=/20080717/NEWS01/807170343/1002 [nfb] When times are good in agriculture, everyone enjoys a good farm show, and organizers of Ohio State University's Farm Science Review hope the overall positive vibe of the industry will carry over to this year's event, scheduled for September. It is amazing where agriculture is today. We are at levels with crop prices we've never seen before, but operating under these circumstances can be potentially overwhelming. Unfortunately, we also are operating under a cost structure that we never have seen before. We hope what is being offered at Farm Science Review this year, from a research, education and exhibitor standpoint, will help farmers effectively deal with those challenges they are facing. "New Days, New Discoveries" is the theme of this year's event from Sept. 16-18 at the Molly Caren Agricultural Center in London, Ohio. Farm Science Review is sponsored by the College of Food, Agricultural, and Environmental Sciences, Ohio State University Extension, and the Ohio Agricultural Research and Development Center. It attracts more than 140,000 visitors from across the country and Canada, who come for three days to peruse 4,000 product lines from 600 commercial exhibitors and learn the latest in agricultural research, conservation, family and nutrition, and gardening and landscape. Farm Science Review is still a few months away, yet exhibitor space at the show is almost sold out. The general sense we get from exhibitors is that a positive atmosphere exists in the industry, and they really are wanting to capitalize on that.

Ohio key to global economy Edward W. (Ned) Hill - Professor and Distinguished Scholar of Economic Development at the Maxine Goodman Levin College of Urban Affairs of Cleveland State University and Nonresident Senior Fellow of the Metropolitan Policy Program at The Brookings Institution - October 30,2007 “Northeast Ohio’s Economic Development Challenge” http://cc.ysu.edu/neolead/NEO%20V%20Speaker%20Hill.ppt accessed 7-23-08 [nfb] Ohio is America’s economic battleground How big is the regional economy? Think of NEO as the 15th largest metro economy in the US. Or, if we were a nation, the 37nd largest national economy If Northeast Ohio were recognized as an economic region we would rank behind: * Seattle-Tacoma $158.0 billion; Phoenix-Mesa $153.2 billion; Minneapolis-St Paul- Bloomington $151.9 billion Ahead of: * San Diego-Carlsbad-San Marco $143.4 billion; Riverside-San Bernardino $133.0B * United Arab Emirates $130.8 billion, Malaysia 130.8B, and Israel $129.8B * Ohio with a GDP of $441.6 billion would be 19th largest economy between Netherlands and Belgium

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State Econ DA

Ethanol I/L to Bank Bailouts

Cutting ethanol subsidies pops the farmland prices bubble, forcing a bailout of ag banks Jim McTague - Barrons Financial Weekly, Washington Editor -December 31, 2007 “Don't Bet the Farm” http://online.barrons.com/article_print/SB119882116265055389.html?mod=b_hps_9_0001_b_this_weeks_magazi ne_home_top accessed 7-23-08 [nfb] Prices of farmland have been soaring for three years, and the market has all the markings of a bubble. Barron's Washington Editor Jim McTague tells why you shouldn't bet the farm on the gains continuing. (Dec. 28) But the case for farmland isn't airtight. In fact, some smart money that invested in Iowa farmland in 2000 is bailing out, happy to have made a profit. According to Duffy, 56% of Iowa farmland was owned by farmers from 2000 to 2005. The other 44% was owned by investors. The split today is 60% farmers and 40% investors. Steve Leuthold no longer owns farmland he picked up for a song in the last bust. Leuthold, chief investment officer of Leuthold-Weeden Investment Capital in Minneapolis, sees ominous parallels between today's boom and those of the 1970s and 1980s, which saw farm prices soar. In Barron's Aug. 9, 1982, issue, he wrote a cover story entitled "Grim Reapers," which called the farmland market's top. His prediction of a 50% correction was overly optimistic; he ended up buying two Iowa farms at $600 an acre, 75% below their peak prices. THAT BOOM WAS TRIGGERED in 1972 when President Nixon signed a wheat deal with the former Soviet Union and also improved relations with China. The subsequent rise in U.S. farm exports lasted until the Soviets invaded Afghanistan in 1979 and President Carter canceled the wheat deal in protest. This couldn't have occurred at a worse time, coming as it did in an era of fuel shortages and gas lines, inflation and soaring interest rates. Nonetheless, farm prices continued to rise, aided by easy financing. Few saw disaster arriving...until it arrived. This time around, Leuthold sees a more moderate pullback -- 15% to 20% in three to five years -- because buyers are employing less leverage and interest rates are lower. His main concern is that the ethanol boom rests on shaky economic underpinnings. Without government subsidies, ethanol makes no sense, he maintains. And the subsidies could disappear because of a backlash against costs of producing the fuel -- higher supermarket prices and huge demand on water supplies. The measure was opposed by groups representing the world's undernourished and by competing agricultural interests like the National Cattlemen's Beef Association. Big Oil dislikes the program, too, and Big Oil has deep pockets to lobby Congress. [quotes Steve Leuthold, chief investment officer of Leuthold-Weeden Investment Capital in Minneapolis]

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State Econ DA

Bank Bailouts I/L to Economy

Farmland prices are dangerously high – bank failure would cause panic and economic collapse FDIC – Federal Deposit Insurance Corporation - 6/5/2K “Banking and the Agricultural Problems of the 1980s” http://www.fdic.gov/bank/historical/history/259_290.pdf accessed 7-20-08 [nfb] Agricultural markets severely deteriorated in the 1980s, with attendant effects on agricultural banks. The roots of the deterioration lay in the events of the previous decade. In the early 1970s the demand for farm commodities significantly increased; the increased de- mand caused farm prices to grow at a much faster rate than expenses; and farm income therefore began rising rapidly. By 1973, real farm income had reached a record high of $92.1 billion, nearly double the $48.4 billion of three years earlier. The combination of rising farm income and high inflation caused the value of farmland to escalate, while at the same time a ready availability of credit caused farm debt to rise sharply. In the late 1970s, however, the boom period came to an end: interest rates soared after the Federal Reserve Board tightened monetary policy to fight inflation, and changing conditions in worldwide supply and demand caused export demand for farm commodities to decrease sharply. Real farm income fell to $22.8 billion in 1980 and to $8.2 billion in 1983; and in 1981 prices for farmland began a dramatic contraction. The financial performance of banks with a large proportion of farm loans generally coincides with the performance of the farm economy. Loan demand usually increases as farm income grows; and the volume of nonperforming loans and loan losses expands when the farm sector is in a downturn. The correlation between the farm economy and banks in the agricultural sector continued to hold true during the 1980s. Events in the farm economy were reflected in farm bank failures in 1981 and 1985: in 1981 only 1 agricultural bank was among the nation’s 10 bank failures, but in 1985, 62 agricultural banks failed, accounting for over half of the nation’s bank failures that year. In this chapter we examine, first, the farm economy of the 1970s and 1980s: the his- tory and causes of the agricultural boom-and-bust cycle of those two decades, and the de- gree to which forecasts accurately predicted the problems that arose. Next we survey the various nonbank sources of farm credit, and then we examine the effect the downturn in the farm economy had on the banking system— more particularly, on institutions with sizable holdings of farm loans. Finally, we analyze financial data for agricultural banks and com- pare them with data for small non-agricultural banks. The Agricultural Cycle in the 1970s and 1980s Agriculture is by nature a cyclical industry. The cycle in its most simplistic form traces the following course: when crops are plentiful, prices drop, so plantings are reduced the next year. The attendant reduction in supply then generally causes prices to rise. The higher prices lead to increased plantings and excessive production; prices decline; and the cycle repeats itself. Obviously, external forces may affect this pattern. For example, studies conducted by Louis M. Thompson, emeritus associate dean of agriculture at Iowa State University, suggest that there is a global weather pattern which, in his opinion, drives the economic cycle in agriculture. Or some event may alter the economic outlook, providing new opportunities for profits. When that happens, the opportunities may be seized and sometimes are overdone to such an extent that the usual agricultural cycle is transformed into a cycle of speculative excess followed by a reaction of crisis and panic. (Such specula- tive cycles have been common historical occurrences.) In the speculative, or manic, phase, characteristically individuals with wealth or credit employ available funds to purchase fi- nancial assets. The unsustainable prices may persist for years, but eventually they reverse themselves. Few of the participants in such speculative bubbles are able to anticipate re- versals perfectly and therefore cannot avoid substantial losses when the bubble bursts

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State Econ DA

A2: Ohio Not Key Midwestern ag banks are vulnerable – high debt and farm prices make them fragile FDIC – Federal Deposit Insurance Corporation - 6/5/2K “Banking and the Agricultural Problems of the 1980s” http://www.fdic.gov/bank/historical/history/259_290.pdf accessed 7-20-08 [nfb] However, there may be another reason for the midwestern location of agricul- tural banking problems. The types of crops produced in these states, such as wheat, corn, and soybeans, were greatly influenced by the export boom of the 1970s. Consequently, the Midwest experienced unusually large increases in farm real estate prices during this period. For example, from 1974 through 1978, when the price of an acre of farmland nationally rose at an average annual rate of 15 percent, in Iowa and Illinois the increase was approxi- mately 22 percent annually. In the 1980s, declines in midwestern farmland prices were similarly dramatic. For example, after peaking in 1981, farmland prices had fallen by 49 percent in Iowa, 46 percent in Nebraska, 42 percent in Illinois, 39 percent in Minnesota, and 38 percent in Missouri. The financial difficulties caused by these declines, coupled with the substantial debt midwestern farmers had incurred for purchases of farmland and ma- chinery to support crop expansion during the export boom, made farmers in the region much more vulnerable than farmers in other parts of the country to the declines in exports of wheat, corn, and soybeans, as well as to the higher interest rates of the 1980s. In summary, agriculture flourished in the 1970s: in the first half of the decade crop prices soared, farm exports escalated, and real farm incomes reached all-time highs. This prosperous environment, combined with high levels of inflation, led farm real estate values to skyrocket. The bubble burst in the early 1980s, after monetary policy was tightened to fight inflation and, at the same time, foreign demand for domestic agricultural products plummeted. In 1981, farmland prices began a devastating spiral. Farm debt, which had sup- ported the agricultural expansion and farmland speculation by almost quadrupling from 1970 through 1983, became a painful burden to farmers. However, by 1988, total liabilities had declined 30 percent.

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State Econ DA

***IOWA ECON 1NC

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State Econ DA

Iowa Econ Shell (1/3) A. Iowa’s economy is strong now Iowa Politics.com, 07-15-08 ( “Rep. Olson: Iowa Ends Year With Strong Economy” For More Information: Rep. Tyler Olson, www.iowapolitics.com/index.iml?Article=131081) The state of Iowa ended the 2008 fiscal year on June 30 and preliminary reports from a non-partisan state agency show Iowa's economy is strong with revenues exceeding expectations by about $40 million. "Despite national trends, Iowa's strong economy is proof that our commitment to a balanced state budget and focus on job creation is working," said State Representative Tyler Olson of Cedar Rapids. "The state's fiscal house is in order with $620 million in our reserve accounts and we are working with local communities and businesses to create good-paying jobs for Iowans." According to the non-partisan Legislative Services Agency, Fiscal Year 2008 ended with 9.4% revenue growth. This rate of collections compares with the Revenue Estimating Conference (REC) estimate of 8.8%. The REC estimated that fiscal year 2008 general fund receipts would grow by $540.2 million, from $6.138 billion to $6.678 billion. The 9.4% growth rate helped to push the growth in receipts to $580.1 million, $39.9 million more than estimated.

B. Iowa’s economy is dependent on subsidies – cutting them down would have a ripple effect throughout the ag community Northwestern Financial Review, 03-15-02 (Dullum, Justin “Farm bill: Heading into home stretch,” http://www.allbusiness.com/finance-insurance/1124853-1.html) In spite of powerful lobby opposition, a majority of the Senate supports the bill. There is also lobbying support for the amendment. For instance, the Iowa Farm Bureau has officially dissented from the national group's opposition to payment limitations. Iowa sees 75 percent of its farms

receive subsidies, the vast majority of which fall under the proposed payment cap. According to the latest data, less than 50 of 151,984 subsidy recipients in Iowa received more than $275,000 in 2000. Kansas which, like Iowa, does not have many farms that would be affected by payment limitations, is not overly concerned with the amendment, said Jim Maag, president of the Kansas Bankers Association. Yet the state is caught in the middle. "Our legislators aren't exactly crazy about the entire bill but the payment cap is not our biggest concern," said Maag. "The income provision is more of a big deal. That could be a problem. We've got some huge dairy operations in parts of this state that can get up to the $2.5 million cap pretty quick." Maag said opposition to particular provisions of the bill, however important, pale to the overall

necessity of a bill-period. "There's no doubt we have a lot of rural banks in the state that have marginal farm customers. They're depending on those federal payments. If they aren't there, it will have a ripple effect, not only on the banks, but on the entire ag community. We haven't had good weather. For the last three years, the federal subsidies have been the salvation." The other issue threatening to stall the bill is a facet of the Senate version that limits meat processors' ownership of cattle and hogs. "This is a big issue in the Midwest," said Blanchfield. "The idea is that if packers own the livestock, they can easily manipulate the market and drive prices down. In existing laws, the ownership aspect of this is clear but when, in fact, is a packer a controller? There has been a lot of debate about that in the Senate. They've established in dialog what they think it means, but have yet to get something formally done." The amendment was sponsored by Sen. Tim Johnson (D-S.D.).Debate on this issue has been focused on Iowa, Minnesota and South Dakota,

where farm subsidies are a critical part of the rural economy. These states also are expected to host three of the year's most contentious Senate races. In these three states, there is broad support for restrictions on meatpackers and a limit on payments to big farms.

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Iowa Econ Shell (2/3) C. The agriculture industry is the backbone to the US economy – a depression in the ag community would impact the whole country Business Wire, March 16, 2006 (“Agriculture Leaders Celebrate National Agriculture Day; Washington, DC, Events Honor the Essential Role that Agriculture Plays in America's Economy” Business Wire, http://findarticles.com/p/articles/mi_m0EIN/is_2006_March_16/ai_n26797789)

National Agriculture Week's kick-off begins today with the celebration of National Agriculture Day in Washington, DC. A series of events designed to celebrate American agriculture and honor the people who work to meet our everyday needs will take place throughout the day. Leading corporations, such as Archer-Daniels Midland (NYSE:ADM) and John Deere, as well as elected officials, government agencies and industry organizations will gather in our nation's capital to educate Americans about the essential role of agriculture in maintaining a strong economy. To kick-off National Agriculture Day, U.S. Representative Bob Goodlatte (R-VA), Chairman of the House Agriculture Committee, spoke at an FFA rally held in front of the Capitol building. Other events taking place today included a luncheon at the National Press Club, with keynote speaker U.S. Senator Saxby Chambliss (RGA), Chairman of the Senate Agriculture Committee. Orion Samuelson, one of the nation's most distinguished farm broadcasters, and John Block, executive vice president and president, wholesale division of the Food Marketing Institute, will serve as masters of ceremonies today. "ADM is proud to support the Agriculture Council of America and its celebration of American farming through National Agriculture Day and National Agriculture Week," stated Brian Peterson, ADM Senior Vice President-Corporate Affairs. "These events both recognize and celebrate agriculture, which

contributes more than one-tenth of the U.S. economy." "John Deere has been committed to the American farmer since 1837," said Doug DeVries, senior vice-president, agricultural marketing at John Deere. "Supporting the Agriculture Council of America and the Ag Day effort is a very effective way to help the public learn more about the important role the American farmer plays in their lives today." National Ag

Day highlights the abundance provided by agriculture, the backbone of the nation's economy. More than 22 million people work in the agriculture industry, and raising the American public's awareness of the importance U.S. agriculture plays in the stability of the economy and in feeding the world is the goal of National Agriculture Day and National Agriculture Week, March 19-25.

D. US key to world economy Bisseker, 2007 (Claire Bisseker, staff writer for the Financial Mail, May 18, 2007, GLOBAL ECONOMY. When the US sneezes ..., Financial Mail, p.ln ) Investors are watchful, aware that growth slowdowns are often precursors to turning points in economic activity. The big question is whether the US weakness is a temporary slowdown - a midcycle pause as occurred in 1986 and 1995 - or the early stage of a recession. The IMF's latest World Economic Outlook seeks to answer this question and to probe whether the rest of the world can decouple from a US slowdown or whether the tighter integration of the global economy has increased the scope for spillover effects. US recessions have in the past usually coincided with significant reductions in global growth, hence the expression: "If the US sneezes, the rest of the world catches a cold."

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State Econ DA

Iowa Econ Shell (3/3) E. Global economic decline will bring Armageddon. Bearden, Lt. Col, 2000. [Tom, PhD Nuclear Engineering, The Tom Bearden Website, April 25, 2000, o/l: http://www.cheniere.org/correspondence/042500%20-%20modified.htm, Accessed 5/11/07.] Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that some of the weapons of mass destruction will be used by one or more nations on others. An interesting result then —as all the old strategic studies used to show—is that everyone will fire everything as fast as possible against their perceived enemies. The reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of the long range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic collapse, poverty, death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major nations also, and literally a hell on earth will result. In short, we will get the great Armageddon we have been fearing since the advent of the nuclear genie. Right now, my personal estimate is that we have about a 99% chance of that scenario or some modified version of it, resulting.

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

*** IOWA EXTENSIONS

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State Econ DA

UQ: Iowa Econ Strong Flooding in Iowa wont hurt the economy long term – it will spur new activity with rebuilding Des Moines Register, 07-04-08 (“Iowa economy may get worse” Des Moines Register by Donnelle Eller http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080704/BUSINESS/807040362/1029)

"There are growing signs of weakness," said Amy Harris, an analyst for the Iowa Department of Revenue. She expected flooding to drag down future indexes, before rebounding with the influx of disaster aid and insurance payments. "Flooding will have a big economic cost, but it also will spur a lot of economic activity in the state," Harris said. Some industries, from homebuilders to appliance retailers, will see an immediate boost from the flooding. But Goss expected the state's economy to worsen before it improves as businesses struggle to reopen. Iowa's economy was already beginning to wear under higher energy prices, he said. Higher diesel and natural gas costs pushed higher business operating and transportation costs. Still, Iowa's economy has performed better than the nation and other Midwestern states, he said. "We have seen stronger times, but there was very little indication of recession in Iowa," Goss said.

Iowa’s economy is not going to go into recession any time soon - projections for 2009 look promising UI-University News Service, 07-08-08 (UI forecaster predicts rising income growth, the Press-Citizen, http://www.press-citizen.com/apps/pbcs.dll/article?AID=/20080708/NEWS01/80708004/1079) State revenues and incomes should continue to rise through 2009 and hold off an economic recession in Iowa, according to University of Iowa economic forecaster John Geweke. In his quarterly report delivered to the state's Revenue Estimating Committee on Monday, Geweke said he expects personal income to grow by 5.1 percent in 2008 and 4.9 percent in 2009. Those numbers are both revised upward from his April forecast of 4.7 percent in 2008 and 4.5 percent for 2009. Employment growth is expected to increase by .4 percent in 2008, up from the April forecast of .1 percent, and increase by .1 percent in 2009, down from the .2 percent forecast in April. "Income growth continued

to strengthen through 2007 and the first two quarters of 2008, and the main driver of that is commodities prices that continue to go up," said Geweke, director of the Institute for Economic Research in the Tippie College of Business. He said slow employment growth is one potential weakness in the state's economy, but it isn't slow enough to make him uncomfortable. "Looking at these numbers, I see no threat of an impending recession in Iowa," he said. Income projections are based on state figures from the first quarter of 2008. Revenue figures are based on data through the second quarter of 2008. While the projections do not fully account for damage sustained in the floods, tornados and storms that hit the state this spring, he doesn't expect those catastrophes will significantly slow the Iowa economy. Economic activity related to clean-up and rebuilding typically offset whatever economic loss was caused by the natural disasters, he said. Geweke is a professor of economics in the Tippie College of Business and Harlan E. McGregor Chair in Economic Theory in the Department of Statistics and Actuarial Science in the College of Liberal Arts and Sciences. The Institute for Economic Research serves Iowans as an advisory group to the Governor's Council of Economic Advisors. The council's discussions are, in turn, used by the state's Revenue Estimating Conference in determining the official prediction of the rate of growth of tax revenues for the coming two fiscal years. The Board of Regents created the institute in 1975 to facilitate cohesive and continuing economic research, and to establish a formal mechanism for providing interaction with, and economic research services to, government and industry. Each quarter the institute produces the Iowa Economic Forecast, which contains quantitative forecasts of economic conditions and tax revenues for the State of Iowa using the latest advances in econometrics.

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State Econ DA

Lnx: Iowa Iowa’s economy is dependent on farm subsidies Des Moines Register, 02-10-02 (Farm subsidy cap would hurt few;Only 45 Iowa operations were above limit in '00 Des Moines Register February 10, 2002 Sunday)

Currently, individual farms are limited to $460,000 in annual crop payments, although subsidies are essentially uncapped under programs that guarantee minimum revenue for certain commodities. The Des Moines Register used U.S. Department of Agriculture data provided by the Environmental Working Group to look at Iowa's top-100 farm payment recipients from 1996 through 2000. Among that group, just 45 operations received more than the proposed cap during 2000. Even that number is likely too high because brothers, or fathers and sons, jointly operate many of those farms. Those operators could each receive up to $275,000 in payments if they meet certain requirements. Cook said the Register's estimate is not perfect, but probably is close. "There are a number of provisions in the amendment that don't track with our database," he said. "But it's a fairly small number of recipients affected." The Senate measure also tightens rules on absentee landlords who could receive subsidy payments, as well as for those whose average income exceeds $2.5 million a year. That could affect people such as Des Moines businessman Bill Knapp, who received $408,000 in farm subsidies from 1996 through 2000 for his various land holdings in Iowa.

Farm subsidy payments are important to Iowa's economy. The state's farmers and landowners received $6.75 billion in subsidy payments from 1996 through 2000, or enough to provide every man, woman and child in the state with a lump-sum payment of $2,300. No other state -even sprawling ones with large farms such as Illinois, Texas and California -received more money during those years.

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State Econ DA

Lnx: Corn Ethanol Key 2 Iowa Ethanol subsides are necessary to keep the Iowa economy strong The Economist, 2007 (“The craze for maize; Iowa's ethanol economy” May 12, 2007, lexisnexis) YOU might think that the opening of a new ethanol facility in Nevada, Iowa—a town of 6,700 in the centre of the state—would be of interest mainly to the local farmers who supply the corn that the factory turns to car fuel. You would be wrong. Investors in the refinery include the person who delivers fuel to it, a couple of local parts-suppliers for John Deere (a big farm-equipment company) and the local school-bus driver, among 900 or so other small investors. Like many others in the corn belt, the Nevada refinery is seen as a way for

the whole rural community to thrive by exploiting America's new craving for ethanol and the corn (maize) that is being used to make it. Corn-based ethanol is neither cheap nor especially green: it requires a lot of energy to produce. Production has been boosted by economically-questionable help from state and federal governments, including subsidies, the promotion of mixing petrol with renewable fuels and a high tariff that keeps out foreign ethanol. The federal government offers ethanol producers a subsidy of 51 cents per gallon (13.5 cents per litre); and a growing number of states are pushing for wider use of E85, a fuel blend that is 85% ethanol and only 15% petrol. Since oil prices rose above $30 a barrel in 2004 (they are more than double that now), ethanol capacity has grown especially rapidly. And although the country is experimenting with other renewable plant-based fuels of varying feasibility, from biodiesel to (much greener) ethanol derived from trees, the biggest boom has been in corn-based ethanol. California has helped to lead the way. When the state banned the use of methyl tertiary butyl ether (MTBE) as a fuel additive after 2003, everyone had to use ethanol instead to meet clean-air standards; and local refineries for the product began popping up to cash in on a state subsidy of 40 cents per gallon at the time. Outside the Golden State, however, the states most eager to subsidise ethanol were those with golden fields of corn. Wallace Tyner, an agricultural economist at Purdue University, points out that states that had introduced subsidies early, such as Illinois, Iowa, Minnesota and Nebraska, were already building lots of ethanol factories before 2004, whereas corn-belt states without subsidies, such as Indiana and Ohio, did not do much until oil prices rose. Since then, rural areas across the region have been swept up in the ethanol craze, with

new facilities sprouting all over corn country (see map on the next page). Iowa, in the heart of the region, already has 28 ethanol refineries, producing 1.9 billion gallons of the stuff a year, nearly a third of America's total capacity. Many new facilities and expansions of existing ones are in the works. On consecutive days in Iowa last week there were ceremonies to break ground for a new factory in Hartley and to open a completed one in Corning—where bad weather had grounded the Vanguard Squadron, the world's only 100% ethanolpowered aerobatics fleet. Although agribusinesses such as Archer Daniels Midland have built many ethanol refineries, farmers' co-operatives and local investors have also been busily building as well. The first local groups to do so were in remoter areas where farmers could not get the best prices for their corn because of the high cost of transporting it to market. In Iowa, that region is the north-western part of the state, which enjoys high crop yields but gets 25-50 cents less per bushel because it is too far from the Mississippi river barges. The same logic applied in the eastern counties of North and South Dakota, in south-west Minnesota and in other parts of the corn belt where getting corn to market is costly. So long as a refinery can be built near good rail terminals in these areas, says Ken Eriksen, who analyses transport patterns at Informa Economics, a research firm specialising in agriculture, it is more cost-effective to convert the corn into ethanol and send that to distant markets. All this activity is benefiting rural

economies and related industries big and small. Land prices in Iowa rose 10% last year, and are still climbing. Jobs are being created around the factories. In places such as Lakota and Marcus, which built some of the state's first modern refineries and have made a bundle because of high oil prices and subsidies, local investors have ploughed their profits into home improvements, college fees and farm equipment.

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Lnx: Corn Ethanol Key 2 Iowa Prosperity in Iowa is based on corn-ethanol subsidies Morgan, 09-28-07 (Dan Morgan [a former Post reporter who specialized in agriculture, is a contract writer of the newspaper and a fellow with the German Marshall Fund, a nonpartisan public policy institution] “Corn Farms Prosper, but Subsidies Still Flow” Washington Post, September 28, 2007, lexisnexis)

"That's the secret of this ethanol industry," Couser said. "It's keeping the dollars at home." In July, Pine Lake Corn Processors, the second Hardin County plant after Hawkeye's, announced profits for the previous eight months of $3,800 a share, more than the $3,250 cost of the initial investment. "It's worked out better than my wildest dreams," said Pine Lake President Larry Meints, a corn grower who pushed for the new plant after becoming fed up with hauling grain to distant elevators. The new market means corn-rich Hardin County has to import the crop even though it grows 35 million bushels a year. The county can't supply its two ethanol refineries and its thriving pork, beef and poultry industries. "Things are good here," said Howard B. Wenger, president of Iowa Falls State Bank, who reviews the balance sheets of hundreds of farmers. He estimates that most farmers earned between $100 and $400 an acre on their 2006 crop after expenses, depending on whether they owned or rented their land. That translates into profits of $100,000 to $400,000 on a 1,000-acre farm. The USDA predicts that net farm income will be $87.1 billion this year, up nearly 50 percent over 2006. Iowa farmland values are up 18 percent in the past 12 months, according to

Federal Reserve Board surveys, making millionaires on paper out of any farmers owning 200 acres free and clear. The rural prosperity is due in large measure to billions of dollars in federal subsidies and incentives for corn-based energy. These include a 51-cent tax credit that gasoline manufacturers get on every gallon of ethanol they mix with their blends, and more than $500 million in federal cash to ethanol refiners between 2001 and 2006.

Corn-ethanol is the most heavily subsidized crop – its crucial to Iowa Lowry, 08-11-07 (Rich Lowry [writer] “Iowa's Stake in Ethanol Distorts Our Politics” Real Clear Politics, http://www.realclearpolitics.com/articles/2007/08/iowas_stake_in_ethanol_distort.html ) Ethanol is to Iowans what marijuana is to Rastafarians: a substance that is considered quasi-holy, but only because it delivers really good times. Presidential candidates become fanatical supporters of the corn-based fuel as soon as they begin to compete in the Iowa caucuses. Before it's over, Mitt Romney might have to promise to use ethanol as pomade and Mike Huckabee -- in a naked play for the religious right -- to baptize people in the stuff. We will produce 6 billion gallons of corn ethanol this year, on the way to meeting a mandate of 7.5 billion gallons by 2012. The Senate has passed a mandate for 36 billion gallons of ethanol by 2022, although the additional fuel is supposed to come from sources other than corn -- so-called cellulosic ethanol, made from switchback grass and the like. When the agricultural firm Archer Daniels Midland first coaxed ($$$) Congress into subsidizing ethanol a few decades ago, it was just a perversely amusing example of rank corporate welfare. Now, with ethanol distorting markets in America and around the world, it's not so amusing anymore. Prior to the Civil War, southerners

genuflected before King Cotton. Now, we live in an era of King Corn. It is our most heavily subsidized crop. We will plant 90 million acres of it this year, up 15 percent from last year. Still, the price of a bushel of corn jumped from $2 to $3 in the past year, thanks to the demand for more ethanol. This is increasing the price of corn-based foods -- tortillas have become as much as twice as expensive in Mexico -- and meat, poultry and dairy products, since livestock traditionally has been fed corn.

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State Econ DA

Lnx: Corn Ethanol Key 2 Iowa Corn-ethanol is key to the Iowa economy The Globe and Mail (Canada) 07-23-07 ( BARRIE McKENNA “Corn again: Iowa finds salvation” Lexinexis)

Here in Iowa, and across a growing swath of the U.S. Midwest, making ethanol has meant a second chance for a rural economy that lives and breathes corn. "This town was dying a slow death," said Craig Brownlee, a third-generation corn farmer from Emmitsburg, located 260 kilometres northwest of Des Moines. "We weren't making any money and we were living off crop subsidies. Now, people are spending money like they haven't in a long time. There's a buzz around town."

A vast new industry is rising out of corn fields. The ethanol refinery here, owned by Poet LLC of Sioux Falls, S.D., is one of 27 ethanol plants operating in Iowa. Another 19 are under construction or undergoing major expansions. Add to that a dozen biodiesel plants, which convert soybeans into truck fuel, and it's little wonder many farmers proudly sport "I grow oil" bumper stickers on their trucks. Iowa has become the Texas of the ethanol industry - the heart of an industry that is now feeding the

country's cars, not just its people and livestock. This year, more than a quarter of the Iowa corn crop will go to feed ethanol plants, up 20 per cent from last year. The state already accounts for roughly a third of the six billion gallons produced nationwide, and has visions of grabbing an even larger bite. In all of Canada, there are just eight ethanol plants, producing about 185 million gallons (700 million litres). Poet alone produces more than a billion gallons, second only to Archer-Daniels-Midland Co. If all the Iowa plants now

on the books get up and running, the largest corn-growing state in the U.S. could one day become a net crop importer to sustain all of them. And if Iowa is the new Texas, Emmitsburg (pop. 3,867) might just be its Spindletop - the 1901 gusher well that launched the modern-day oil industry. It wasn't that long ago that ethanol - a 200-proof alcohol gasoline substitute - was a bit of a curiosity in the farm belt. Farmers saw it as a way to get a few more cents a bushel for some of their crop. The scheme has worked beyond anyone's wildest dreams. Thanks to hefty government subsidies at the pump, new renewable fuel mandates and strict import restrictions, ethanol production is gushing. There are so many plants in northwestern Iowa that most farmers are now within 50 kilometres of at least one refinery. Many Emmitsburg farmers sell nearly everything they harvest to the refinery. More than 100 residents, including farmers such as Mr. Brownlee, have also earned small fortunes as minority investors in the plant. For decades, the price of corn fluctuated between $2 (U.S.) and $2.50 a bushel. But thanks in large part to new demand from ethanol plants like this one, the price of corn has nearly doubled in the past year alone. And most experts say it will stay high for some time. In Iowa, farmers were getting an average of $3.56 a bushel in June, up from less than $2 a year ago. Across the United States, the corn price surge has put an extra $9-billion into farmers' pockets. The Poet plant's towering silver corn storage silos, conveyor belts and fermenting tanks rise prominently out of the lush yellow and green corn fields that spread out as far as the eye can see. On a rail siding beside the plant, dozens of tanker cars wait to haul ethanol to gas refineries as far away as the East and West coasts. A steady stream of hopper trucks drive their load of yellow gold into a double-ended unloading building, dumping their cargo onto conveyor belts beneath the floor. Poet has big plans for Emmitsburg. The company is poised to spend $200-million to more than double the plant's capacity to 125 million gallons, putting it among the largest ethanol refineries in the United States. And Poet thinks it has an answer to where it will get all that corn. A quarter of the expanded plant's output will come from a newly developed cellulose process that will turn corn husks, as well as the kernels, into automotive fuel. The process will allow the company to produce 27 per cent more ethanol from an acre of corn, and consume less water. The expansion, dubbed the Liberty Project, earned an $80-million government grant aimed at promoting renewable fuels and weaning the United States off foreign oil. The plant's impact goes far beyond the 40 jobs the plant has already created. Poet estimates its Emmitsburg plant pumps $60-million into the local economy every year - in corn purchases, wages and various goods and services it buys. "That money turns over several times," plant manager Daron Wilson said. "It's not just the corn we buy." Like much of rural Iowa, the town had been shrinking, as generations of young people moved away and older farmers retired. That trend has now stalled. Ben Gustafson, the ethanol plant's 28year-old technology manager, never imagined there would be work for him in Iowa after earning a chemical engineering degree in the late 1990s. "When I went to college, it was before the ethanol boom, and I just figured I'd wind up leaving Iowa to work," said Mr. Gustafson, who moved here with his family from another small Iowa town. "To be back in my home state is pretty great." The economic ripple effects can be seen

here, and across Iowa. Emmitsburg still looks like small towns anywhere in the United States. The downtown is dominated by several empty store fronts. But on the fringes, new businesses are opening up. Chain stores, a couple of motels, the area's first McDonald's and a large casino resort have opened in the past two years.

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State Econ DA

Lnx: CAFOs Key to Iowa CAFO’s are key to Iowa’s econmy Payne, 01-23-07(“Extension Advances Economic Development for Iowa’s Animal Agriculture Industry” Iowa State University Extension Extension Advances Economic Development for Iowa’s Animal Agriculture Industry Jack Payne’s Speech to the Iowa Feed and Nutrition Seminar)

Animal agriculture plays a key role in driving Iowa’s economy, particularly to benefit the state’s small towns and rural communities. To quote Wendy Wintersteen, dean of ISU’s College of Agriculture: “Development through animal agriculture is a logical and exciting avenue to grow Iowa’s rural economies. Our animal agriculture industry is favorably located geographically, in an area of competitive advantage for feed ingredients, and has cropping systems that are compatible for manure utilization.” For this reason, ISU’s College of Agriculture recently developed “A Vision for Iowa Animal Agriculture.” The college released the 20+page report in November, and it takes a hard look at our current situation, opportunities, challenges, and rewards for Iowa’s beef, dairy, equine, pork, poultry, sheep, and goat industries. The ISU Department of Animal Science conducted this year long visioning process with 40 industry representatives to evaluate the current status of Iowa’s animal agriculture and the opportunity for growth. We are at a time when Iowa agriculture is undergoing a vast structural change due to the biofuels opportunity. Bringing these top people to the table could not have been more timely. The objective was to align what all these folks know about the Iowa livestock sector and the economy with the new realities and possibilities. They identified some central themes and issues that exist across all livestock species grown in Iowa. Let me share the key messages from this vision. There are nine:

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State Econ DA

Internal Lnx: Iowa dependent on Ag Iowa’s economy is dependent on agriculture Iowa Corn Promotion Board & Iowa Corn Growers Association, 2008 (Iowa Corn, “Defending Agriculture in Iowa” Homepage accessed 07/22/08 http://www.iowacorn.org/farmers/farmers_12.html) Agriculture is critical to Iowa’s economy. In fact, a 2003 Iowa State University report concluded that Iowa’s economy is 3.7 times more dependent on farm and food and related production as a component of its economy than the rest of the nation. Unfortunately, it is all too common for outside organizations to attack Iowa agriculture. The Iowa Corn Promotion Board’s (ICPB) grower leaders understand that profitability starts with a working environment where growers can make practical decisions about how they operate. That’s why ICPB has launched an educational campaign to remind all Iowans that the state’s economic health depends on agriculture.

Agriculture is vital to Iowa’s economy. Iowa State Daily, 1/28/03 (Ruth Neil [Daily Correspondent] “Iowa's fiscal reliance on agriculture is changing, Industries profit from interdependence” http://media.www.iowastatedaily.com/media/storage/paper818/news/2003/01/28/Agriculture/Iowas.Fiscal.Reliance.On. Agriculture.Is.Changing-1093746.shtml)

Agriculture remains vital to Iowa's economy although its influence has lessened during the years, according to a new report that pulls together statistics about the economic role of agriculture in Iowa. The most striking statistic takes into account the interdependence between agriculture and other industries, according to the report. When combined, production agriculture, food manufacturing and

other agriculture-affiliated industries account for 24.3 percent of Iowa's total industrial output. The report was prepared by David Swenson and Liesl Eathington, both assistant scientists in agricultural economics, at the request of the College of Agriculture. Swenson said this means nearly a quarter of all the sale transactions that occurred in the state of Iowa happened because of agriculture. Eathington said the percentage of total industrial output tracing back to agriculture was bigger than she anticipated. "[The report shows the] importance of the links between different sectors of Iowa's economy,"

she said. "[Many industries] might not be here had it not been for our agricultural heritage." Because researchers use a variety of methods to measure Iowa's agricultural sector, the 20-page report presents a wide range of statistics. "There's just a lot of numbers that get thrown around about the size of agriculture in Iowa," Eathington said. She said the new report organizes existing data and presents a consistent set of numbers by measuring things such as agriculture's contribution to the gross state product (GSP), the number of jobs in agriculture, the amount and kind of earnings generated in agriculture and the composition of agricultural sales. For example, Iowa's GSP was $89.6 billion in 2000, according to the report. Together, farms, food and kindred product manufacturing and agricultural services contributed $7.24

billion, or 8.7 percent, of the GSP. Food and kindred product manufacturing, which includes meat packing, dairy processing and cereal production, contributed 4.6 percent, while farms contributed 3.5 percent and agricultural services chipped in 0.7 percent. Only in South Dakota, which had a GSP of 9.8 percent, did these industries supply a greater percentage of the GSP. These results mean the Iowa economy is 3.7

times more dependent on agriculture as a component of its economy than the rest of the nation, according to the report. The report also shows that the value of farm receipts fluctuated between 1971 and 2000. Farm receipts include money received from the sale of livestock and crops, as well as government payments and miscellaneous farm income, according to the report. In 1971, the real value of farm receipts in 2000 dollars was more than $16 billion, according to the report. Total farm receipts rose to $25 billion in 1973 and lingered near $20 billion through the early 1980s. Iowa's total farm receipts in 2000 were just under $15 billion, signaling a lessened dependence on agriculture. Swenson said while agriculture has seen a decline in importance, agriculture and related industries will continue to play a prominent role in Iowa's economy. This data helps to "validate the mission of the land grant institution," he said. Swenson said the College of Agriculture will use the report when communicating to various groups about the importance of agriculture in Iowa. Brian Meyer, Agriculture Information Services program director, said the deans and faculty of the College of Agriculture will draw data from the report when speaking to business groups and community leaders around the state."People may not realize ... what kind of impact [agriculture] does have on the economy," Meyer said.

Even if they do know, he said, "it's good to remind them."

Arizona Debate Institute 2008 Pre-Institute Evidence

36 State Econ DA

*** ARKANSAS ECON 1NC

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

Arkansas Econ Shell (1/3) A. Natural Gas Pipeline is pumping life into the Arkansas economy now Boardwalk Pipeline Partners LP has started building a 167-mile, $500 million pipeline to take natural gas from the Fayetteville Shale in north-central Arkansas to market. A peak of about 1,300 people will be employed in Arkansas during the construction, which is expected to be complete early next year. Conway County Judge Jimmy Hart estimated at a news conference Monday morning that 250 Arkansans thus far are employed by the project, which began construction in May. The payroll is an estimated $57 million. The

Fayetteville Shale, a natural-gas formation that stretches from north-central Arkansas to the Mississippi River, is expected to have a $22 billion impact on the Arkansas economy between 2005 and 2012, according to a study by the University of Arkansas. However, state officials have said that number may be exaggerated. Originally announced in December 2006, Houston-based Boardwalk's pipeline was expected to cost $360 million. Since then, the price tag has gone up because of increased labor and materials costs, said Mike Mc-Mahon, senior vice president and general counsel for Boardwalk. "Since we've experienced increases in prices on some of the other projects we've completed, we're estimating a little bit higher than what we first reported on costs," McMahon said during a phone interview Monday. Gov. Mike Beebe toured the construction site in Center Ridge on Monday morning. "Not just for this

area, but for the whole state, this is jobs; it's employment," he said. "It's the opportunity for people to make money and spend money. That helps the retailers - that helps every aspect of the Arkansas economy." Boardwalk's Fayetteville Lateral pipeline is part of an almost $5 billion investment to link unconventional natural-gas sources to the company's already established main transportation lines.

B. The aff cuts farm subsides which would cripple the Arkansas economy. Arkansas Democrat-Gazette 03-13-05 (Cotton farmers hit by 1-2 punch Arkansans stung by Bush subsidy plans, WTO trade ruling, Arkansas Democrat-Gazette (Little Rock) lexisnexis)

Given U.S. cotton's increasing dependence on exports, the World Trade Organization's cotton ruling has an added significance. But Seth Meyer, an agricultural economist at the University of Missouri, doesn't expect to see any immediate changes in U.S. cotton subsidies. "There is no WTO police force which comes in and makes us change our rules," Meyer said, although Brazil eventually could be authorized to invoke retaliatory trade measures. The 301-page WTO appeals decision, which followed an initial 370-page ruling, is still being reviewed by U.S. trade officials and cotton-industry leaders. But Meyer said the appeals body "refused to answer" or quantify a number of issues, thus making it difficult to determine what penalties might be appropriate. "There's really no short-term motivation to make some correction today," he said. The National Cotton Council has cautioned that "reductions in U.S. agricultural support, prior to the completion of international trade negotiations, is the equivalent of unilateral disarmament." Randy Veach, a Mississippi County cotton farmer from Manila, said he believes the trade and budget issues are linked and that the outcome of the negotiations could have a significant impact on Arkansas. "There's no doubt that Congress and the administration are trying to make [farm] payments `greener' and less tied to markets and to production," which would facilitate WTO compliance, Veach said. Many observers believe "greener" farm programs, which would reward farmers for conservation and environmental performance, would be preferable to programs that reward them for agricultural productivity. The University of Arkansas has estimated that Bush's proposed budget reductions would mean $200 million less in farm subsidies for Arkansas during 2006, farmer Veach said. "That would cripple the agriculture economy in Arkansas." Eric Wailes, an agricultural economist at the University of Arkansas, said farm subsidies have increased the value of farmland and a drop in subsidies could reverse that trend.

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State Econ DA

Arkansas Econ Shell (2/3) C. The agriculture industry is the backbone to the US economy – a depression in the ag community would impact the whole country Business Wire, March 16, 2006 (“Agriculture Leaders Celebrate National Agriculture Day; Washington, DC, Events Honor the Essential Role that Agriculture Plays in America's Economy” Business Wire, http://findarticles.com/p/articles/mi_m0EIN/is_2006_March_16/ai_n26797789)

National Agriculture Week's kick-off begins today with the celebration of National Agriculture Day in Washington, DC. A series of events designed to celebrate American agriculture and honor the people who work to meet our everyday needs will take place throughout the day. Leading corporations, such as Archer-Daniels Midland (NYSE:ADM) and John Deere, as well as elected officials, government agencies and industry organizations will gather in our nation's capital to educate Americans about the essential role of agriculture in maintaining a strong economy. To kick-off National Agriculture Day, U.S. Representative Bob Goodlatte (R-VA), Chairman of the House Agriculture Committee, spoke at an FFA rally held in front of the Capitol building. Other events taking place today included a luncheon at the National Press Club, with keynote speaker U.S. Senator Saxby Chambliss (RGA), Chairman of the Senate Agriculture Committee. Orion Samuelson, one of the nation's most distinguished farm broadcasters, and John Block, executive vice president and president, wholesale division of the Food Marketing Institute, will serve as masters of ceremonies today. "ADM is proud to support the Agriculture Council of America and its celebration of American farming through National Agriculture Day and National Agriculture Week," stated Brian Peterson, ADM Senior Vice President-Corporate Affairs. "These events both recognize and celebrate agriculture, which

contributes more than one-tenth of the U.S. economy." "John Deere has been committed to the American farmer since 1837," said Doug DeVries, senior vice-president, agricultural marketing at John Deere. "Supporting the Agriculture Council of America and the Ag Day effort is a very effective way to help the public learn more about the important role the American farmer plays in their lives today." National Ag

Day highlights the abundance provided by agriculture, the backbone of the nation's economy. More than 22 million people work in the agriculture industry, and raising the American public's awareness of the importance U.S. agriculture plays in the stability of the economy and in feeding the world is the goal of National Agriculture Day and National Agriculture Week, March 19-25.

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State Econ DA

Arkansas Econ Shell (3/3) D. US key to world economy Bisseker, 2007 (Claire Bisseker, staff writer for the Financial Mail, May 18, 2007, GLOBAL ECONOMY. When the US sneezes ..., Financial Mail, p.ln ) Investors are watchful, aware that growth slowdowns are often precursors to turning points in economic activity. The big question is whether the US weakness is a temporary slowdown - a midcycle pause as occurred in 1986 and 1995 - or the early stage of a recession. The IMF's latest World Economic Outlook seeks to answer this question and to probe whether the rest of the world can decouple from a US slowdown or whether the tighter integration of the global economy has increased the scope for spillover effects. US recessions have in the past usually coincided with significant reductions in global growth, hence the expression: "If the US sneezes, the rest of the world catches a cold."

E. Global economic decline will bring Armageddon. Bearden, Lt. Col, 2000. [Tom, PhD Nuclear Engineering, The Tom Bearden Website, April 25, 2000, o/l: http://www.cheniere.org/correspondence/042500%20-%20modified.htm, Accessed 5/11/07.] Just prior to the terrible collapse of the World economy, with the crumbling well underway and rising, it is inevitable that some of the weapons of mass destruction will be used by one or more nations on others. An interesting result then —as all the old strategic studies used to show—is that everyone will fire everything as fast as possible against their perceived enemies. The reason is simple: When the mass destruction weapons are unleashed at all, the only chance a nation has to survive is to desperately try to destroy its perceived enemies before they destroy it. So there will erupt a spasmodic unleashing of the long range missiles, nuclear arsenals, and biological warfare arsenals of the nations as they feel the economic collapse, poverty, death, misery, etc. a bit earlier. The ensuing holocaust is certain to immediately draw in the major nations also, and literally a hell on earth will result. In short, we will get the great Armageddon we have been fearing since the advent of the nuclear genie. Right now, my personal estimate is that we have about a 99% chance of that scenario or some modified version of it, resulting.

Arizona Debate Institute 2008 Pre-Institute Evidence

40 State Econ DA

***ARKANSAS EXTENSIONS

Arizona Debate Institute 2008

41

Pre-Institute Evidence

State Econ DA

UQ: Arkansas Econ Strong Arkansas economy is growing strong now The Associated Press State & Local Wire, 04-23-08 (“Business leaders say Ark. economy has its strong points” April 23, 2008 lexisnexis)

The Arkansas economy has some soft spots, such as in sectors related to new home construction, but business leaders say the state has the elements in place to bounce back from the current slowdown. Randy Zook, a deputy director of the Arkansas Economic Development Commission, said direct investment from overseas will continue to help add jobs to the state. Speaking at the spring economic forecast conference by the University of Arkansas at Little Rock, Zook cited manufacturers that have recently set up shop in Little Rock. LM Glasfiber is building a $150 million plant at the Little Rock port where it will make windmill blades to supply the wind power industry. The company has already started production at a temporary site in south Little Rock. Other companies include two pipe manufacturers, Welspun Group Inc. and Man Industries Ltd., both of India. Welspun and Man each say they expect to spend $100 million for plants at the Arkansas River port. With the closure of a meat plant that burned in Booneville, that city is coping with the loss of 800 jobs, though there is a chance the plant may reopen. "If you're in Booneville right now, you're not in a recession, you're in a depression," Zook said. He said the situation is similar in Prescott, where a Potlatch Corp. mill has closed, putting about 180 people out of work. Forest products and businesses relate to new home construction are taking it on the chin because of the slowdown. But Zook said the foundation is solid. "Those things are going to come back," Zook said. "The industry will work off the unsold inventory." Zook said there are some clear bright spots for Arkansas, including the income that row crop

farmers are expecting due to high prices for commodities such as soybeans, rice and corn. Plus, there is the development of the Fayetteville Shale play.

Arkansas’s economy is up now Arkansas Democrat-Gazette, 04-23-08 (DAVID SMITH “Economist: Recession is here He says subprime mortgage market biggest contributor” April 23, 2008, lexisnexis) "Even in November, there was a wide range of people who were very optimistic that this economy was going to grow at a rate of about 2 percent a year," Goho said. "But I believe the economic growth is not there. I don't expect an economic collapse, but I think there will be serious economic turmoil." Arkansas' economy is doing relatively well, according to businessmen who also spoke at the conference at the Little

Smith, senior vice president at Dassault Falcon Jet; Thomas Schueck, chairman of Lexicon Inc. of Little Rock; Danny Games, director of corporate development at Chesapeake Energy; and Randy Zook, deputy director of administration and finance at the Arkansas Economic Development Commission. But a Rock Hilton - Robert

problem facing companies and the state is finding qualified workers. Smith said Falcon Jet has 200 high-paying jobs available, but cannot find people to fill them. Schueck said Lexicon, which is the parent for Schueck Steel, has had to develop a program where it trains workers because there are no qualified people to hire. Games said Chesapeake has dozens of jobs for workers on natural-gas drilling rigs that pay $55,000 and up, but it has to have people trained at community colleges in Beebe and Poteau, Okla., to fill them. Zook noted that there are about 75,000 Arkansans

who are unemployed, and there are likely 75,000 jobs available across the state. The problem is that the 75,000 unemployed Arkansans aren't qualified to fill the available jobs, Zook said.

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State Econ DA

Lnx: Arkansas Rice, Soybean and Cotton are the three most important crops in Arkansas Arkansas Democrat-Gazette 03-13-05 (Cotton farmers hit by 1-2 punch Arkansans stung by Bush subsidy plans, WTO trade ruling, Arkansas Democrat-Gazette (Little Rock) lexisnexis)

Although Arkansas' planted cotton acreage fell in 2004 to a 10-year low of 910,000 acres, a record yield of 1,112 pounds per acre boosted the state's production to an all-time high of 2.1 million bales of cotton fiber. The 795 tons of cottonseed produced was exceeded only in 1937. Arkansas' 2004 season-average cotton price of 55.9 cents per pound meant that the state's cotton fiber was worth $488.4 million. The cottonseeds were worth an additional $77.5 million. For the 10 th straight year, cotton was Arkansas' third-most important row crop in terms of production value. The state's 2004 rice crop, worth $768.2 million, and soybean crop, worth $690.6 million, ranked first and second. Cotton also ranked third in terms of 2004 planted acreage in Arkansas. Soybeans ranked first at 3.2 million acres and rice second at 1.6 million acres.

Arkansas receives approximately $900 million in subsidies Arkansas Democrat-Gazette 03-13-05 (Cotton farmers hit by 1-2 punch Arkansans stung by Bush subsidy plans, WTO trade ruling, Arkansas Democrat-Gazette (Little Rock) lexisnexis)

upland cotton, the only variety grown in Arkansas, is one of the most expensive crops that a farmer can grow. The University of Arkansas Cooperative Extension Service has estimated that cotton production costs this year will range between $368 and $528 an acre. The costs vary UNIQUELY COTTON Gossypium hirsutum, or

depending upon the type of tillage used to prepare fields, what kind of irrigation - if any - is used, the size of equipment that is employed, the kinds of biotech seeds planted and in which boll-weevil-eradication zone the acreage is located. Because cotton is a tropical perennial species, it requires considerable genetic manipulation to develop into a productive annual crop for a temperate environment. Before the crop is picked, for example, defoliants are applied to remove leaves and temporarily halt plant growth. Through genetic engineering, cotton breeders have developed new varieties that are insect-resistant and/or herbicide-tolerant. In 2004, 94 percent of the cotton planted in Arkansas was sown using such varieties. Because

cotton production is so costly, cotton farmers tend to be some of Arkansas' largest agricultural producers. Ronnie Kennett, land manager for Leachville-based Adams Land Co., which operates the state's largest cotton gin, said he works with "10 to 12 farmers who farm anywhere from 4,000 to 7,000 acres." Several of them have four or five six-row cotton pickers worth $300,000 each, he added. Deere & Co., the leading U.S. manufacturer of cotton-harvesting equipment, sells new six-row pickers that list for $425,000, said Barry Nelson, public relations manager for John Deere's North American agricultural equipment division. Module builders, which bundle seed cotton into huge "loaves" for transport to a gin, are another machine specially designed for cotton production. Tim Tenhet, sales and marketing manager for The KBH Corp. of Clarksdale, Miss., said cotton farmers tend to own one module builder for every 1,000 acres. Each module builder costs $25,000 to $30,000, he said. Given such large investments, the National Cotton Council has urged the Bush administration to leave the 2002 Farm Bill - "a multiyear contract" - intact until its scheduled expiration. Tri Watkins, whose family owns Rabbit Ridge Gin & Warehouse at Lepanto in Poinsett County, said that because of the large investments made by cotton ginners, they need the long-term stability that they had believed the current farm bill provided. Last year, Rabbit Ridge spent about $500,000 to install a new bale press, Watkins said. "What we're hoping is that ... we at least have some time to make a return on the capital that's been invested in that equipment." Because cotton farmers tend to be large, they also are among

the largest recipients of federal commodity payments. The Environmental Working Group, a Washington nonprofit organization that has been critical of farm subsidies, calculated that cotton farmers nationwide received $2.7 billion of the $16.4 billion paid in subsidies in 2003. Arkansas farmers received $898.9 million of 2003's farm subsidies, with $162.7 million going to cotton farmers, according to the Environmental Working Group. The top 10 percent of those Arkansas cotton beneficiaries received 68 percent of that money; the top 20 percent, 86 percent. Although the current federal farm-program payment limit is theoretically $180,000 per business entity or $360,000 per farmer, 25 Arkansas farming entities received cotton subsidies in 2003 that ranged between $362,155 and $1,266,301, according to the Environmental Working Group. More than 40 Arkansas cottonfarming entities received 2003 subsidies that exceeded Bush's proposed $250,000 payment cap.

Arizona Debate Institute 2008 Pre-Institute Evidence

43 State Econ DA

*** GENERAL ECON CARDS

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

Brink: Ag Collapse Brink: Farm-Economy collapse is around the corner. Fall in demand due to subsidies cuts would crumble the farm economy. MSNBC, 04-20-08 (“Amid strong farm economy, some dire signs” Associated Press, http://www.msnbc.msn.com/id/24227498/)

At a time of record agricultural profits, concerns are mounting that American farmers could be edging toward a financial crisis not seen since the 1980s farm-economy collapse. Soaring land values, increasing debt and a reliance on government subsidies for ethanol production have prompted economists to warn that what some describe as a golden age of agriculture could come to a sudden end. At risk are the livelihoods of thousands of farmers, the health of hundreds of banks and the vitality of an agricultural industry that has been one of the nation's few economic bright spots in recent months. "We're in a very risky time, and yet we don't seem concerned about that risk nearly as much as we should be," said Barry L. Flinchbaugh, an agricultural economist at Kansas State University.The potential problem, economists said, is that strong demand for corn and other grains has caused prices to reach historic highs. That has led to record farmland values and steadily increasing debt as farmers borrow money to buy more land, finance the higher costs of fertilizer and seed and upgrade their equipment. As long as the demand remains, good times for farmers should continue. But if demand falls, they could find themselves in a situation reminiscent of the early 1980s when the farm economy largely crumbled. Among factors that could affect demand would be a change in the federal government's policy on ethanol subsidies, now estimated at about $6 billion a year, revisions in the farm bill that would lower support payments or an increase in the dollar's value, which would hurt exports.

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Pre-Institute Evidence

State Econ DA

Brink: Ag Collapse Farm debt is increasing – creating a brink for the collapse of farm economy if demand drops MSNBC, 04-20-08 (“Amid strong farm economy, some dire signs” Associated Press, http://www.msnbc.msn.com/id/24227498/)

Flinchbaugh and others said the agricultural economy bears a striking resemblance to that seen in the mid1970s, when a seemingly insatiable demand for U.S. crops drove up land values and farmers took advantage of their soaring equity to increase debt. When federal policy changed and demand suddenly dropped, land values and farm income plunged, forcing thousands of farmers to sell out and leading to the failure of nearly 300 agricultural banks. Grain farmer Harlan Meier, 76, of Davenport, lived through the last two major farm economy downturns — the Depression in the 1930s and the 1980s farm crisis. Even at a time of such strong prices, Meier noted that farmers are paying much higher prices for seed and nitrogen fertilizer, a product needed in abundance for fields repeatedly planted in corn. The increased costs and memories of the 1980s have made him hesitant to take on debt. "I guess you could say there's an awful lot of concern in the rural communities and with some of the city people," Meier said. "I would think there would be a lot of cautiousness among farmers because most of the people can remember the '80s and I would think there's probably a lot of cautious people now on spending a lot of money." Economists worry

that farmers could be tempted to add debt due to the belief that high commodity prices would continue. Those prices have been driven up by a strong demand for corn and soybeans from countries such as China and India, coupled with the needs of more than 50 corn-reliant ethanol plants built in the last few years. The cash price for corn on the Chicago Board of Trade has soared from $1.86 a bushel in the 2004-2005 marketing year to the current price of about $6 per bushel. Soybeans were at $5.88 a bushel in 2004-2005 and now are at around $13.50.

As prices have climbed, so have farmland values. In Iowa, the nation's biggest corn producer, the average price per acre of farmland has increased 67 percent in the past five years."Land prices are increasing dramatically, and prices of grains are high just like the '70s," said Danny Klinefelter, an extension economist at Texas A&M. "It concerns me. It concerns me a lot." Harl, who has written extensively on the 1980s farm crisis, said the key is how much debt farmers take on, and it appears that amount is increasing significantly. "The longer these higher commodity prices go, the more it will draw people in to borrow heavily

to buy the land and that's when things get dicey," Harl said. According to the U.S. Department of Agriculture, farm business debt is expected to reach $228 billion by the end of this year, an $8 billion increase from last year and a new record for the fourth consecutive year. The government said much of the debt is driven by the need for new machinery, equipment and grain storage, as farmers strive to keep up with the increasing demand for grain. Debt for land is expected to rise to nearly $121 billion this year, a 2.8 percent increase. And the USDA said from the beginning of 2003 to the end of 2008, total farm debt will have increased by about $52.8 billion, or more than 30 percent. Recent reports filed by agricultural lenders shows the government's expectations are playing out in reality. Farm Credit Services of Mid-America, which provided $12 billion in

agricultural loans for farmers in Indiana, Ohio, Tennessee, and Kentucky last year, noted in its annual report for 2007 that high crop prices "have created a much more risky and volatile agriculture economy."

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Pre-Institute Evidence

State Econ DA

Internal Lnx: US Econ depends on Ag The American economy relies on ag Nelson, 2007 (Ben Nelson [Nebraska's Senator] “2007 Food & Fuel Security Act” Homepage of Ben Nelson, http://bennelson.senate.gov/aghearing/index.cfm)

Agriculture forms the backbone of the American economy by providing inexpensive food and domestic energy sources for Americans. These benefits can only be maintained, however, through strong policies that support farmers and ranchers. This year, the Senate is considering the legislation to strengthen family farms and rural communities. The farm bill – or the Food and Fuel Security Act – must provide a strong safety net for family farmers and ranchers and recognize the key role agriculture plays in both our food and fuel security. This safety net, however, must also include a real cap on the amount of money an operation can receive. If we can hold down the amount of subsidies going to support large, profitable operations, then we will have the resources to invest in rural development programs necessary for the survival of our rural communities.

Arizona Debate Institute 2008 Pre-Institute Evidence

47 State Econ DA

Internal Lnx: US Econ Key 2 Global Econ US recession goes global Washington Post, 07-16-08 (“An Economy Thrown Into Turmoil; U.S. Financial Crisis Increasingly Infecting The Rest of the World” Anthony Faiola and Neil Irwin; Washington Post Staff Writers, lexisnexis)

Fresh worries spread through world markets yesterday as a crisis of confidence battered more U.S. financial institutions and the chairman of the Federal Reserve issued a sober assessment of the country's economic woes. It appeared to mark a new phase in the U.S. financial crisis, with fears of a contagion effect that could yet weigh more heavily on the global economy. With world capital markets interconnected as never before -- financial problems at U.S. banks are affecting pension funds in Japan as well as depositors in California -- a mounting sense that America's financial crisis is still far from touching bottom is adding to global troubles, including rising overall inflation and soaring energy prices. In Paris and London, stock markets fell yesterday to their lowest levels since 2005, partly as investors doubted plans unveiled by U.S. regulators this weekend to prop up the ailing government-sponsored mortgage giants Fannie Mae and Freddie Mac. In Tokyo, the benchmark stock index fell 2 percent, slipping to levels not seen in 3 1/2 months as the Nikkei newspaper reported that Japan's three largest banks were holding at least $44.2 billion in debt issued by Fannie Mae and Freddie Mac.

US economy is key to global economy Washington Post, 07-16-08 (“An Economy Thrown Into Turmoil; U.S. Financial Crisis Increasingly Infecting The Rest of the World” Anthony Faiola and Neil Irwin; Washington Post Staff Writers, lexisnexis) Global concern is mounting for several reasons. First, foreign financial institutions are heavily exposed to U.S. lending giants, and an estimated 50 percent of U.S. mortgage-backed securities are held by foreign investors. While Citibank and Merrill Lynch have been forced to take massive writedowns on bad U.S. loans, so, too, have the Swiss banking giant UBS and Germany's IKB Deutsche Industriebank. In Norway, eight towns have reported losing at least $125 million on their investments in U.S. mortgages. In Japan, several pension funds have significant portions of their investments in debt issued by Fannie Mae and Freddie Mac. American woes have fostered a global credit crunch, claiming

overseas victims such as Britain's Northern Rock, where a lack of liquidity led to its nationalization by the British government in February. Of equal concern is that U.S. consumers, who gobble up more foreign goods than the citizens of any other land, will be forced to downscale their lifestyles significantly in the face of falling housing values, rising unemployment and a possible recession. One camp of economists has

argued that the rest of the world has to some measure "decoupled" from the U.S. economy -- with consumers in Europe, Asian powerhouses such as China and India, and fast-growing Latin America potentially blunting the drag on the global economy from a U.S. recession. But others have argued that soaring energy prices, rising inflation and a weakening dollar are already

zapping the strength out of the world economy, with a full blown U.S. recession likely to take the wind out of the sails of global growth. "The rest of the world has accumulated U.S. assets, and if these prices go down, the rest of the world suffers," said Alex Patelis, head of international economics for Merrill Lynch in London. "That said, many foreign banks are still doing very well. In Japan, for example, you have one of the healthiest banking sectors around. So there is a global impact, but the biggest impact is still going to be in the United States."

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Pre-Institute Evidence

State Econ DA

Internal Lnx: Perception Perception is key – if the US economy is perceived as performing poorly, it becomes a selffulfilling prophecy Washington Post, 07-16-08 (“An Economy Thrown Into Turmoil; U.S. Financial Crisis Increasingly Infecting The Rest of the World” Anthony Faiola and Neil Irwin; Washington Post Staff Writers, lexisnexis)

President Bush yesterday sought to reassure shaky markets and frightened consumers, asserting that the U.S. economy is fundamentally sound and urging Congress to quickly pass legislation to shore up the government-sponsored lenders. He downplayed predictions that a large number of banks may be on the verge of failure and explained at length about the federal insurance system that guarantees deposits up to $100,000. "I understand there is a lot of nervousness," Bush said. "But the economy is growing, productivity is high, trade is up, people are working. It's not as good as we'd like, but to the extent that we find weakness, we'll move." Yet the tipping points of economic crises, analysts said, are almost always more about psychology than fundamentals, with panic over a bank's insolvency, for instance, potentially becoming a self-fulfilling prophecy. "I think the problem now is a general confidence crisis that is complicated by some global contagion that's now spreading," said Brian Bethune, a chief economist with Global Insight of Lexington, Mass.

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Pre-Institute Evidence

State Econ DA

Internal Lnx UQ: US Econ Ok US is recovering from economic dip now The Main Wire, 06-23-08 (“Have Only Made 'Modest' Changes in IMF's 2009 U.S. Growth Forecast” By Brai OdionEsene, lexisnexis)

The U.S. economy has held up well, avoiding the "hard landings" that generally follow hard shocks, however, growth will remain weak in 2008 before recovering gradually next year -- slower than usual due to financial turmoil and high commodity prices, this according to a top official from the International Monetary Fund. In a press briefing Friday at the conclusion of the 2008 Article IV consultation with the United States, John Lipsky, deputy-managing director of the IMF, described the response of policymakers as "quick and decisive" in putting in place temporary monetary and fiscal stimuli, adding, "We think this will help cushion the economic impact of the shocks and will provide some insurance against ... asset price declines feeding through to real activity. "We do not expect a significant recession ... the data

does not point to this as a critical risk," Lipsky said. The IMF's concern is that in the second half of 2008, with income growth remaining "sluggish," the stimulus effects waning, growth will remain "relatively stagnant" into the beginning of 2009 before recovering, he said. For the year as a whole, the IMF expects the average growth rate for the United States "to be a little over 1%," with real GDP "roughly flat in 2008," and 2% in 2009. Given that it is exceedingly costly to reverse the deterioration in inflation expectations once they set in, Lipsky said, "We do see the case for a vigorous response once the economy's recovery has firmly taken hold." "The slack that we see emerging in the economy will tend to limit additional inflationary pressures," he added. In terms of the Fed acting to battle inflation, Lipsky said that "it would be very unusual to see the Federal Reserve raising policy rates in an environment with the unemployment rate still tending to move higher, as you would expect in a period of below trend growth." The changes in the IMF forecast for the United States, especially in forward looking aspects, have

been "exceedingly modest" Lipsky said. By the second half of 2008 growth will continue to slow, he said. "When we look more broadly, we anticipate that in the second half of this year, growth in all the major industrial economies will be below trend." The restoration of growth will be more gradual, even with monetary and fiscal policies set to stimulate recovery, Lipsky said. With gradual healing in the financial sector, and the challenge of oil and commodity prices not receding quickly, the IMF expects that growth in the United States "in the coming five to 10 years ... is going to depend to an unusual degree on the strength of domestic demand growth in the U.S. trading partners." Lipsky expanded further, saying that "the recovery will depend less on consumption and residential construction, more relatively speaking on business investment and improvements in net exports." The IMF expects "the U.S. recovery next year to be faster than the international experience ... because

of the measures taken and the flexibility in the U.S. economy," Anoop Singh, director of the IMF's Western Hemisphere department said, adding that they expect the U.S. economy to be back at "full potential" by the end of next year.

Arizona Debate Institute 2008 Pre-Institute Evidence

***AFF ANSWERS TO OHIO DA

50 State Econ DA

Arizona Debate Institute 2008

51

Pre-Institute Evidence

State Econ DA

AFF: No Ag Market Bubble Farmers are reinvesting wisely, farmland prices are resilient – its not a bubble Jim McTague - Barrons Financial Weekly, Washington Editor -December 31, 2007 “Don't Bet the Farm” http://online.barrons.com/article_print/SB119882116265055389.html?mod=b_hps_9_0001_b_this_weeks_magazi ne_home_top accessed 7-23-08 [nfb] Farming has become so lucrative that households with more than $1 million in investable assets rose by 17% in both Dakotas from 2005 to 2006, versus 9% in New York and 10.5% in California, reports the Phoenix Affluent Marketing Service in Rhinebeck, N.Y. Nebraska's ranks of millionaire households' rose 16% in that span. MANY FLUSH FARMERS are reinvesting their gains in additional acreage. This means that the market isn't nearly as leveraged as was residential real estate, says Iowa State's Duffy, and so is less prone to becoming a bubble. Furthermore, farmers can lock in profits on futures exchanges at current prices going out two or three years. Indeed, 2008 futures for corn, soybeans and wheat reached new highs in late-fall and early-winter trading. Investors are so sold on this story line that they still are buying farmland in water-starved areas of Georgia. "People still strongly believe that land is a good investment," says Ben Hudson of Hudson and Marshall Auctioneers in Atlanta. "The drought had no adverse impact on prices."

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State Econ DA

N/U – Ohio Economy Down [1/2] Ohio’s economy is going down JOHN BOOTH - Crain's Cleveland Business – 7-14, 2008 “NO PANIC, NO PARADES” L/N [nfb] Surrounded by a slow economy, tighter client budgets and slumps in the ad-heavy building and automotive industries, the moods at Northeast Ohio's advertising and marketing agencies run the gamut from optimistic to ... more optimistic. It's kind of reminiscent of George Orwell's ``Animal Farm'' and the notion that ``some animals are more equal than others.'' Maybe it's just in their nature, but talking about new accounts, staffing levels and revenue and billings growth compared with the beginning of 2007, agency executives don't seem to be in a panic, even if they're not throwing parties, either. Not that anyone's having a good enough time to mention many specific figures — dollar amounts or otherwise. (Several agencies' revenues were included in May's 2008 Agency Report by Crain's sister publication Advertising Age, though most of those were marked as Ad Age estimates.) Revenues would seem to be generally up, though not wildly so: Of the 14 agency leaders interviewed, all but one claimed upward trends in revenues or billings, though only a few specifically mentioned double-digit revenue growth in 2007 or spoke of the past year and a half in superlative terms. Malone president Fred Bidwell offered one of the most upbeat responses. The region's biggest ad shop just garnered a ``very significant new business win'' in the form of an assignment from Johnson & Johnson that will lead to hiring locally and out of town. Diversity in the client roster helps: When companies like John Deere and watercraft-maker Bombardier take hits in a down economy, others like Nestle and KimberlyClark tend to shore up their consumer targeting. As Mr. Bidwell noted, you might put off buying a lawn tractor, but ``you've got to eat, and you need toilet paper.'' ``Because we're a retail marketing-focused agency, in bad times, dollars often get shifted from the brand agencies over to us because we're more likely to drive an immediate result,'' Mr. Bidwell said. ``That's been a trend over the years, and I think it's just accelerated.'' Stern president Bill Stern said while being an agency with a strong consumer focus comes with tough measurability standards — ``either you sold the Big Macs or you sold the rings or you didn't'' — those visible results also mean clients see down cycles as a chance to gain market share. ``You really don't want to let the other guy take some of your business,'' Mr. Stern said. ``You really cannot afford to stop advertising, regardless of the economy. Our clients have continued to spend aggressively through this slowdown.'' Holding steady Several executives addressed the relative strength of the consumer-oriented ad market versus the business-to-business and industrial arena, and Jack DeLeo of Akron-based Hitchcock Fleming & Associates admits that the firm, which does a lot of work for Goodyear and its associated brands as well as several building-related companies like Louisiana-Pacific and Carter Lumber, is feeling a bit of the economy's one-two punch on those industries. ``I think everybody's just in a slight holding pattern, just waiting to see what's coming down the

road,'' he said. ``They're still doing work, and things are moving, but not as rapidly as if the economy were doing a lot better.'' While Mr. DeLeo said he can't envision rapid turnarounds for the automotive or building industries, the 110-employee firm is managing to maintain its staff and revenue levels. Despite Cleveland-based Liggett Stashower's building-industry-heavy client roster, agency chief executive Mark Nylander is upbeat and noted that, measured by pre-tax profits, 2007 was the firm's third-best year of the last two decades, marking ``a significant improvement'' over 2006. He's also forecasting 5% to 8% revenue growth for 2008. Asked how the agency saw a big boost in pre-tax profits in a purportedly flat year — Mr. Nylander disputes Advertising Age's estimates of $13.1 million in revenues for both 2006 and 2007, though he would not offer specific figures — the CEO said ``you do things operationally to impact the bottom line.'' ``We did become much more focused, at least in terms of our business development efforts, on the building products category, and that has begun to pay,'' Mr. Nylander said. ``At the same time, coming off a challenging year, we took a look at operations and did some things to manage our operations more effectively and more efficiently.'' He noted that the agency's 65-person staff is about the same size as it was at the start of 2007. Staff- and revenue-wise, Brokaw finds itself ``steady'' but profitable, according to agency CEO Bill Brokaw. Still, he was pleasantly surprised when the first quarter of 2008 netted ``more new business than we have (gotten) in years,'' including accounts for clients whose goods or services are disposable-income-based rather than need-based. Looking for an edge Mr. Brokaw also gave voice to another common theme: Northeast Ohio is a more affordable place for big-ticket advertisers to find agencies. With lower business costs than those facing agencies in markets like New York and San Francisco, Cleveland firms can play the ``more bang for your buck'' card. ``I think that's an edge that we have over national competition,'' Mr. Brokaw said. ``Not that the national brands are looking for bargains, but when they do see that you're not expensive … they may be more inclined to take that leap of faith.'' Taking a slightly harsher look at the region's ad picture was Point to Point's Mark Goren. While stressing that he didn't want to sound cynical, Mr. Goren remains concerned about Northeast Ohio's marketing community as a whole. Like others, he sensed a more aggressive atmosphere in terms of pursuing accounts, but he also said things aren't improving. ``If the agencies in the region don't strengthen or don't become healthier, then it becomes more difficult to attract talent,'' he said. ``And if you can't attract talent, then the entire region will continue to weaken.'' Count Jim Nash of Marcus Thomas also among those who characterized 2007 as a ``great year'' with double-digit billings growth and the addition of about a half-dozen jobs at the Warrensville Heights firm. He said 2008 looks solid as well. ``Within specific industries … we're seeing that some of our clients have

reduced their budgets,'' Mr. Nash said. ``That has affected us for those specific clients, but overall, we have been able to generate new business with new clients.'' That said, he added that he's got ``a pretty wary eye cast on the economic horizon (because) …we're not sure if we're at the bottom of this particular downturn in the economy or whether we're starting to move out of it.''

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Pre-Institute Evidence

State Econ DA

N/U – Ohio Economy Down [2/2] All indicators show Ohio’s economy going down JULIE CARR SMYTH - AP Statehouse Correspondent – 6-30, 2008 The Associated Press State & Local Wire “Ohioans give governor pass on economy” Republicans had a field day recently after the governor of Kansas came to Ohio and commended Gov. Ted Strickland for the job he's done turning around the state's economy. Look at the record, they said: Unemployment in the state hit a five-year high of 6.3 percent in May, according to figures from the Ohio Department of Job and Family Services. Layoffs doubled in May, according to the Bureau of Labor Statistics. Thousands of jobs have been lost since Strickland took office, including from General Motors Corp., ABX Air, and DHL Express. The number of Ohioans receiving food stamps and public assistance is up 9.4 percent in central Ohio from a year ago. Ohio ranks ninth nationally in its rate of home foreclosures. The state is failing to attract high-technology jobs, as Strickland had promised, according to a new Milken Institute study. "Ted Strickland said he had a plan to turn the state's economy around without raising taxes, but so far he's failed to deliver," said Kevin DeWine, deputy chairman of the Ohio Republican Party, in a statement. Granted, the situation is bleak. Hardly an indicator has seen an uptick since Strickland took office and placed his righthand man, Lt. Gov. Lee Fisher, in charge of economic development.

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

AFF: Global Warming Kills Ohio Econ Climate change wrecks Ohio’s economy Business Courier of Cincinnati July 23, 2008 “Report: Climate change could cost Ohio's economy more than $1 billion” http://www.bizjournals.com/cincinnati/stories/2008/07/21/daily37.html accessed 7-23-08 [nfb] A new report issued by the National Conference of State Legislatures and the Center for Integrative Environmental Research says that climate change will lead to lower water levels in Lake Erie and cost Ohio's shipping industry and related businesses more than $1 billion annually. The study found that changes in precipitation levels caused by climate change will lower water levels in the lake, which will force companies to spend more on harbor dredging, dock adjustments and other significiant infrastructure changes. "Unless we take action to cut the pollution causing climate change we risk losing thousands of shipping jobs and millions in business revenue in Ohio," Jim Coleman, Ohio's Tomorrow executive director, said in a news release. "Ohio's economy is facing tough times and ignoring the problems created by climate change will add another unnecessary burden." The finding is part of a study, "State Economic and Environmental Costs of Climate Change," which examined the impact of climate change on 12 states around the country. The Environmental Defense Fund helped finance the research and production of the report. The report also found that climate changed will impact Ohio by cutting forest productivity by as much as 50 percent; drying out lands needed for ducks and other migratory birds, which are important to the money spent on hunting; and increasing the likelihood for flooding, severe heat waves and other extreme weather that will strain the budgets of local governments.

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Pre-Institute Evidence

State Econ DA

AFF: Turn – Dairy Turn – inflated corn prices hurt the Ohio dairy farms – key to the larger economy Jeffrey L. Frischkorn 7-5-2008 “Farmers wither as costs grow” http://www.zwire.com/site/news.cfm?newsid=19831206&BRD=1698&PAG=461&dept_id=21849&rfi=6 accessed 7-23-08 [nfb] Jim Timmons, a full-time farmer in Burton Township, is feeling the financial pinch even though he's seeing record prices for the milk his dairy customers produce. Timmons is just glad that the commodities price increases are not wiping out his razor-thin profit margin entirely. He also once raised dairy cows but sold them off three years ago because of their labor-intensive nature. "What's happened to us is that since the price of corn has gone up, so has the price of fertilizer and everything else," Timmons said. "The market got ahead of us even before we could plant." Consequently the increased cost of doing business for Timmons has slashed into his farming bottom line. Timmons has planted 650 acres of corn, 300 acres of wheat and 170 acres of hay. These grains are sold to dairymen or to market. Statewide, Ohio farmers have planted an estimated 3.35 million acres of corn this year, down an estimated 500,000 acres from 2007. As for soybeans, an estimated 4.6 million acres in Ohio have been planted, up 450,000 acres. Nationally, too, corn planting estimates are down while soybean planting is up. "If you imagine the feed prices doubling and milk prices increasing only 25 to 30 percent, it's obvious that we're being hit," Timmons said. The only salvation for Timmons is that demand for milk is similarly increasing, though not by as much. "If the prices weren't to go up, we'd never even be able to break even. They had to go up to help offset the costs," Timmons said. And those costs are soaring across the board, says James E. Ramey, director of the Ohio field office of the National Agricultural Statistics Service of the U.S. Department of Agriculture. "We've never seen commodity prices this high, and we'll have to see how good farmers are as managers. One thing we do know is that they are facing a lot more risks because of the higher prices," Ramey says. "These increases really have had an impact on dairy producers, egg producers and everything else. Production costs are skyrocketing; all of these costs are going up."

No link only turns – ethanol isn’t economically viable for Ohio anyways Knight Ridder/Tribune Business News > October, 2002 FindArticles “Farm Bill Ethanol Subsidies Have Little Effect on Leipsic, Ohio, Planners” By Tim Rausch http://findarticles.com/p/articles/mi_hb5553/is_200210/ai_n21685303/print?tag=artBody;col1 [nfb] Oct. 8--LEIPSIC, Ohio--Ohio Ethanol shelved its plans for an ethanol plant near Leipsic for economic reasons. Increased Farm Bill subsidies to ethanol makers aren't enough to move those plans off the shelf. The Farm Bill has $405 million set aside for the production, research and use of ethanol and other "biofuels." Ethanol is an alcohol-based fuel distilled from grain. [FYI: Leipsic = small town in Ohio]

Arizona Debate Institute 2008 Pre-Institute Evidence

56 State Econ DA

***AFF ANSWERS TO IOWA

Arizona Debate Institute 2008

57

Pre-Institute Evidence

State Econ DA

Non-UQ: Iowa Econ Low Now Iowa’s economy is low now due to recent flooding. Des Moines Register, 07-04-08 (“Iowa economy may get worse” Des Moines Register by Donnelle Eller http://www.desmoinesregister.com/apps/pbcs.dll/article?AID=/20080704/BUSINESS/807040362/1029)

Iowa's economy, which has avoided the worst of a national downturn, could get sandbagged from widespread flooding. Businesses closed by flooding, crops buried under water, and disruptions to Iowa's rails and roads threaten Iowa's near-term economic health, experts said. "For many businesses, whether we define it as a recession or not, it will feel like a recession," said Ernie Goss, an economics professor at Creighton University in Omaha. A couple of indexes that track Iowa's economy show signs of weakness: - Flooding caused June's Business Conditions Index for Iowa to fall to its lowest level in two years, said Goss, who compiles the index. It included the largest one-month decline ever recorded for the state, he said. "It's not just the company that's out of business in Cedar Rapids, but it's also the companies that sell to the business in Cedar Rapids," Goss said. "It just ripples out." - Iowa's Leading Indicators Index for May posted its second consecutive monthly decline. Before April, the index - a snapshot of economic indicators such as farm prices, factory hours worked and construction - had climbed for 14 months.

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Iowa No Lnx Cutting farm subsidies wouldn’t hurt Iowa – crops would still grow/be produced Samuelson, 09-12-07 (Robert Samuelson [] “America's Absurd Farm Subsidies” Real Clear Politics, http://www.realclearpolitics.com/articles/2007/09/americas_absurd_farm_subsidies.html) Since 1970, farm subsidies have totaled $578 billion, according to the historical tables of the U.S. budget. What has the public gotten for this vast outlay? Not much. Food would be produced without subsidies. Roughly 90 percent of commodity payments go to farmers raising grains (wheat, corn), soybeans, cotton and rice; these products represent about a fifth of farm cash receipts. Meanwhile, meat, vegetable and fruit producers get no direct subsidies. Does anyone truly think that, without subsidies, Iowa's cornfields and Kansas's wheat fields would go fallow? If subsidies vanished, some high-cost farms would cut production or switch crops. Some land values would drop because one source of income (federal payments) would disappear. Still, food supplies would

be ample. The proof: the rest of agriculture that manages without federal largess. In 2005, meat output alone (beef, chicken, pork, veal) totaled 86.8 billion pounds.

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Turn: Iowa & Ethanol Continued ethanol production would collapse the Iowan economy – eventually there will not be enough corn to meet such high demand The Globe and Mail (Canada) 07-23-07 ( BARRIE McKENNA “Corn again: Iowa finds salvation” Lexinexis)

"Farmers have a lot more money to spend," agreed Rick Jones, vice-president of business banking at Iowa Trust & Savings Bank in Emmitsburg. "This whole ethanol thing is changing so fast." Farm real estate has gone though the roof, turning every landowner with more than 200 acres into a millionaire on paper. Local real estate agent Mike Wentzel of Farmers National Co. said farmers could count on a steady 5- to 7-per-cent rise in farm values through much of the 1990s. In the past year, good farmland has shot up as much as 60 per cent, sometimes fetching more than $5,000 an acre and generating record rents for investors. "I never thought in my wildest dreams we'd see land at $4,500 an acre," Mr. Wentzel said. Across Iowa, farmland prices are up an average of 16 per cent in the past year, spurred by a stunning realization that there might not be enough corn in Iowa to meet the auto industry's growing appetite. Most of the United States is

mired in a housing slump. Not here. Iowa is among just a handful of states where house prices are still rising. Emmitsburg saw its first house sold for more than $500,000 this year - unprecedented in a market where houses typically sell for less than $50,000 and the rental market is hot as newcomers move in. And yet even ethanol's biggest local boosters, such as Mr. Brownlee,

worry the boom may not last. He said Poet will need to collect just about every corn cob within 50 kilometres to feed its expanded refinery. "Eventually the industry will have to stop building in Iowa," acknowledged Mr. Brownlee, who sits on the ethanol plant's board. "There won't be enough corn." Critics also warn that high corn prices, combined with the industry's relentless consumption of government subsidies and its unquenchable thirst for power and water may trigger its undoing. The industry may embrace other, cheaper sources of biomass, in Iowa or elsewhere.

Arizona Debate Institute 2008 Pre-Institute Evidence

***AFF ANSWERS TO ARKANSAS

60 State Econ DA

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61

Pre-Institute Evidence

State Econ DA

Non-UQ: Arkansas Econ Low Now Arkansas economy is slowing now – recession coming The Bond Buyer, 05-13-08 (Jim Watts “ARKANSAS: Officials See Surplus Ahead” The Bond Buyer, lexisnexis) Arkansas Department of Finance and Administration officials told the Legislatures Joint Committee on Economic and Tax Policy last week they expect a $94.8 million surplus when fiscal 2008 ends June 30 dueto strong collections of corporate and individual income taxes. Deputy director Tim Leathers said net general revenues this year should be $101.4 million over earlier expectations, for a total of $4.45 billion. That means the budget will be fully funded for the fiscalyear, he said, allowing state agencies to spend another $6.6 millionwhile still posting the surplus. However, Leathers said projections for fiscal 2009 remain at $106.8 million below the level expected when the states two-year budget was adopted in 2007 due to a slowing of income and sales tax collections. He said the finance department expects a mild recession in Arkansas, with a slowing economy in the first six months of fiscal 2009 before it improves slightly in the remainder of the year.

Arkansas economy has slowed – it reflects the national economy Northwest Arkansas Times, 06-29-08 (Scott F. Davis“Market falters : Region not recession-proof : Once rapid job growth down” http://www.nwanews.com/nwat/News/66653/) The rapid job growth that prompted thousands of families to move to Northwest Arkansas during the past several years has slowed significantly during the past year. Annual job growth in Benton and Washington counties peaked at 6. 3 percent in September 2005. This growth slowed to a crawl at. 1 percent in March compared to last year. This weaker job market makes it harder for people looking for a new or better job. It also makes it harder to sell homes in an already weak real estate market because fewer families are moving to Northwest Arkansas and buying homes. The job growth numbers have edged up in recent months, but local economists do not expect a quick turnaround. “ We’ve seen the job growth decline in 2007, and this is expected to continue in 2008, ” Kathy Deck, director of the Center for Business and Economic Research at the Sam Walton College of Business at the University of Arkansas, said. Deck prepares Ar vest Bank’s Skyline Report to help the bank and its customers understand the real estate market in Benton and Washington counties. The bank and its customer can make better decisions if they have better information, Deck said. Deck warned during 2005 and 2006 that the inventory of news houses and lots available in subdivisions in Northwest Arkansas was too high. She was able then to point to the strong job growth and demand as a bright sign. Since then, builders and bankers have put the brakes on building new houses and the glut of new inventory has fallen accordingly. Still, demand for houses is weaker than in recent years, in part, because fewer people are moving here to take new jobs. Not recession-proof The once widely held belief that Northwest Arkansas is recession-proof is proving flawed as the local economy mirrors the national economy — slowing job growth, weak housing market and increasing foreclosures. “ We used to talk about how Northwest Arkansas was recession-proof or insulated from what happened nationally, ” Jeff Collins of Streetsmart Data Services said. “ It’s just obviously not the case. “ The rate of job creation has definitely slowed. We are being affected by what’s happening nationally. ” Before the job growth numbers in Northwest Arkansas can get back on track where they once were, the national economy must improve, he said.

Arizona Debate Institute 2008 Pre-Institute Evidence

62 State Econ DA

***GENERAL AFF ANSWERS

Arizona Debate Institute 2008

63

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State Econ DA

Cutting Subsides Saves Money Cutting Agricultural subsidies would save $35 billion a year Edwards, 2007(Chris Edwards [top expert on federal and state/local tax and budget issues. Before joining Cato in 2001, Edwards was senior economist on the congressional Joint Economic Committee examining tax, Social Security, and entrepreneurship issues, He holds an M.A. in economics from George Mason University in Virginia.] “Ten Reasons to Cut Farm Subsidies” This article appeared on Examiner.com on June 28, 2007, CATO http://www.cato.org/pub_display.php?pub_id=8459)

A major farm bill being debated in Congress gives policymakers a good opportunity to cut costly subsidy programs. Farm subsidies cost taxpayers up to $35 billion annually and tie farmers in a knot of unproductive regulations. Most farm programs originated in the Great Depression of the 1930s, but they make little sense in today's more prosperous and dynamic economy. Here are 10 reasons for Congress to reconsider the need for farm programs and to begin cutting them: » Farm subsidies transfer the earnings of average taxpaying families to well–off farm businesses. In 2005, the average income of farm households was $79,965, or 26 percent higher than the $63,344 average for all U.S. households. Farm subsidies are welfare for the well–to–do — even millionaire farmland owners such as David Rockefeller and Edgar Bronfman receive farm subsidies. » Although politicians love to discuss the plight of small farmers, the vast majority of farm subsidies go to the largest farms. In recent years, the biggest 10 percent of farm businesses have received 72 percent of farm subsidies, according to the Environmental Working Group.

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No Internal Lnx Small businesses are the backbone of the US economy – NOT ag Reuters, 07-20-08 (Nick Carey [] “Credit seen drying up for small business” http://uk.reuters.com/article/gc06/idUKN2038367520080720)

As losses mount at American banks and the pain of the credit crisis spreads from housing and finance to the broader economy, many small companies complain it is increasingly difficult to obtain loans. Tighter credit could not only help to push the United States into recession, but prolong the downturn as ideas for new businesses get stymied once entrepreneurs sit down with local bank managers, small business representatives warn. "In recent weeks we've seen banks becoming more cautious and the pace of lending has slowed considerably," said Weldon Gibson, a consultant at the Lamar University Small Business Development Center in Texas. "They are demanding higher credit scores and want more collateral before lending." Small businesses are a linchpin of the U.S. economy because they form the backbone of the country's jobs market and are crucial for job creation. According to U.S. Census Bureau data, in 2002 the United States had 112 million paid employees. About 56.4 million of them, or just more than 50 percent, worked at companies with fewer than 500 employees. In the wake of the U.S. housing crisis and the shock waves this has sent through the financial sector, evidence has mounted that, as well as facing the strains of a weak economy and the pain of high fuel costs, many small companies face a tough time getting loans.

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Internal Lnx Non-UQ US Economy is facing a recession now Xinhua, 07-20-08 (“No magic wand in sight as U.S. grapples with sinking economy” Xinhua News Agency. http://news.xinhuanet.com/english/2008-07/21/content_8739426.htm ) California-based IndyMac, which specialized in a type of mortgage that often required minimal documents from borrowers, became the third largest banking failure in U.S. history days ago, as a housing bust and credit crunch strain financial institutions. "I fear that we're sitting on a financial powder keg," said Senator Richard C. Shelby of Alabama, senior Republican on the upper house's Banking Committee. Fannie and Freddie's woes

"appeared to mark a new phase in the U.S. financial crisis, with fears of a contagion effect that could yet weigh more heavily on the global economy," noted a recent report in The Washington Post. Some analysts have called on the Federal Reserve and the Bush administration to take swift action to prevent the crisis from deteriorating, noting the tipping points of economic crises are almost always more about psychology than fundamentals, with panic over a bank's insolvency, for instance, potentially becoming a self-fulfilling prophecy. "I think the problem now is a general confidence crisis that is complicated by some global contagion that's now spreading," said Brian Bethune, a chief economist with Global Insight at Lexington, Massachusetts. This crisis of liquidity and capitalization of the government-sponsored

enterprises is an unfortunate and potentially dangerous turn of events in the current U.S. business cycle, he added."It must be defused swiftly and effectively, because failure to do so would risk a further meltdown of the housing and mortgage markets of proportions not seen since the Depression era," warned Bethune. The Bush administration has urged Congress to temporarily increase lines of credit to Fannie and Freddie and to let the government buy their stock. Meanwhile, the Federal Reserve has offered to let the companies draw emergency loans. But if investor jitters prevent them from being able to sell bonds to finance new mortgages, it could have far-reaching economic consequences, warns the U.S. media. Some investors are beginning to think the U.S. leaders are running out of the ammunition they have used to support the stock markets in past months. "Despite repeated intervention by the Fed and central banks and regulators world-wide, no one seems to be able to prevent further damage to banks and other financial institutions," said a Wall Street Journal report. Though new

government efforts to help Fannie and Freddie could temporarily give markets a boost, investors are coming to grips with the fact that the big rate cuts have been made, the market and the economy remain in trouble, and they may now have to tough it out, said the report. "I don't think the Fed can shake its magic wand and right everything in the capital markets," said Ethan Harris, chief U.S. economist at investment bankers Lehman Brothers. He believes that the Fed may wind up cutting rates by another half a percentage point, to 1.5 percent, but not until later this year or early next year. "They are trying to buy time for the economy to lick its wounds and recover," he was quoted as saying by The Wall Street Journal. Federal Reserve chief Ben Bernanke has warned that the U.S. economy continues to face

"numerous difficulties", including persistent strains in financial markets, declining house prices and rising costs of oil and food.

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No Mpx to Cutting Subsides Cutting farm subsidies wouldn’t hurt the ag industry. It would save the government millions Edwards, 2007(Chris Edwards [top expert on federal and state/local tax and budget issues. Before joining Cato in 2001, Edwards was senior economist on the congressional Joint Economic Committee examining tax, Social Security, and entrepreneurship issues, He holds an M.A. in economics from George Mason University in Virginia.] “Ten Reasons to Cut Farm Subsidies” This article appeared on Examiner.com on June 28, 2007, CATO http://www.cato.org/pub_display.php?pub_id=8459)

» If farm subsidies ended, U.S. agriculture would continue to thrive. Farms would adjust, planting different crops and diversifying their sources of income. A stronger and more innovative agriculture industry would emerge, as occurred in New Zealand after it repealed all its farm subsidies in 1984. » Farm households have more stable finawnces today and are better able to deal with a free market in agriculture than the past. Many farm households earn the bulk of their income from non–farm sources. Federal data shows that only 38 percent of farm households have farming as their primary occupation. » Substantial cuts to farm subsidies would save taxpayers money and reduce the federal budget deficit. Ongoing deficit spending on farm subsidies and other programs is causing large amounts of debt to be foisted on the next generation. In winning the congressional elections last year, Democrats portrayed themselves as reformers willing to take on special interests for the benefit of average families. This year's farm bill gives them a chance to prove it. They should end subsidies for well–off farmers, remove agricultural trade barriers to cut food costs for families and reduce the debt load being imposed on young Americans.