Starter - State Econ Da

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

States Econ DAs States Econ DAs...................................................................................................................................................................1 Iowa Econ Shell (1/3)...........................................................................................................................................................2 Iowa Econ Shell (2/3)...........................................................................................................................................................3 Iowa Econ Shell (3/3)...........................................................................................................................................................4 UQ: Iowa Econ Strong..........................................................................................................................................................5 Lnx: Iowa..............................................................................................................................................................................6 Lnx: Corn Ethanol Key 2 Iowa.............................................................................................................................................7 Lnx: Corn Ethanol Key 2 Iowa.............................................................................................................................................8 Lnx: Corn Ethanol Key 2 Iowa.............................................................................................................................................9 Lnx: CAFOs Key to Iowa...................................................................................................................................................10 Internal Lnx: Iowa dependent on Ag...................................................................................................................................11 Brink: Ag Collapse..............................................................................................................................................................12 Brink: Ag Collapse..............................................................................................................................................................13 Internal Lnx: US Econ depends on Ag...............................................................................................................................14 Internal Lnx: US Econ Key 2 Global Econ........................................................................................................................15 Internal Lnx UQ: US Econ Ok...........................................................................................................................................16 Non-UQ: Econ Low Now...................................................................................................................................................17 Iowa No Lnx.......................................................................................................................................................................18 Turn: Iowa & Ethanol.........................................................................................................................................................19 No Internal Lnx...................................................................................................................................................................20

Arizona Debate Institute 2008

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Pre-Institute Evidence

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

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."

Arizona Debate Institute 2008

4

Pre-Institute Evidence

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

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

State Econ DA

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

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.

Arizona Debate Institute 2008

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Pre-Institute Evidence

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:

Arizona Debate Institute 2008

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Pre-Institute Evidence

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

12

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.

Arizona Debate Institute 2008

13

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."

Arizona Debate Institute 2008

14

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

15 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."

Arizona Debate Institute 2008

16

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

17

Pre-Institute Evidence

State Econ DA

Non-UQ: 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.

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.

Arizona Debate Institute 2008

18

Pre-Institute Evidence

State Econ DA

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.

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.

Arizona Debate Institute 2008

19

Pre-Institute Evidence

State Econ DA

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.

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.

Arizona Debate Institute 2008

20

Pre-Institute Evidence

State Econ DA

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.