Certainly, President Obama’s proposed budget is a long ways from passing, but as one commentator put it, “it will be historic even if only a fraction of it is passed into law.” (See it at www.whitehouse.gov/omb/)

It’s difficult to assess the impact of the size of these deficits on long-term capital creation and access, the inflationary pressures that will be created by such a massive devaluation of the dollar, or the increase in commodity prices that will result. Political perspective and objectives will determine how one views most of the proposals, but one thing that can be said with 100% certainty is that we’re looking at an unprecedented shift in the direction of the country.

This paradigm shift will inevitably lead to some major shifts in agriculture as well. Setting aside the long-term impacts, either scenario should be bullish for agriculture, especially for those with land assets that are paid for. Those who are leveraged will have to determine if this is the 1930s or the 1980s – the two time-reference points everyone is referring-to and what those impacts will be.

• Personally, I don’t believe that the comparisons to the 1930s are justified. Whether one looks at unemployment, interest rates, inflation, or just about any other economic index, there’s very little similarity to the 1930s. That is, with the exception of the erosion in consumer confidence.
  
  
• Meanwhile, the comparisons to the 1980s seem to be equally invalid, again with the exception of the erosion in consumer confidence. After all, the situation and causes for today’s problems seem to be very different from those of the 1980s. Will today’s changes create the economic environment found in the late ’80s and ’90s or the early ’80s? The answer you derive will greatly influence how you want to position your operation for the future.

As the magnitude of the change being proposed is without precedent, one would expect the results of this shift to be unprecedented in the long term, as well. Ultimately, the outcome for agriculture will be tied to overall economic results, but in the short term, I can’t think of a better industry than agriculture to be involved in at this time.