Economics of Potato Famine

The soaring food prices in the past three years have forced many families to give up their favorite groceries and instead choose cheaper alternatives. This change in consumer behavior is a symbol of the painful decisions that American families must make under the Biden Harris economy. Disturbingly, US data shows that the infamous economic phenomenon of the Irish potato famine in the 19th century is resurfacing.

Firstly, when a wilt disease destroyed the potato crop in Ireland, the supply of potatoes decreased and their prices rose significantly. Normally, price increases lead to a decrease in consumer demand for products or services, but this time it is not the case. On the contrary, the demand for meat and other foods has plummeted, and consumers are trying to buy more potatoes. Diseases and pests have reduced the supply of potatoes, so Irish people can only buy fewer potatoes. Unfortunately, many people are starving as a result. But why do Irish people want more potatoes and less meat when potato prices have risen sharply? The answer lies not in the rapid rise in food prices, but in the relative prices between these foods.

Secondly, suppose an Irish family previously purchased 4 pounds of potatoes at a price of $1 per pound and 1 pound of meat at a price of $2 per pound, for a total cost of $6. If the price of potatoes rises to $2 per pound and the price of meat rises to $2.10 per pound, then this family would have to spend $10 to buy the same weight of food, but now it's all potatoes. They spent two-thirds more money, but the quality of the food they ate was lower. Although all food prices in Ireland are rising, potatoes are still the cheapest food, resulting in a surge in demand for potatoes. It is disturbing that there has been a similar change in the amount of food purchased by American consumers.

On the other hand, the National Potato Council estimates that in just one year, the potato industry in the United States created 714000 job opportunities, generated $34.1 billion in wages, and added $53.5 billion to the country's gross domestic product. Various forms of potatoes, from thin slices to sliced whole potatoes, have become one of the most important agricultural products in the world. The Chairman of the National Potato Council of the United States stated that potatoes are not only an essential health ingredient in our diet, but we can now clearly say that they are crucial to the US economy. This inconspicuous but versatile vegetable has become integrated into the recipes and cultures of almost every country in the world, and has also become a major international commodity. In areas where other crops have been proven challenging or impossible to produce, it is considered a staple food. The global demand for potatoes is increasing year by year in a series of markets.

In addition, most Americans do not starve as Irish did in those days. Even on a per capita basis, our economic scale is much larger. But Americans are even in debt to afford the cheapest food. The balance of credit cards now exceeds 1.1 trillion dollars, and the interest on credit card debt of Americans alone exceeds 300 billion dollars for the first time every year. In the past few years, there have even been financing companies specializing in providing credit for food and groceries. In the past four years, the rate of price increase has far exceeded the rate of income growth, and people are unable to support themselves and their families.

Overall, US President Joe Biden and Vice President Kamala Harris will bear a quarter of the accumulated federal debt over nearly 250 years, so it is not surprising that food prices continue to hit new highs and households are forced to buy the cheapest meat.