The Agricultural Adjustment Act caused a lot of problems. It was something that shouldn’t have been passed.

First of all there were the economical issues. There is something called laissez-faire economics. The idea is that an economy will eventually balance itself out naturally if left alone. If there is a surplus somewhere, then eventually it will balance itself out. The AAA completely disregarded this theory that had so far worked for our country and decided that the government knew better than the “invisible hand.” In laissez-faire economics, the problem of having too much food and low food prices would have been solved if things were left alone. Prices are a vital role in economics. They are indicators of when it is a good time to get into a certain market or to get out of it. If left to laissez-faire economics, the farmers would have seen that there was no money in farming and they would have gotten into something different. That would have boosted the demand on food and driven the prices up. Instead, under the AAA, the government paid farmers to stay in an industry that was failing and created an unnecessary dependency on the government to regulate the prices.

Next we should understand that the farmers were being paid by tax money collected from food processors. It was only them that were being taxed, and eventually the AAA was ruled unconstitutional on grounds that a minority was being taxed to benefit another minority. The real problem was that the government paid out more money than it collected from taxes. In the three years that the original AAA was in effect, it put the government in debt for 134 million dollars. Back then, that was a lot more money than it represents today.

Last, after looking at the intentions of the AAA, nothing was accomplished. The price food never went back up until after WWII. By then the depression was over, and no credit can be given to the AAA for ending it.