Just before the Christmas break, more than 120 countries at the United Nations voted to condemn President Donald Trump and his decision to relocate the U.S. embassy to Jerusalem. Pakistan, the United Kingdom, Vietnam, South Africa, and Iraq each cast a ballot to urge the U.S. to end its recent recognition of Jerusalem as the capital of Israel. Only nine were against the resolution, while 35 abstained.
The move disappointed the U.S. and Israel, but Guatemala stood by them by announcing that it would shift its embassy to Jerusalem to show solidarity. Meanwhile, Ambassador Nikki Haley was blunt in her response to the widely favored motion: the U.S. will begin to take names.
This came one day after President Trump told reporters at the White House that the U.S. government would consider pulling funding and foreign aid to states that vote for the UN resolution. He said:
“They take hundreds of millions of dollars and even billions of dollars, and then they vote against us. Well, we’re watching those votes. Let them vote against us. We’ll save a lot. We don’t care.”
For years, administrations have attempted to bribe international leaders and purchase allies with foreign aid. Suffice to say, it has not worked, and it was about time a president considered ending annual pecuniary relief totaling billions of tax dollars. But why not take it one step further? Terminate all foreign assistance – even to America’s allies, like Israel.
$30 Billion in Foreign Aid
Following the Second World War, the U.S. government established its very first aid initiative. Then-Secretary of State George Marshall adopted a plan to offer substantial economic assistance to Europe following the war to enable nations to rebuild, stabilize the region, and boost the economy. Twenty years later, President John F. Kennedy signed the Foreign Assistance Act into law and started the United States Agency for International Development (USAID).
Only a handful of presidential candidates since then have suggested to slash or end foreign aid altogether. Former Representative Ron Paul (R-TX) was adamant in 1988, 2008, and 2012 that we eliminate these programs, while his son, Senator Rand Paul (R-KY), also espoused the same positions.
It is no secret that the nation is bleeding red ink by the minute. The U.S. is drowning in $20 trillion debt, $500 billion budget deficits, and $120 trillion in unfunded liabilities and expenditures. How can the nation afford to police the globe and maintain the rest of the world’s finances when Washington is unable to balance the books?
Yes, foreign assistance accounts for a fraction of a percent of the annual budget. According to official figures from USAID, the U.S. provided approximately $30 billion last year in economic and military assistance to the Middle East, North Africa, East Asia, and sub-Saharan Africa. This will spike to $38 billion for 2017.
And these are only conservative estimates. The non-partisan Congressional Research Service (CRS) pegged annual foreign aid at $55 billion. Moreover, depending on the administration and the negotiations between diplomats, these numbers fluctuate every year – in 2015, international relief topped $35 billion.
That said, every penny counts if your objective is to shrink the debt and deficit.
Global Stability or Unnecessary Expenditure?
There are many reasons experts pontificate on the importance of foreign help: national security, a moral imperative, strategic maneuvering, and regional stability. But, in today’s era, does global support really achieve any of the aforementioned?
Let’s assess these reasons one by one.
When it comes to national security, there isn’t a day that goes by that doesn’t see some entity working against the interests of America. It is regularly reported that the governments of Iran, Saudi Arabia, Sudan, and Turkey allocate resources to terrorist groups that oppose the U.S. and Israel.
A moral imperative? This is usually how foreign aid works: the government takes money from poor people in prosperous countries and then transfers it to corrupt public officials in impoverished nations. This is iniquitous, to say the least.
Strategic wheeling and dealing has not been successful. The UN vote proved that. No matter how much money you extend to foreign adversaries, they will not adhere to your whims. During talks between leaders and diplomats, they may smile, shake hands, and take your money, but once you exit the room, they will work against you.
Legendary economist Ludwig von Mises wrote in “Planning for Freedom”:
“The United States, they think, is aiding them because its people have a bad conscience. They themselves pocket this bribe but their sympathies go to the socialist system. The American subsidies make it possible for their governments to conceal partially the disastrous effects of the various socialist measures they have adopted.”
The Middle East is a region that has been destabilized by outsiders meddling in their internal affairs, particularly by neoconservatives and military Keynesians. Invading Iraq, nation-building in Afghanistan, changing the regime of Libya, bombing Syria, and threatening Iran have all been failed endeavors. Attempting to purchase stability for the region is merely flushing money down the drain.
Desire stability? Export American principles like freedom, free markets, and free trade.
Foreign Aid Does Not Cure Poverty
Can foreign aid eviscerate extreme poverty in Africa, Asia, and South America? That’s what politicians, celebrities, and heads of aid agencies routinely shriek all year long: All western governments need to do is just spend more money.
Over the last 40 years, the U.S. government has given $500 billion in aid to Africa alone. Is the continent any better off? Millions still reside in slums, suffer from curable diseases, and starve to death – but at least the despots live in mansions and drive luxury vehicles.
In reality, foreign aid rarely goes to the impecunious because the assistance, whether money or food, is stolen by corrupt politicians and military leaders. The money is hidden in Swiss bank accounts, while the food is sold in marketplaces to some shop owned by an official’s cousin or brother.
According to the World Bank, there is an unintended consequence to foreign aid: it diminishes the quality of governance. The billions of dollars given to weak leaders only enable and bolsters these presidents and prime ministers to perpetuate their odious behaviors.
Unfortunately, the U.S. government has not learned its lessons from the past. Unless Trump puts a stop to it, Washington will ship tens of billions of your tax dollars for the next several years to small, ethically contaminated third-world countries. It will be the status quo: impoverished Americans from Buffalo County and Holmes County will be forced to subsidize the extravagant and opulent lives of kleptocrats in Nigeria, Ghana, Angola, and Kenya. As long as globalists and bureaucrats feel good about themselves, you can bet that foreign aid will persist. That is, if President Trump can’t abolish this policy.
Do you support foreign aid? Give us a call on our LIVE Author chat line to ask us a question or tell us what you think!
Andrew has written extensively on economics, business, and political subjects for the last decade. He also writes about economics at Economic Collapse News and commodities at EarnForex.com. He is the author of "The War on Cash." You can learn more at AndrewMoran.net.
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