- Real Solutions for the Economy

Real Solutions for the Economy - Stop Foreign Aid

Written by Art Thompson

Thursday, 06 November 2008 09:30

Part 5 in a multipart series examing solutions for our ailing economy, presented by Art Thompson, CEO of The John Birch Society.

Since the United States is sustaining a deficit which increases daily, it makes no sense to send foreign aid to approximately 150 countries, especially when far too much of this aid ends up in the bank accounts of the leaders of the countries that receive the aid.

Most citizens understand this. So why does it continue?

The issue is not as clear cut as it would seem. From a principled view, it is simple. But most have taken their eyes off the principles because the issue is awash in the sea of countries, international agencies, and programs we finance that are as confounding as they are vast.

There are actually three principles at play in the foreign-aid argument:

Government should not take money from one to give to another, whether it is at home or abroad. If done by anyone but government, it would be called theft. Government cannot do anything that the people do not empower them to do out of their own God-given rights. Stealing is not one of them.
Government will always make the task of providing humanitarian aid more expensive, and often will provide the means for building more government power abroad in the process.
The flow of capital out of the country will always lower the standard of living of the average American, even if it is not apparent at the time. Why? If kept at home, that capital would be invested in new business, new infrastructure, new products and so forth, leading to the creation of more wealth and more jobs for more people. We give up these things as our "opportunity cost" when the government transfers money overseas as foreign aid.

Foreign aid is not simply giving money to other nations. It includes, but is not limited to, the International Monetary Fund, The World Bank, the Export-Import Bank, other loans, and a staggering number of United Nations agencies besides the annual dues we pay to the UN.

Of the approximately 150 countries we aid, included are communist countries pretending to reform so the American taxpayer will acquiesce to the gifts; perfect example: Russia within the last several years. We are spending $15 billion over five years primarily in Ethiopia, Uganda, and Kenya to wipe out AIDS. That costs us a billion in each country per year.

According to official figures, we send well over $30 billion overseas each year [Official Report - PDF Download]. This is not counting many of the aforementioned agencies, nor does it count food aid. Nor does it include indirect aid of forgiving debt incurred through loans by third world countries.

It is important not to forget our military presence in over 150 countries which is a form of foreign aid:

It provides armed forces for a government incapable of defending itself or paying for adequate defense. In some cases, against the will of the people, which often leads to growing anti-Americanism.
Money flows into the host nations’ economies by America’s contracting for local services, such as food, water, electricity, and basic commodities. The same applies for monies spent by our service personnel on and off base for creature comforts and entertainment.

The bottom line: We simply cannot arrive at a figure for annual foreign aid. There are probably think tanks who may begin to know the answer, but it is far too complicated a process, involving too many programs, agencies, and all manner of subterfuge by our government to get past in order to tally it all up.

Like so many things, foreign aid is always sold as a solution to some crisis, humanitarian or security, to get people to support it. And trying to stop it, unless the majority of Americans force the principles of not transferring wealth to others, is difficult.

Direct foreign aid alone is a problem due to the fact that there are blocs of American citizens who have favorite countries they wish to see receive money. This is due to ancestry, religious preferences, or friendly feelings for past alliances in major conflicts. And, it is so much easier to have government do it than to dig into their own pockets to send money abroad.

While it is a difficult thing to demonstrate, most of our military foreign aid is a result of two things:

Subsidizing our own military manufacturers, and
Military aid often counters our financing, as we do business with, and/or in some capacity aid the enemy of our friend.

This is particularly true of Israel. If we stopped helping, arming and training Israel's enemies, and if we became energy independent and stopped paying billions for oil each year to Israel's enemies, Israel's security would be much improved. She could more than stand by her self. A similar improvement could be made in many parts of the world.

So, on a principled basis, if we stopped all foreign aid, we would not have to help even our best friends through government largess.

“Time out,” you say; “What about the threat of Russia and China?”

And with this question, you open up another aspect of foreign aid that is not considered to be foreign aid but it is: Most Favored Nation status for trade.

By so declaring a country, even communist countries like China to be most favored, we allow them a privileged status for trading with us. This, over time, has allowed them to become an industrial powerhouse, threatening all of Asia and the Pacific.

The same applies to Russia. Our own industrialists, more concerned about money than principle, have gone into Russia and developed her infrastructure, her industry, and her oil. Actually, this has always been going on, but since the so-called collapse of communism, it has reached gigantic proportions.

And the development of her oil industry is now playing a very large role in the geopolitics of Russian influence on Europe due to the growing dependency on that oil.

American firms, American loans, and American expertise have given Russia the ability to mount belligerant military and political challenges. It happened in the past as early as the 1920s and it continues to happen today.

The bottom line is that in both cases, China and Russia would have been next to nothing without American assistance, and would rapidly deteriorate without it.

Foreign aid, in any form, is a moral decision. If people need help, it should be done privately, through charitable organizations such as religious organizations, typically the largest and most effective charities, the Salvation Army, and a multitude of other humanitarian groups. And, when it is privately donated and managed, the aid gets to the individuals in need. If the need is there, American citizens always rise to the occasion. American citizens, by a large margin, are the most generous people on the planet.

If we allow government to get involved, as we have seen demonstrated time after time, the aid seems to benefit the few and can end up in private bank accounts. In some cases, foreign aid, and food aid, has been used to prop up petty dictators. This has not endeared us to their citizens and has led some of these nations to rise up and embrace our enemies as a result, some to the point of fighting our armed forces in the process.

We can go on for pages to demonstrate that foreign aid is detrimental to an innocent country and/or how our aid is offset to one, by our aid to another.

The principle remains ― it is wrong for our government to take money from our citizens and give it to another country ― with the possible exception of during a war properly declared by Congress, to directly assist our fighting forces in achieving victory.

One of the key words used in the founding of The John Birch Society by Robert Welch was the word responsibility. It is used in our motto: Less government, more responsibility, and with God’s help, a better world.

The word responsibility embodies within it the meaning of making a moral decision to do what is right regardless of the consequences.

The John Birch Society is not isolationist. Nor are we against trade. What we are against is foreign aid and trading and building the manufacturing base of our sworn enemies. Especially when those enemies will not allow private enterprise as we understand it.

The payout of billions of dollars each year, and particularly now when we need to keep our capital at home to build our own economy, does not make economic sense. You cannot have a continual drain of capital out of the country and expect the economy to recover quickly.

There will always be well-meaning arguments for foreign aid, and many times it will tug at the heartstrings of good people, but good people can always be counted upon to do the right thing and help private humanitarian organizations to do good work.

Private charity will always cost less than government charity and it will go to those needing it, not to the foreign governments.

Stopping foreign aid in all its forms makes good sense.