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Redistributing U.S. wealth globally is socialism and doesn’t work; End foreign aid now

By Grace Vuoto

As America heads towards bankruptcy, Republicans and Democrats should be looking to slice one part of the budget whole hog: foreign aid. We cannot take care of our own citizens, let alone giving away money to help citizens of other nations. This is a luxury we can no longer afford.


The summer of 2011 has been marked mostly with an increasing awareness on Capitol Hill and around the country that America’s skyrocketing debt and deficit must be tamed. Republicans are insisting that in order to lift the current debt ceiling they want the White House to sanction massive spending cuts, especially to entitlement programs. Democrats have in turn been scaring voters with dire scenarios of draconian cuts to social programs. They generally prefer reductions in military spending and tax increases on the wealthy as a means of attempting to curb the $1.5 trillion budget deficit. Yet, both sides can begin by taking a hard look at foreign aid and drawing a line right through all of it.

The American people do not want their tax dollars diverted to other nations. A March Bloomberg National Poll found that 70 percent of Americans think cutting foreign aid will make a significant difference in taming the deficit. In 2009, America was the world’s largest bilateral donor, according to the latest comprehensive statistics compiled by USAID, the federal agency that disburses foreign assistance, in an annual report for Congress titled “U.S. Overseas Loans and Grants.” Approximately $34 billion went to economic assistance and $11 billion for military assistance, said the report. This is a total of $45 billion. The top recipients of these funds were Afghanistan, Iraq, Israel, Egypt, Sudan and Pakistan.

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While those nations have been much in the news as the world’s leading hot spots where one might think some assistance is necessary, most Americans would probably be shocked to note that in total, 184 countries obtained economic assistance from America. The report does not state that there are 192 nations in the world, so this really means that a simpler way of explaining how many nations got cash is to write that only eight countries in the world did not get a juicy check from Uncle Sam.

America is disbursing money like Santa Clause, even to rich nations and to our leading antagonists. For example, 49 recipients of economic aid were in Europe and Eurasia, including Ukraine, Georgia, Serbia and Russia. Yes, Russia of Medvedev and Putin fame, received economic help to the tune of $1.2 billion. In addition, 36 Asian nations received funds. Even very prosperous and stable countries such as Canada, Poland, the Bahamas, New Zealand and Norway were given an Americana helping hand.

In order to grasp how much total cash our nation is giving away, we can contrast $45 billion to the total Gross Domestic Product (GDP) of individual countries. In a nutshell, America doles out more money in its foreign aid budget than the GDP of any one of 118 nations, according to statistics on GDP for 2010 compiled by the International Monetary Fund. For example, Bulgaria’s GDP is $44.8 billion, Lebanon’s is $39.1 billion, Latvia’s is $23.3 billion, Afghanistan’s is $16.6 billion, Bosnia-Herzegovina’s is $16.2 billion, and Zambia’s is $15.6 billion. Americans distribute more foreign aid than the entire GDP of countries such as Jamaica, Iceland, Albania, Macedonia, Georgia, Armenia and the Bahamas, to name only a few. Look at it this way, the next time an American vacations in Jamaica or Bahamas, he or she can consider that our nation is giving away more money than that entire island country produces. How’s that for spiking the tequila?

And such statistics are even more upsetting when we consider the total GDP of American states. In essence, the entire GDP of one state such as Alaska, South Dakota, Wyoming, Montana, North Dakota or Vermont is being given to foreigners. Every single citizen in one of these American states in the Union is working every day, month and year entirely to send their money all over the world. Foreign aid would not appear to be so benign if Americans were made aware of this.

Foreign aid is in essence a form of international socialism; it is redistributing money from a rich nation to other countries. It is blatantly unconstitutional. The government does not have the right to compel citizens to commit acts of charity. In fact, this was clearly understood in the first century of the nation’s founding where there was no money allocated to foreign assistance: the very thought would have seemed a form of madness.

It was only after World War I and World War II that Americans began to invest abroad in the hopes of winning and maintaining allies. Foreign aid became entrenched during the Kennedy years, especially in 1961 with the passage of the Foreign Assistance Act and the creation of USAID. Since then, American leaders generally maintain that foreign aid is in America’s self-interest as it cements alliances, as well as being humanitarian.

This is a fallacious argument. We have seen repeatedly that foreign aid results in massive bureaucracies both in America and abroad, provides ample opportunity for waste, mismanagement and corruption and does very little to consolidate alliances or win hearts and minds. In fact, the opposite tends to happen: U.S. aid is perceived by foreign nationalists as a means of meddling in their internal affairs, undermining sovereignty and corroding its body politic. It is more often resented and used as fodder for anti-Americanism than it is appreciated, as seen by large recipients of foreign aid, such as leaders in Afghanistan and Pakistan. The very politicians who are lining their pockets with American dollars are quick to spew anti-American slogans and to be uncooperative, precisely to demonstrate their nationalist credentials. Exhibit A is Afghan President Hamid Karzai. Our entire endeavor is counterproductive.

Mostly, however, foreign aid does not result in long-term economic development. "Traditional development assistance does not work, at least not if the goal is to foster sustainable development in poor countries,"ť states a March 1 report for the Heritage Foundation by James Roberts titled “Not All Foreign Aid is Equal.”ť “Traditional efforts, such as those administered by USAID, dole out billions of dollars each year despite evidence that these policies virtually ensure that economic growth will be minimal or unsustainable,” states Mr. Roberts.

Regardless of the effects abroad, it is clear that the domestic economic and financial crisis we are in no longer permits this indulgent form of foreign experimentation. Americans are among the most charitable citizens in the world who fund many worthy foreign causes in private endeavors: private foreign charity is astounding, regularly at $16 billion per year. Hence, we do not need the government and its burgeoning bureaucracy to be sticking its fingers into more muddy pies. Nor do we need the government to help us care for those in need abroad.

Americans should demand the immediate end to all foreign aid and a constitutional amendment declaring the practice to be a violation of the social compact erected by our Founding Fathers. In fact, foreign aid is in breach of the Constitution and the founding principle that all taxation be based on representation and accountability; when funds are sent overseas accountability is difficult if not impossible.

The new mantra is one our Founding Fathers would applaud: American tax dollars for American citizens, no excuses and no exceptions.

Dr. Grace Vuoto is the Executive Director of the Edmund Burke Institute for American Renewal.

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