It’s Time To Stop the Transfer of American Wealth to Other Nations
The United States is deeply in debt. As of February 27, 2014, total federal debt amounted to $17.4 trillion dollars. The figure topped $17 trillion in October after a then unprecedented $328 billion increase. Since hitting the $17 trillion mark, the Obama administration has added an additional $350 billion to the debt since then.
For more perspective on the growth of federal debt, on January 20, 2009, the day of President Obama’s first inauguration, the Treasury Department reports that total outstanding debt was $10.6 trillion.
Anyway you cut it, $10.6 trillion of debt is an obnoxious sum. Obama himself, back when he was a Senator, thought the level of federal debt had reached an unacceptable amount. Back then, in 2008, the Senator called the debt under his predecessor, George W. Bush, “irresponsible” and “unpatriotic.” The Senator was particularly incensed over the scale of increase in the federal debt under Bush.
“The problem is, is that the way Bush has done it over the last eight years is to take out a credit card from the Bank of China in the name of our children, driving up our national debt from $5 trillion for the first 42 presidents — #43 added $4 trillion by his lonesome, so that we now have over $9 trillion of debt that we are going to have to pay back — $30,000 for every man, woman and child,” said then-Senator Obama.
Despite his rhetoric in 2008, since he was first inaugurated, President Obama has overseen an ever-accelerating expansion of federal debt. Where the Bush administration presided over a $4 billion increase over two terms in office, with still two years to go the Obama administration has presided over an increase in the debt of nearly $7 trillion.
It’s time for this unbelievable destruction of American wealth to stop. An easy place to start is with foreign aid, dollars delivered to countries all around the world that amount to nothing more than a transfer of wealth from American citizens to foreign states.
The economic argument made by progressives and other statists against cutting foreign aid is that it amounts to only a small part of the federal budget. This is true, but it doesn’t mean that cutting foreign aid wouldn’t be a good place to start exercising some fiscal responsibility on behalf of the American people.
Foreign aid spending hovers around $50 billion per year. It was $49.1 billion in 2008. In 2009 it was $44.9 billion. In 2010 it was $53 billion. For 2011 it was approximately $50 billion. For 2012 it was $54.5 billion.
In total, the spend on US military and economic assistance for foreign countries was over $250 billion.
What nations get this lucrative handout?
For 2012, according to USAID, the top five recipients of foreign aid were Afghanistan, Israel, Egypt, Iraq and Jordan. The top recipient, Afghanistan, received nearly $10 billion in disbursements.
It is doubtful that this money was effectively spent. Afghan president Hamid Karzai can’t wait to get rid of us. “You remember a few years ago I was saying thank you to the foreigners for their help; every minute we were thanking them. Now I have stopped saying that…,” Karzai remarked in 2011. Earlier, in a closed door meeting in 2010 from which some details were leaked, Karzai allegedly said, “if I come under foreign pressure, I might join the Taliban.”
Other recipients of our foreign aid largesse probably don’t really need our help. Consider Israel, for example. The U.S. gave $6.2 billion in aid to Israel in 2012. But, arguably, Israel is doing better managing its budget than we are. Israel’s government debt to GDP ratio is 79.5 percent. For the United States, that figure is 101.6 percent. Moreover, in 2012, Israel was the only Western nation that was able to reduce its debt to GDP ratio, according to Ynetnews. Moreover, at that time, Israel was the only Western country to see its credit rating increase in the four years beginning with 2008.
While U.S. debt is ratcheting out of control, the more fiscally responsible government of Israel expects to be able to continue reducing its national debt. In January, Haaretz reported that the Israel government’s budget deficit was lower than expected. As a result, the paper reported, government officials indicated the country would be able to take addition steps to reduce the nation’s debt.
Now, who wouldn’t like to hear that news coming out of Washington?
Other recipients of American foreign aid probably shouldn’t get our money. Over the last several years, for instance, the U.S. has provided almost $50 million in aid to Belarus. Under president-for-life Alexander Lukashenko, Belarus has been called “Europe’s last dictatorship,” and according to ForeignAssistance.gov, foreign aid moneys earmarked for the country are for “efforts that support the Belarusian people in establishing a government that respects their democratic rights and fundamental freedoms.”
But how can Americans know that their money is not actually getting into the hands of the Lukashenko regime and its allies, especially since Americans have been duped in the past? Consider, for example, the Iraqi oil for food program. Monies from this Clinton-era boondoggle ended up supporting the regime of Saddam Hussein. According to the Heritage Foundation, “The U.S. General Accounting Office (GAO) estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues by exploiting the Oil-for-Food program, including $5.7 billion from oil smuggling and $4.4 billion in ‘illicit surcharges on oil sales and after-sales charges on suppliers.’ The scale of the fraud was far more extensive than the GAO had previously estimated.”
Regardless of the outcomes of foreign aid in the nations it is given to, the question of whether the American foreign aid program should continue comes down to two more fundamental points.
First, over the past two administrations, and especially during the Obama administration, federal debt has grown at an ever more unsustainable pace, undermining the well-being of every American citizen. We can’t afford to keep up our profligate spending.
Second, monies given to other nations through foreign aid programs first must be taken from taxpayers. It amounts to a vast international wealth transfer program from Americans to foreign nations. It’s unfair to Americans who have seen their own economic wellbeing substantially reduced over the last several years to see money they badly need taken from them and sent overseas.
Fleecing Americans to fund other nations is morally questionable at best, and is fiscally no longer sustainable. Sure, foreign aid is, in the context of gargantuan federal outlays, only a drop in the bucket, but fiscal responsibility has to start somewhere.
Cutting off foreign aid could save as much as $250 billion over the next five years. Maybe more. For perspective, this is nearly as much as the entire national government of Canada spent in 2010 according to the Treasury Board of Canada Secretariat.
It’s time our federal government stop plundering the wealth of the nation and return instead to protecting the interests of its own citizens.
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