Against Foreign Aid

there are 500,000 homeless americans, why are we sending $200 billion abroad every year in foreign aid?

America Sends $200 Billion Abroad Every Year: the Case Against Foreign Aid

You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.

~Matthew 7:5

America is by far the most generous country in history.  Over the last decade we’ve given some $468 billion away—$2 trillion if you include the costs associated with defending our allies in Europe and East Asia.  Sadly, it’s all been for naught.

Foreign aid had done little to help the world’s poor.  Instead, most of it goes to countries that don’t need it, and the rest flows into the pockets of violent dictators.  Furthermore, we must remember that every dollar we send abroad is a dollar that could, and should have been used to help our own impoverished people.

It’s time we cut foreign aid and put America—and Americans—first.

A Brief Overview of America’s Foreign Aid Commitments

America Wasted $468 Billion on Foreign Aid in the Last Decade—$2 Trillion Including Military Support

Before getting into the argument, I’d like to take some time and provide a little context for you—how much does America spend on foreign aid, and where does it go?

According to the US Agency for International Development (USAID), America spent $468 billion on foreign aid over the last decade (years 2007-2016).  This averages out to $46.8 billion annually (obviously).

The figure includes both economic and military funding, but does not include America’s contribution to the United Nations and its affiliate organizations—which costs America an additional $8 billion annually—nor does it include direct military assistance in the form of permanent US garrisons.  Including these costs would bring the total to just over $2 trillion (more on that soon).

This is a lot of wasted money, but thankfully things are changing.

Since President Trump’s inauguration, US foreign aid payments have decreased significantly: in 2017 America spent $22 billion on economic aid, compared to $34 billion in 2016—a one-third reduction.

The cost of military foreign aid has not yet been calculated, but even if it’s identical to last year’s expenditures (it certainly won’t be higher), it will only bring the 2017 total up to $37 billion—far less than the $49 billion spent by Obama in 2016.  This is welcome news.

Where Do America’s Foreign Aid Funds Go?

Let’s take a closer look at America’s biggest foreign aid commitments.

israel is a wealthy, developed economy that doesn't need american foreign aid
Tel Aviv, Israel, is a rich coastal paradise—as is much of Israel. Israel doesn’t need America’s foreign aid money.

According to USAID, in 2017, the five biggest beneficiaries of US foreign aid were Iraq ($4.1 billion), Afghanistan ($3.9 billion), Israel ($3.1 billion), Egypt ($1.2 billion), and Kenya ($1.1 billion).

This may strike the reader as odd, given that many extremely poor countries don’t make the top of the list—places like Rwanda or Ethiopia, for example.  Neither do very large (and poor) countries like Bangladesh and Indonesia.

The oddities remain when looking at aid spending per person.  Israel tops the list, receiving $364 in foreign aid per Israeli citizen annually.  This is more than twice what America spends on the average Afghani ($148), and twenty-nine times what we spend on the average Egyptian ($12.5)—and it’s infinitely more than we spend on the average Indonesian.

Assuming the goal of foreign aid is to help people in needy countries, this seems like a bizarre misallocation of resources.

Remember, Israel is a modern nation with a fully-developed economy: the average Israeli is more than ten-times as rich as the average Egyptian, and sixty-seven times as wealthy as the average Afghani.  In fact, Israel’s GDP per person is roughly the same as that in rich European countries like Italy and Spain—it’s certainly not a poor backwater in need of American largess.

Clearly foreign aid has little to do with helping the world’s poor.

America Spends Over $150 Billion Annually On Foreign Bases & Defense

map showing the location of us foreign bases

In his book Base Nation: How U.S. Military Bases Abroad Harm America and the World, author David Vine reveals that America spends over $150 billion every year defending its allies by way of foreign garrisons.  That is, we station thousands of troops, vehicles, and aircraft in allied nations so as to guarantee their safety—all without any remuneration.

Essentially, America subsidizes her allies’ defense, allowing places like Germany to invest their money in lavish welfare states.  There is a good argument to be made that Europe is socialist because of America’s generosity (or Machiavellian ambitions, depending upon your philosophical bend).

The scale of America’s static military presence is beyond comprehension for most people.  And as The Nation reports, the relationship is both asymmetrical, and atavistic:

While there are no freestanding foreign bases permanently located in the United States, there are now around 800 US bases in foreign countries. Seventy years after World War II and 62 years after the Korean War, there are still 174 US “base sites” in Germany, 113 in Japan, and 83 in South Korea, according to the Pentagon.

Hundreds more dot the planet in around 80 countries, including Aruba and Australia, Bahrain and Bulgaria, Colombia, Kenya, and Qatar, among many other places. Although few Americans realize it, the United States likely has more bases in foreign lands than any other people, nation, or empire in history.

America’s foreign military presence is enormous, but it must be noted that the bulk of these bases are historical atavisms, ie. they have outlived their original purpose.  For example, the bases in Germany and Japan were established after America’s victory in World War II, and remained justified throughout the Cold War.  However, the USSR fell nearly three decades ago—the Red Menace is dead.

Ergo, what purpose do these bases now serve?  Is there a need for large-scale infantry deployments on the European continent?  Would these garrisons even be useful in the event of a modern war?

I’d say that most of America’s military presence in rich European nations could be summed up by Oscar Wilde’s wisdom-laden phrase:

the bureaucracy is expanding, to meet the needs of the expanding bureaucracy.

That is, America invests in infantry bases in Europe and Japan because that’s simply what it does.  Europe isn’t in grave danger of foreign conquest—and even if they were, there’s no reason to assume they couldn’t pick up the slack if they wanted.  Europe’s industrial and economic might is far greater than America’s (believe it or not).

If we (rightly) include in our foreign aid calculation the dollars America spends subsidizing our allies’ defense, then we can safely say that America has contributed over $2 trillion in foreign aid over the last decade.  This works out to $200 billion per year.

A final note before moving on: this figure doesn’t include the $250 million per day that the USA has spent fighting the War on Terror since 2011.  Including this would bring our figure up to over $3.5 trillion, although I think we’d be stretching it a bit by including this.

The Argument Against Foreign Aid

US foreign aid serves little purpose, and should be done away with immediately.  This is because foreign aid rarely does foreigners any good (often it just makes things worse), and the opportunity cost for American citizens is too high to sustain any longer.

1. Most Foreign Aid Flows to Countries that Don’t Need it

The most obvious argument against foreign aid is that most of it flows to people who don’t actually need it.  Consider that almost 10 percent of America’s official foreign aid dollars go to Israel—a technologically sophisticated, wealthy country.  Israel doesn’t need our money.

And for those who think that Israel needs our $3.1 billion in foreign aid because it’s in a hostile region, your must remember that we dole out money and weapons to said “hostile” nations like candy.  For example, we give Egypt $1.3 billion annually, Jordan gets $1 billion, the Gaza Strip and West Bank receives $726 million, Syria gets $240 million, and Iraq $510 million.  The total?  $3.78 billion.

If the goal is to maintain parity, this could be accomplished by giving out zero dollars annually, rather than giving each side over $3 billion in aid.

Likewise, the biggest beneficiaries of America’s military subsidies are Germany, Japan, and South Korea.  With the arguable exception of South Korea, these countries have the financial and industrial resources to defend themselves from their (non-existent) enemies.

2. Foreign Aid Often Does More Harm than Goodforeign aid infographic

Foreign aid isn’t really about helping people.  It’s about buying influence.  It’s an exercise in power projection.

Ideally, foreign aid is the carrot we dangle in front of donkey-brained dictators, and the threat of its retraction is the stick.  This makes sense in theory, but in practice things rarely work out as intended.

Consider the fact that we give $261 million every year to Zimbabwe, a country that executed or exiled over 500,000 white people since the black takeover under Robert Mugabe.  Did we retract the payments as punishment?

No.  So what’s the point?

All we’ve done is help an evil dictator carry out his genocide, and ensure he has enough money to retain control over his warlords.  Indirectly, American foreign aid contributed to the genocide of the Rhodesians (Zimbabwe and Zambia’s whites).

And of course, this same paradigm plays out again and again.  All throughout Africa warlords cling to power because America’s foreign aid dollars allow them to buy loyalty.

The Foundation for Economic Education notes a plethora of examples, including how President Mobutu of Zaire was able to turn foreign aid donations into a $10 billion personal fortune, or how Ethiopia’s Mengistu Haile Mariam used foreign aid money to forcibly resettle large swathes of the country.

Part of the reason foreign aid dollars rarely translate into political leverage is because the American public—and many soft-hearted politicians—see foreign aid as a form of charity.  This means that they’re loath to cut funding to brutal dictators, because they’re afraid of seeing pictures of starving children on the news.

Foreign aid commitments can rarely be withdrawn because of the “do gooder” lobby, and so it’s best to make no commitments in the first place.

3. Charity Starts at Home: Americans Deserve our Foreign Aid Dollars

America sends billions abroad every year, ostensibly to help care for the world’s poor.  Meanwhile, millions live in extreme poverty here at home.  We are hypocrites of Biblical proportions.

To begin with, there are over 500,000 chronically homeless people in the US.  They live on the streets, under bridges, in public parks.  And of these, nearly 50,000 of them are veterans, many of whom suffer from mental illnesses that prevent them from holding jobs.  Do they not deserve our help before someone in a far off land?

And what of America’s poor?  Right now nearly 23 million Americans are unemployed, many haven’t been able to find work in years.  They’ve been unemployed so long that the government no longer even records them as unemployed—it’s the great disappearing act of our age.

And let’s not forget about America’s growing poverty crisis—some 20.6 percent of Californians currently live in poverty, according to the US Census Bureau.  Likewise, income inequality in the state is now worse than in Mexico, Guatemala, and Russia.  Let’s not stand on pomp and circumstance and pretend that we don’t need our own foreign aid dollars.  America has plenty of slums, and tens of millions of poor people to care for.

Charity starts at home.  America should fix its own problems before purporting to solve the world’s.

America Must Cut its Foreign Aid Commitments

Perhaps the biggest obstacle in cutting America’s foreign aid funding is the “do-gooder” lobby.  The fact is that a great many people like foreign aid because it makes them feel good—people want to do the right thing.

So rather than debating the role of government in charity work, we’re probably better off fighting to reallocate the money domestically.  It’s hard to convince an ardent humanitarian that the government should be a faceless, impartial entity that’s unconcerned with human suffering—the argument falls on deaf ears.

Let’s compromise.

Instead of sending Israel $3.1 billion every year, we could invest that money in drug rehabilitation centers, or homeless shelters, or mental health clinics.  Let’s stop garrisoning rich countries like Germany and Japan at a cost of $150 billion every year, and instead use that money to improve our education system, and gets our veterans off the streets.

This way we can both be assured that we’re doing “the right thing” and that we’re acting in the national interest.


About Spencer P Morrison 160 Articles
J.D. B.A. in Ancient & Medieval History. Writer and independent intellectual, with a focus on applied philosophy, empirical history, and practical economics. Author of "Bobbins, Not Gold," Editor-In-Chief of the National Economics Editorial, and contributor to American Greatness. His work has appeared in publications including the Daily Caller, the American Thinker, and the Foundation for Economic Education.