"Private capitalism makes a steam engine; State capitalism makes pyramids." ~ Frank Chodorov
Obama Doubles Aid To Dependent Dictators
Exclusive to STR
On December 16, 2009, to commemorate the anniversary of the Boston Tea Party, President Obama signed the omnibus bill which includes H.R. 3081. This stroke of a pen raised US foreign aid to $48.764 billion. Official US foreign aid in 2006 totaled less than $23 billion . . . and that was a sharp rise from pre-Bushian times.
This official, or more precisely the “on-budget” foreign aid, is only the tip of the iceberg. It doesn't count direct Federal Reserve bailouts of bank loans to dictators. These have been going on since 1980, when a young Congressman named Ron Paul publicized a $120 million bailout of a loan to the Sudanese dictator to fund extermination of undesirables (yes, the Darfur massacres have been going on that long). The Fed responded quickly to Paul's complaint . . . they ceased to publish the figures on “monetizing” foreign debt.
Moving even farther through the looking glass, we come to the subprime financiers of dictator debt: the IMF and the World Bank. They operate by selling bonds, then “loaning” the money to the world's dictators, who of course never repay the loans. The World Bank alone “loaned” out almost $50 billion last year. Some people might think there was a long-term problem with this sort of financial operation. But those are the same silly people who didn't believe in Fannie Mae or Freddie Mac.
Then we get to the serious money: US military operations and assistance programs. The counter at costofwar.com says that the Iraq and Afghan occupations have cost about $946 billion. Costofwar.com tracks only the bare appropriations, using Congressional Research Office figures.
Economist Joseph Stiglitz attempts to count the cost of propping up the Sunni tribal leaders and Kabul warlords more accurately, including such expenses as disabled veterans’ long-term care, the higher oil prices (remember, oil was $25 a barrel before 2003), etc. His book last year was titled “The Three Trillion Dollar War.” The book came out before Obama escalated the Afghan war with $30 billion+ worth of new troops and “contractors,” expanded our use of Skynet robots into Pakistan and Yemen, etc. It is near-certain that three trillion will turn out to be an underestimate.
And of course while Iraq and Afghanistan dominate the news, the US military is leafblowering money at every evil regime in the world. Every year Parade magazine does a “20 worst dictators” list, and every year most or all of them are major US aid recipients.
Borrowing an Empire
The amazing thing about the US foreign aid empire is that much of it is currently borrowed from foreign taxpayers, as the US is $12.1 trillion in debt (not counting Social Security, Medicare, or prescription drug benefit obligations. The head of the Dallas Fed took a wild guess at the real total debt: he thinks it's around $100 trillion.)
Chinese taxpayers alone have put up $800 billion. Investors, students of government, and especially Chinese taxpayers should ask themselves “Why”? Why “invest” in the US government's subsidies to Afghan warlords, instead of just letting China's economy grow? Obviously there is some cozy relationship between US and Chinese politicians which benefits the taxpayers of neither country.
Where Does It All Go?
Past US foreign aid has gone to Idi Amin, Julius Nyerere, Joseph Stalin, Fidel Castro, and Pol Pot (even after Pol Pot killed 25% of Cambodia's population). We also gave money to North Vietnam, helped fund the Taliban government of Afghanistan, gave those nuclear reactors to North Korea, and back in the day helped the Pakistani spy agency ISI build up a real gung-ho guy named Osama Bin Laden. And of course it was also the ISI which made the Taliban powerful enough to take Afghanistan in the first place.
So most of the threats used to justify the US overseas empire since 1945 were created by our foreign aid in the first place. Yes, we got rid of Hitler, but then we funded a hundred little Hitlers to replace him. Right now our aid is going to prop up Afghan warlords, the North Korean monsters, the nuclear forces of Pakistan, etc. It's a good bet that when Parade's dictator list comes out at the end of 2010, we'll be funding the worst of the worst . . . again.
And of course a lot of our money goes to fund both sides in the ongoing Philistia controversy (which has only been going on since 1,000 BC or so). Why fund both sides? Why fund either side? Without our money, the weapons would be smaller, the wars would have to come out of the slush funds of the local politicians, and there wouldn't be any of these crazy “peace plans” like the current rage to build a wall around each individual Palestinian. (Although I have to admit, future archaeologists are going to love that project).
Aid policy has been justified by saying that dictators just need a few bucks till payday. Then they'll straighten out, give up genocide, Swiss accounts, etc. But just like your brother-in-law that keeps skipping his AA meetings, all this money really does is let the dictators keep their genocide habit going. If their money comes from the US, why bother with the messy annoyances of having to allow a domestic middle class, trade, freedom, etc.? Much easier to just live off the aid checks and shoot anyone who mouths off. It's been working in the Sudan since before 1980.
Even in the early days, when some of the foreign aid was going to less-genocidal governments under the Marshall Plan, it still didn't work. Most of the Marshall Plan money went to England and France, built up their bureaucracies, and crippled their private sector. Contrary to myth, Germany actually got less than no aid (their reparation payments were bigger than their Marshall plan share). While London and Paris drowned in aid, Germany and Japan grew their economies at record speeds through private trade.
A World Without Foreign Aid
Taxation without (or with) representation is tyranny. But foreign aid spending is secondhand tyranny. Any government-to-government transfer is a crime against any sort of accountability. If you don't think so, imagine what would happen if the Chinese government gave $800 billion to our government to launch undeclared wars in the Middle East and Asia. Oh, that's right, they already did.
A world without foreign aid would not be a world with more starving children. Foreign aid does not GO to starving children, it goes to big fat dictators (Mugabe really needs to drop a few pounds if he's going to live ‘til his assassination). Starving children are helped by private aid agencies, but most of all they can be helped by employed parents. If dictators can't get foreign aid, they'll have to allow their domestic economy to function if they want to have anything to steal.
If people want to help other people recover from tsunamis, droughts, or epidemics, they can (and do) without government middlemen. There is nothing government can do to supply schools, hospitals, or other goods more efficiently than private charities. Governments are only necessary to support less salable products, like genocide, nuclear weapons, and ethnic cleansing.
If governments were actually interested in helping people in poor nations, they would drop their agricultural tariffs, which cost the poor about as much as the total of official aid (and rob them of long-term jobs, farms, and businesses, not just an existence on the dole). But of course official “aid” is about power, not about helping people.
Right now the world is drowning in a tsunami of government-to-government aid. This “Axis of Evil” prevents people from overthrowing bad governments from Belarus to Zimbabwe (I was going to say Angola to Zimbabwe, but didn't want to pick just on southern Africans . . . .).
This is the best issue for libertarians in these times of depression and war. No ordinary American taxpayer wants to fund the Cayman Islands accounts of foreign warlords. The only reason that foreign aid still exists is that no one catalogs it, no one talks about it, no one campaigns against it.
It's time we started.