NationStates Jolt Archive

Note: Emphasis is mine

The Annual Foreign Aid Rip-Off
by Ron Paul

This week, Congress will vote to send more than 20 billion of your hard-earned dollars overseas, when it passes the Foreign Operations Appropriations bill for 2007. Our annual foreign aid bill is one of the most egregious abuses of the taxpayer I can imagine. Not only is it an unconstitutional burden on America’s working families, but this yearly attempt to buy friends and influence foreign governments is counterproductive and actually results in less goodwill toward the United States overseas.

Why is foreign aid so bad? Isn’t it our obligation to help those less fortunate? What is not mentioned by proponents of foreign aid is that it very seldom gets to those who need it most. Foreign aid is the transfer of US dollars from the treasury of the United States to the governments of foreign countries. It is money that goes to help foreign elites, who in turn spend much of it on contracts with US corporations. This means US tax dollars ultimately go to well-connected US corporations operating overseas.

Foreign aid distorts foreign economies and props up bad governments. It breeds resentment among citizens of foreign countries, who see the United States as keeping oppressive governments in power. Also, it is important to remember that forced charity is not charity at all. While I believe strongly in the moral value of helping the less fortunate, charity must come voluntarily from the heart, not under threat from the IRS.

This year’s bill is even worse than last year’s bill. Aside from the almost 600 million dollar increase, the bill will spend half a billion dollars on something called the “Trade Capacity Enhancement Fund.” This is nothing but an enormous fund to bribe foreign governments to “liberalize” their trade policies. As one of the strongest proponents of free trade in Congress, I know well that open and free trade is its own reward. Countries that trade freely with each other are wealthier and far less likely to go to war. We shouldn’t kid ourselves: this new program is not about free trade. Its purpose is to encourage countries to enter into new so-called trade agreements with the US government. Government-to-government trade agreements produce government-managed trade relationships, which are not free trade at all. This fund is a colossal waste of money that will result in less free trade worldwide.

Also, this year Congress will nearly double funding for the monstrous Millennium Challenge program. This is billed as a different kind of foreign aid, in that it only goes to governments that pursue “free market” economic and social reforms. Of course this is a waste of money: governments that pursue wise economic policies will attract much more in foreign private investment than the US government can send them. The true reward for sound economic policies is increased prosperity. Foreign aid does not purchase that prosperity but in fact distorts internal markets and props up inefficient companies.

Americans concerned about high taxes, out of control gas prices, and economic downturn should think hard about what the US government is doing with the money it takes from them. The greatest “foreign assistance” we can give to other countries is to demonstrate to the rest of the world that limited government and the rule of law ensure freedom and prosperity.


Source (http://www.lewrockwell.com/paul/paul327.html)


Couldn't have said it better myself. If only we had more Ron Pauls in Congress. :(

Isn't the most expensive example of foreign aid Iraq? I notice he never mentions Iraq once.

Yes. And for the record, he's one of the only people in Congress to have opposed the Iraq War from the very beginning.

Yes. And for the record, he's one of the only people in Congress to have opposed the Iraq War from the very beginning.
Shut that guy up.:)
Good on ya.

Yes. And for the record, he's one of the only people in Congress to have opposed the Iraq War from the very beginning.

Well, good for him. It does seem to be a region of disconnect for a lot of people, you have to admit.

Shut that guy up.:)
Good on ya.

:rolleyes:

Ron Paul is wrong.

While I believe strongly in the moral value of helping the less fortunate, charity must come voluntarily from the heart, not under threat from the IRS.

It was precisely the failure of this particular ideal of classic liberalism that led to the creation of welfare in the 19th century.

No, it wasn't. It was the other way around, the rise of the welfare state led to a fall in charity. Not incidently, people countries with less of a welfare state tend to do more by themselves than those states in which the government extorts wealth as "charity".

No, it wasn't. It was the other way around, the rise of the welfare state led to a fall in charity. Not incidently, people countries with less of a welfare state tend to do more by themselves than those states in which the government extorts wealth as "charity".

It never occur to you that charity was not succeeding in it's purpose?

No, I suppose it didn't, after all the Market is the only truth.

(For the record I prefer private charity but I recognise that it has it's limits)

No, it wasn't. It was the other way around, the rise of the welfare state led to a fall in charity. Not incidentally, people countries with less of a welfare state tend to do more by themselves than those states in which the government extorts wealth as "charity".
Totally incorrect. Historically and present day.

Historically the welfare system was pioneered by Biscmarck and Disraeli (of all people), precisely because the voluntary will for charity of the private citizen did not exist while the level of visible poverty was at atrocious levels. If charitable institutions had been up to the task, then the cumbersome and stingy apparatus of government of the 19th century would not have spontaneously and arbitrarily decided to help a large group of the population.

Present day. You'll find that nations with the highest GDP/per capita and standards of living are those with the most advanced and broad welfare systems on Earth. And yes the US has a spend-crazy welfare system whether they like to admit it or not.

It was precisely the failure of this particular ideal of classic liberalism that led to the creation of welfare in the 19th century.

The only problem is, government welfare is producing the same problems as the lack of welfare did in the 19th century; the government would be far better off providing that money as vouchers specifically and only redeemable for educational expenses, retraining, food/gas and health expenses. That's far better than the current system which effectively amounts to a cash handout to be spent on whatever the recipient wants be it food, gas, and school supplies or alcohol, cigarettes, and lottery tickets. The goal of welfare is to get people off of it and to provide them with the tools to better themselves, not just a cash handout with no supervision.

I've always believed that liberalization is the only way to conquer poverty; India wouldn't be seeing the emergence of a billion-strong middle class and a massive high-tech powerhouse like Bangalore if they had kept up the failed central planning and restrictive regulations of the socialist era. Ron Paul is right in that our foreign aid is not achieving anything; that money is simply going to either end up misappropriated or will simply create a culture of dependence that will not help lift the world out of poverty.

Historically the welfare system was pioneered by Biscmarck and Disraeli (of all people), precisely because the voluntary will for charity of the private citizen did not exist while the level of visible poverty was at atrocious levels. If charitable institutions had been up to the task, then the cumbersome and stingy apparatus of government of the 19th century would not have spontaneously and arbitrarily decided to help a large group of the population.

To a degree, though, their motivation for such programs was a political move rather than any kind of charity. Providing social services helped to take away the appeal of socialism and its various branches amongst the urban poor, which in turn prevented the government from having to deal with the possibility of a mass socialist or workers' movement that could derail the liberal economic system.

It was a way to eliminate most of the appeal of socialism without having to eliminate the liberal economic policies of the government. After all, it's still possible to have free trade with the existence of a welfare system although it can be difficult.

Well said Vetalia.
I agree that if money is to be sent abroad that the recipients must remain accountable in some form. The welfare system also needs to be constantly adjusted.

I personaly cannot conceive of a system of government without some form of welfare system. I beileve this excerpt from the Adam Smith Insitute site wraps up my views best.

Government needs to focus on its proper role – the welfare element – and draw the market into providing the rest.

(…) Welfare is changing. Just sending people welfare cheques does nothing to get people off welfare. Indeed, it deepens the perverse incentives in the system and traps people in poverty. The aim now must be to re-integrate people into the workforce and make them self-sufficient. That means tailoring work, housing, childcare and other support services round the individual. (…)

The benefits system has become more complicated, but it needs to be made much simpler. Saving for a pension should be at least as easy as buying a lottery ticket. We need to cut through the confusion, remove the perverse incentives against saving, and tailor lifetime support round the individual, using the market.

No, it wasn't. It was the other way around, the rise of the welfare state led to a fall in charity. Not incidently, people countries with less of a welfare state tend to do more by themselves than those states in which the government extorts wealth as "charity".

That's right! All those stupid progressive western European countries always asking for a handout! Damn you England! Why can't you be less needy, like those welfare-less African countries run by plutocrats?!

To a degree, though, their motivation for such programs was a political move rather than any kind of charity. Providing social services helped to take away the appeal of socialism and its various branches amongst the urban poor, which in turn prevented the government from having to deal with the possibility of a mass socialist or workers' movement that could derail the liberal economic system.

It was a way to eliminate most of the appeal of socialism without having to eliminate the liberal economic policies of the government. After all, it's still possible to have free trade with the existence of a welfare system although it can be difficult.

Naturally. Precisely why even a minimalist welfare system is still an integral part of the political platform of any party. The Socialist movements themselves did not occur incidentally. On the same taken most modern social-democrat parties now reject the centrally planned economy.

I'd have to agree, Canada6.

In many ways, welfare does help fill a role that can't be realistically filled by the market. Realistically not all actions can be broken down or justified in to terms of marginial analysis or rational self-interest; it is the government's duty to provide those things that the market can't as a means of making the market work best.

Charity is an altruistic act that does not fit within the rational self interest of the market. It isn't an investment that people expect a return on, it is an act motivated by moral and social conscience and since it is a conscience driven action it is not motivated by rationality or self interest. Indeed, giving money for one's self interest destroys the point of charity because it reduces it to an action meant to better you rather than the person you're giving money to.

Historically the welfare system was pioneered by Biscmarck and Disraeli (of all people), precisely because the voluntary will for charity of the private citizen did not exist while the level of visible poverty was at atrocious levels.

No, were that the case, the welfare state would have died a quick death, because it has failed, and continues to fail.

The argument that the institution of a welfare state provided a means to reduce the support given to socialist parties is a more credible argument, because such a rationale need not take actual results into account, unlike the argument that the lack of private charity made it necessary.

Why has it stayed? The answer to this lies in the nature of the welfare state. Its actions create demand for its services, and no government bureaucracy dies easily.

Incidently, history has shown that no amount of money can solve poverty. The only thing that has consistantly reduced poverty is wealth, specifically creation, and expansion of wealth, and the best way to do that is through the free market. Of course, that is irrelevant to the supporters of the welfare state, as this thread has shown, Their arguments are emotional, not logical.

Present day. You'll find that nations with the highest GDP/per capita and standards of living are those with the most advanced and broad welfare systems on Earth. And yes the US has a spend-crazy welfare system whether they like to admit it or not.

Now you're dealing in logical fallacies. There is no logical connection between the welfare state, and good economic performance.

Charity is an altruistic act that does not fit within the rational self interest of the market

It does not fit in with material self-interest. However, people do want to give, it has been shown time and time again. Of course, when government takes for the same purpose, people are disinclined to give, they feel that through paying their taxes, they have "done their bit". This view is of course wrong, but easy to understand.

Not incidently, self-interest has helped more people than altruism. Which is better for someone, giving him cash, or giving him a job? The latter, and the latter is of course rooted in self-interest, the person giving the job wants the services of the worker.

I completely, totaly and utterly dissagree. On all counts and I suggest you hit the history books a bit harder. A rational viewing of the facts will show that not only has NOT welfare failed but it has been instrumental in lifting millions of people above the poverty line all around the world for over a century.

What welfare has achieved has been at the cost of literally trillions (in one country alone!). If you regard "success" as being some achievement, regardless of time and resources, then you have a singularly odd definition of success.

You also fail to consider the opportunity costs. That money in the private sector could have done a great deal more good.

You further fail to consider the fact that simply giving people money (or vouchers for what they would purchase with that money) is not, and has never been a solution to poverty. It is a carthasis.

The only way in which the welfare state can be regarded as successful in proportion to resources is in providing cushy jobs to bureaucrats.

Incidently, the poverty line is infinitely mobile, and always sits in a politically defined location. Today, poverty is defined as only 1 car. A nonsensical definition of poverty is ever one existed.

What welfare has achieved has been at the cost of literally trillions (in one country alone!). If you regard "success" as being some achievement, regardless of time and resources, then you have a singularly odd definition of success.

You also fail to consider the opportunity costs. That money in the private sector could have done a great deal more good.

You further fail to consider the fact that simply giving people money (or vouchers for what they would purchase with that money) is not, and has never been a solution to poverty. It is a carthasis.

The only way in which the welfare state can be regarded as successful in proportion to resources is in providing cushy jobs to bureaucrats.

Incidently, the poverty line is infinitely mobile, and always sits in a politically defined location. Today, poverty is defined as only 1 car. A nonsensical definition of poverty is ever one existed.

You act as if the money paid out in welfare just disappears. Most of it goes right back to the richest who, ultimately, get the biggest share of profits from the goods and services that those on welfare couldn't otherwise afford.

Disraeliland 5 nobody isn't saying that welfare isn't distribution of wealth. You can't distribute what you don't have, hence creation of wealth is fundamental. However the advent of welfare has been instrumental in reducing poverty, increasing life expectancy, standard of living and guaranteeing positive liberty for all.

Now I am repeating myself.

I personaly cannot conceive of a system of government without some form of welfare system. I beileve this excerpt from the Adam Smith Insitute site wraps up my views best.

Government needs to focus on its proper role – the welfare element – and draw the market into providing the rest.

(…) Welfare is changing. Just sending people welfare cheques does nothing to get people off welfare. Indeed, it deepens the perverse incentives in the system and traps people in poverty. The aim now must be to re-integrate people into the workforce and make them self-sufficient. That means tailoring work, housing, childcare and other support services round the individual. (…)

The benefits system has become more complicated, but it needs to be made much simpler. Saving for a pension should be at least as easy as buying a lottery ticket. We need to cut through the confusion, remove the perverse incentives against saving, and tailor lifetime support round the individual, using the market.

Disraeliland 5 nobody isn't saying that welfare isn't distribution of wealth.

Welfare is redistribution of wealth.

You can't [re]distribute what you don't have, hence creation of wealth is fundamental.

Yet the welfare system inhibits wealth creation, and the more widespread the system, the worse it is.

However the advent of welfare has been instrumental in reducing poverty, increasing life expectancy, standard of living and guaranteeing positive liberty for all.

No, it hasn't. The free market is responisible for these things.

The aim now must be to re-integrate people into the workforce and make them self-sufficient.

That aim is shared by some of the politicians, and most of the taxpayers. It is not shared by those (the civil servants) running the system, they must perpetuate it of they will be out of jobs.

The benefits system has become more complicated, but it needs to be made much simpler.

This shows that there is no real solution to the problems welfare presents to society. If you make it simpler, you just create opportunities for fraud, and over-claiming. If you make it more complex, you create a bureaucratic labyrinth that will theoretically save money, but running this labyrinth is extremely expensive. Either way, more and more money is sucked in, for less and less in results.

The real point is this: in private hands the trillions extorted would have created, perhaps millions of jobs, and a lot of production. In government hands, it has seen poverty increase (though that is under the government's definition of poverty, which has about as much connection with reality as any socialist text you can find)

Saving for a pension should be at least as easy as buying a lottery ticket. We need to cut through the confusion,

It would be if not for government, which either creates perverse incentives not to save (as you pointed out), or destroys the savings through debasement.

You are of course free to build your political beliefs by denying historical fact. You do so at your own risk.