President Trump’s new budget is getting attacked by politicians and interest groups in Washington. These critics say the budget cuts are too severe and draconian.
My main reaction is to wonder whether these people are illiterate and/or innumerate. After all, even a cursory examination of Trump’s proposal shows that the federal government will expand over the next decade by an average of 3.46 percent every year, considerably faster than inflation.
For what it’s worth, I’m sure most of the critics actually do understand that government will continue growing under Trump’s budget. But they find it politically advantageous to engage in “Washington math,” which is when you get to claim a program is being cut if it doesn’t get a sufficiently large increase. I’m not joking.
That being said, while the overall federal budget will get bigger, there are some very good proposals in the President’s budget to terminate or reduce a few specific programs. I don’t know if the White House is actually serious about any of these ideas, but some of them are very desirable.
- Shutting down the wasteful National Endowment for the Arts.
- Defunding National Public Radio and the Corporation for Public Broadcasting.
- Terminating the scandal-plagued Community Development Block Grant program.
- Block-granting Medicaid and reducing central government funding and control.
Today, let’s add a fifth idea to our list. The Trump budget proposes a substantial reduction in foreign aid (for numbers, see line 18 of this OMB excel file).
I hope these cuts are implemented.
In part, I want to save money for American taxpayers, but I’m even more motivated by a desire to help the rest of the world. Simply stated, foreign aid is counterproductive.
The great paradox of government-to-government aid transfers is that they won’t work if recipient nations have bad policy. Yet we also know that nations with good policy don’t need handouts.
In other words, there’s no substitute for free markets and small government. That recipe works wherever it’s tried.
My colleague at the Cato Institute, Marian Tupy, embraces the idea of less foreign aid in a Reason column.
President Donald Trump is said to be considering large cuts to foreign aid. Those cuts cannot come soon enough.
And he explains why in the article. Here’s the passage that caught my eye.
Graham Hancock’s 1994 book, The Lords of Poverty: The Power, Prestige, and Corruption of the International Aid Business, is still worth reading. As the author explains, much of foreign aid is used to subsidize opulent lifestyles within the aid establishment. “Only a small portion of [aid money],” Hancock writes, “is ever translated into direct assistance. Thanks to bureaucratic inefficiency, misguided policies, large executive salaries, political corruption, and the self-perpetuating ‘overhead’ of the administrative agencies, much of this tremendous wealth is frittered away.”
The problems are not specific to the United States. Foreign aid also is used as a scam to line the pockets of contractors in the United Kingdom.
The British aid contracting industry has more than doubled in value from £540 million in 2012 to £1.34 billion last year. The proportion of every pound of taxpayers’ aid money that is spent on consultants has risen from 12p in 2011 to 22p. …Budget breakdowns showed the public being charged twice the going rate for workers. One contractor on a project had a margin of 141 per cent between staffing costs charged to Dfid and the cost at market rates.
By the way, one study even found that foreign aid undermines democracy.
Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the “curse of natural resources” literature. …Using data for 108 recipient countries in the period 1960 to 1999, we find that foreign aid has a negative impact on democracy. In particular, if the foreign aid over GDP that a country receives over a period of five years reaches the 75th percentile in the sample, then a 10-point index of democracy is reduced between 0.6 and one point, a large effect.
Last but not least, Professor William Easterly explains in the Washington Post that foreign aid does not fight terrorism.
President Trump’s proposed budget includes steep cuts in foreign assistance. Aid proponents such as Bill Gates are eloquently fighting back. …The counter-terrorism argument for foreign aid after 9/11 indeed succeeded for a long time at increasing and then sustaining the U.S. foreign aid budget. …the link from aid to counter-terrorism never had any evidence behind it. As it became ever less plausible as terrorism continued, it set up aid for a fall. …the evidence for a link from poverty to terrorism never showed up. …studies since 9/11 have consistently shown that terrorists tend to have above-average income and education. Even if there had been a link from poverty to terrorism, the “aid as counter-terrorism” argument also required the assumption that aid has a dramatic effect on the poverty of entire aid-receiving nations. Today’s proponents of aid no longer make the grandiose claims of aid lifting whole societies out of poverty.
Heck, foreign aid keeps societies in poverty by enabling bigger government.
Yet international bureaucracies such as the United Nations keep peddling the discredited notion that developing nations should have more money to finance ever-bigger government.
The bottom line is that people who care about the world’s poor people should be advocating for freedom rather than handouts.
P.S. If you’re still skeptical, I invite you to try to come up with an example that answers either of these two questions.
[…] though I (correctly) doubted the Trump Administration’s sincerity, I applauded proposed reductions in foreign aid back in […]
[…] specific provisions (dealing with government-funded media, food stamps, government-funded art, foreign aid, OECD subsidies, community development block grants, and […]
[…] Curtailing foreign aid payments that enable bad policy in poor nations. […]
[…] I’m especially hot and bothered about what Brian suggests for Amtrak, the NEA, the CPB, and foreign aid. […]
american taxpayer aid to foreign nationals is not necessarily spent abroad… more democrat porn:
“Billions of tax dollars are being used to “resettle” refugees in America, mostly from Muslim countries, and the feds are using a loophole in the Freedom of Information Act (FOIA) to withhold records from public scrutiny.”
“Disclosed were employee salaries of VOLAGs contracted by the agency to provide services for the illegal immigrant minors, the cost of laptops, big screen TVs, food, pregnancy tests, “multicultural crayons” and shower stalls for the new arrivals. The general contract was to provide “basic shelter care” for 2,400 minors for a period of four months in 2014. This cost American taxpayers an astounding $182,129,786 and the VOLAG contracted to do it was government regular called Baptist Children and Family Services (BCFS). The breakdown includes charges of $104,215,608 for UACs at Fort Sill, Oklahoma and an additional $77,914,178 for UACs at Lackland Air Force Base in San Antonio, Texas.”
“U.S. Taxpayers Buying Refugees Pregnancy Tests, Board Games, Laptops
And the federal government is trying to hide it.”
by Trey Sanchez
http://www.truthrevolt.org/news/us-taxpayers-buying-refugees-pregnancy-tests-board-games-laptops
Good explanation. I notice direct foreign remittances ( i.e. people sending their own money abroad to causes and people they care about ) are around 3 times governmental foreign aid. Apart from work to tackle communicable diseases ( an externality ) the free market system has got foreign aid covered. And the Gates Foundation tackling malaria may even have communicable diseases sorted one day. So why do government officials want to pick our pockets to achieve what is already happening by voluntary action.
Enrichment of the giving and receiving bureaucrats can be the only answer.