Foreign Aid Forever?

January 16, 1956

The request of the Administration for an appropriation of almost $5 billion for foreign aid, as compared with $2.7 billion for the current fiscal year, is so ill-advised and unjustified that all I can do here is to list some major objections to it, and leave further elaboration to a later time.

1—Secretary Dulles’s defense of this request is that the actual rate of foreign-aid spending will increase from $4.2 billion in the current fiscal year to “only” $4.4 billion in the fiscal year beginning next July 1. His defense of an 80 percent increase in the appropriation is that it is necessary to keep foreign aid flowing, to keep the “pipeline” filled up. Yet even without this addition to its foreign-aid reserves, the Administration will have a $7 billion carry-over of foreign aid appropriations at the end of this fiscal year.

Moreover, the Administration’s present line is a complete reversal of its previous attitude on budgetary carryovers. At a press conference on April 30, 1953, President Eisenhower said: “No more glaring illustration of the lack of balance between the military logic and the economic logic could possibly be found than the situation that existed when we took office. On the one hand, we found our Allies deploring our unfulfilled defense promises. On the other hand, we found that there was a total carry-over of $81 billion in appropriated funds, largely committed, for which cash must be provided from revenues in future fiscal years, over and above the normal cost of government. It’s just as if the late Administration had gone to the store and ordered $81 billion of goods, which we’ve got to pay for as they’re delivered.”

If Mr. Eisenhower was right in 1953, he is wrong now. A larger appropriation now means that the taxpayers must spend that much more, whether in the next fiscal year or later. Only by rejecting the present demand can Congress hope to control even future foreign aid, not to speak of bringing it to a long-overdue termination. The suggestion of a pledge to continue foreign spending for ten more years is an unwarranted attempt to tie the hands of future Congresses.

2—We have already spent $50 billion of the taxpayers’ money in foreign aid since the end of the second world war. Propagandists for this aid boldly give it entire credit for the postwar European recovery that has taken place. But it could just as plausibly be argued that this recovery would have been faster without it. Certainly it has subsidized and prolonged foreign exchange controls and socialism.

3—As the old excuses for foreign aid run out, our bureaucrats invent new ones. The present somewhat hysterical clamor for it rests on the tacit assumption that allies can be bought if we only raise our price. We are told we must outbid Russian offers of foreign aid. Yet even Secretary Dulles admitted that we ought not “to put ourselves in a position where the Soviets, by just making paper offers, can require us to make real offers to top them. That would mean that the Soviets would be spending nothing except a piece of paper but would require us to spend a great deal of money.” Yet this is precisely what we are doing, for example, in offering American taxpayers’ money to help Egypt build a grandiose dam.

4—The tacit assumption behind nearly all our so-called foreign “economic aid” has been statist or socialistic. It assumes that a nation prospers by handouts, rather than by attracting private investments through encouragement of free enterprise.

5—Even our so-called “military aid” rests on the dubious economic assumption that other countries can not afford to pay for their own defense, and that American taxpayers must assume that burden.

6—The foreign-aid program is merely one more symptom of budget irresponsibility. The Administration is not only asking more for foreign aid, but more for agriculture, more for highways, Federal aid for local schools, and so on. It wants to give other nations more than $4 billion a year, though we groan under onerous taxes, we haven’t yet balanced our own budget and are already $280 billion in debt.