Foreign Giveaway Grows

June 11, 1951

The Administration’s foreign giveaway program has grown by feeding on itself. The State Department wants to meet new foreign problems chiefly by handing out money because it has met past foreign problems chiefly by handing out money. It keeps changing the reasons for handouts but never the practice.

It now wants to spend $8,500,000,000 in the next fiscal year for foreign aid. Of this sum, $6,250,000,000 would be for “military” and $2,250,000,000 for “economic” assistance. Just why we must give away additional billions for “economic” aid is not clear. Even Mr. Truman admits: “The original goals of the Marshall Plan have been largely achieved.” Why, then, start setting up new goals? Italy’s index of industrial production is running about 30 percent above the prewar figure; the United Kingdom’s, 50 percent above; France’s, 40 percent above. Even if we grant the debatable proposition that it was the American taxpayer’s duty to restore Europe’s production to the prewar level, on what theory is it his duty to continue pouring in gift money now that European industrial production is well above the prewar level?

Similar questions may be raised about “military” aid. The North Atlantic Treaty, however desirable or even essential, was in itself an unprecedented and tremendous commitment. It is far from clear why we must take on the additional task of paying for part of the armament of practically all our Allies. This is an economic, not a military decision. It is for the military experts to say that a given Western European country needs so many tanks or planes. But it does not follow that we should turn all of them over as gifts. If a country buys them, it sends us other goods, military or civilian, in exchange—and so gives reality to the “mutual” part of “mutual aid.”

To give arms to Europe is to assume that Europe cannot afford to pay for these arms out of its own resources. This, to repeat, is a purely economic, not a military assumption; and there is no evidence to show that it is justified. Western Europe in 1951 is planning to spend only about 8 percent of its gross national product for armament compared with an American expenditure of about 15 percent. There is nothing to show that the sums we are giving to Europe for armament are not purely arbitrary in amount—or even that they are necessary at all.

The division, moreover, between “military” aid and “economic” aid is also in practice purely artificial. To give European governments $1,650,000,000 in “economic” aid is to relieve them of that burden. They can then spend that much more money on increased armaments without adding to the total they would otherwise have had to lay out. If, on the other hand, we give them $5,240,000,000 for “military” aid, then, unless their total rearmament budget is at least $5,240,000,000 more than it would otherwise have been, we have simply released all or part of their own funds for other kinds of expenditures. The only way we can be sure of protecting our gift funds against such a diversion is to dictate every item in the European budgets—which no one would seriously recommend.

What our foreign aid does, in effect (whether it is labeled “military” or “economic”) is to put heavier burdens on American taxpayers in order to relieve European taxpayers. And as every American is not richer than every European, “foreign aid” puts heavier burdens on many poorer U.S. taxpayers so that lighter burdens may be put on richer European taxpayers.

The politics of our foreign-aid program are as mystifying as the economics. Mr. Truman begins by telling us that the purpose of our handouts is to help the “free nations.” Now we find that these include the Communist dictatorship in Yugoslavia and the Fascist dictatorship in the Argentine. Most fantastic of all, Mr. Truman proposes to reward the Persians for seizing vital oil from the Atlantic Treaty nations by giving Iran still more money. If the present situation in Iran is not enough to puncture the iridescent bubble of the Point Four dream, is anything at all capable of waking the White House to realities?