Who Speaks for America?

December 20, 1954

The mania for giving the American taxpayer’s money away to foreign countries has grown to such an extent that, with some honorable exceptions, there now seem to be only three schools of thought in Washington: Those who want to pour more of the money into Europe; those who want to pour more of it into Asia; and those who want to pour more into Latin America.

The arguments of some of these groups are less distinguished for cogency than for unintended humor. No one should miss the outburst of Congressman James G. Fulton at the recent inter-American conference in Brazil: “We are handing out billions to Europe and Asia and we are offering a mere pittance to our own family in Latin America.” How the Argentine, say, got to be part of “our own family” in some sense in which democratic Britain does not deserve the term, we need not pause to inquire. More significant is the use of the fact that we are “handing out billions to Europe and Asia” not as an argument for reducing these handouts but as an argument for handing out still more somewhere else. Apparently we must give every nation or area relatively as much as the one to which we have already given the most so that no one can feel slighted. In fact, it is precisely by taking this kind of argument seriously that we have already made postwar grants or loans to more than 60 different nations.

Nor should we overlook the recent speech here of the Prime Minister of Ceylon, who told us in effect that it was up to us to support an enormous giveaway program to Asia, but that we ought not to have the effrontery to ask for anything in return. “We want economic help in abundance,” remarked the Prime Minister. “We want financial aid without being tied in strings. . . . The nations of Asia . . . do not believe the first need is a defense pact against aggression. The first aid they need is economic aid.”

None of these extravagances, nor all our jolts and disillusions of the past, seem in the least to discourage the Administration advocates of more giveaway. Secretary of State Dulles and Harold E. Stassen, the director of the Foreign Operations Administration, are spearheading a proposed new program of economic aid to the underdeveloped countries of Asia in the hope of “winning their friendship.”

We need not go over again here all the reasons why this program is thoroughly unsound—politically, militarily, and economically. From the economic standpoint, handouts from the American Government to the backward countries of Asia cannot do anything substantial to raise the living standards of these countries. Those living standards will not be noticeably raised until the countries of Asia learn what is meant by free enterprise and make the thoroughgoing reforms that would be necessary to permit free enterprise to flourish. Experience has shown that handouts from the American Government merely delay such reforms. They lead the political rulers of Asia to think they can get all the money they want for their statist and socialist schemes without bothering to create the economic climate necessary to attract the economic climate necessary to attract private capital.

But while these huge handouts would not help the underdeveloped countries of Asia and Latin America, they are draining and weakening us. Our tax burden is already as high as the American economy can stand. There is hardly a man in Congress who does not concede this. The Democrats are talking, not of increasing taxes but of demanding even further reductions beyond those that the Eisenhower Administration has already made.

Yet even with our present spending program, the Federal treasury is expecting a deficit in the current fiscal year, which closes at the end of next June, of $4.7 billion. This deficit means a continuance of inflation, further undermining of the dollar, and a still higher mountain of debt. At the same time we are spending more than $5 billion in the current fiscal year on foreign aid. Anyone who can put these two figures together ought to be able to draw his own conclusion. This is the time to diminish or eliminate the foreign giveaway program, not to dream up grandiose new schemes.