Foreign Aid

old man pointing(Part 2 in Grandpa’s series on improving the economy)

 “Rich nations have the moral duty to help poor nations,” so the saying goes. Of course, this would apply to America in particular. Oh, really? In terms of which country has the largest debt, America is not the richest, but the poorest nation on Earth. That changes the perspective, doesn’t it?

One becomes richer by spending less money than one has coming in and using the surplus to make even more. That is simple economics and applies to nations as well as to individuals. It is illegal for people to create a money surplus by printing their own money. It’s called cheating. Having the Fed, or the banks for that matter, create money out of thin air is cheating also.

I think we can all agree that a healthy economy requires honest money that people can have confidence in and a country that is debt-free. One way to approach that ideal more closely is to cut back on foreign aid. Would you borrow money you can’t pay back and then give it away to the poor? That would be foolish, wouldn’t it?

where does the money go

A government does not have a duty to help other countries. Its duty is to serve its own people.

Of course it would be cruel to suddenly cut off all foreign aid overnight. We should do this gradually – say reduce the amount by ten percent a year. By the same token we can also reduce our military presence in foreign countries by ten percent a year.

There is a proverb that states, “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” To help reduce the pain of less foreign aid we can set up training centers inside the US to educate representatives from developing nations to help their countries become more self-sufficient and prosperous. That way, foreign aid money stays within the US and creates employment opportunities. Plus, we can ensure that the funds are put to good use instead of lining the pockets of politicians.

The training centers could be set up along the Mexican border, as proposed in my earlier post, The Road to Economic Recovery  Additional training centers could be set up in economically depressed areas in the US, where they could also benefit the locals.

Americans are a generous people. They volunteer, they donate. They want to contribute to good causes. How can they do that with reduced foreign aid? No problem. They can contribute by flowing to the training centers, where folks are taught entrepreneurial skills and greater independence.

Of course, this is not to discourage individuals and charitable organizations from reaching out and improving conditions in economically disadvantaged nations. That is highly commendable. But it is wrong to burden all our tax payers, without their individual agreement, with foreign aid to countries they may not even have heard about.

The troops that were withdrawn from foreign soil could help build and set up the training centers. The destructive powers of the military should be balanced by constructive activities and this would be one such activity. More on this in a future post.

“Aid leads to more aid and more aid and more aid and less independence of the people that are receiving aid.” – Paul Kagame, President of Rwanda

“I don’t know of any country in the world where a bunch of foreigners came and developed the country. I don’t know one: Japan? Korea? No! No country did that. I know about countries that developed, on trade and innovation and business.” –  Herman Chinery-Hesse

Bribe Money

Bribe Money

“Foreign Aid is taking money from poor people in a rich country and giving it to rich people in a poor country.” – Ron Paul.

More information about foreign aid at