Foreign Aid: Ever With Us
By Patrick J. Buchanan
December 21, 1994
For the foreign-aid lobbies, the good times will continue to roll
If one were to conduct a national opinion survey to discover which federal program a stressed-out Middle America most wanted to abolish, the runaway winner would be: foreign aid.
The idea that we should send endless streams of tax dollars all over the world, while our own country sinks slowly in an ocean of debt is, well, ludicrous. Almost every American knows it, feels it, believes it.
But the foreign-aid lobby need not worry. With the Democrats routed, the Republicans are mounting up and riding to the rescue.
Last week Sen. Mitch McConnell of Kentucky introduced the new Republican foreign-aid bill. The rhetoric was tough. In all my years on the Foreign Relations Committee, McConnell declared, I cant think of a single country, not one, that has graduated from foreign aid. Not a single country. But after the hot rhetoric came the soothing reassurances. For the foreign-aid lobbies, the good times will continue to roll.
In McConnells bill, all big foreign-aid beneficiaries Israel, Egypt and Russia are home free. Not one dime is cut. Not once, but a dozen times, McConnell insisted in his press conference that Europe and the Middle East must be off limits to any aid cuts. Reason: National security interest.
But, on its face, this seems preposterous. What, exactly, is the external threat to Egypt? Or from Egypt to the United States?
If President Hosni Mubarak is brought down, it will be by Islamic extremists. That movement is driven in part by an oversized U.S. presence in Cairo, and corruption of Cairos bureaucratic elite by U.S. aid dollars. If Egypt becomes a second Iran, foreign aid will be a primary cause.
As for Israel, this is 1995, not 1967. She has made peace with Egypt, Jordan, the PLO. Iraqs military was smashed in the Gulf War. Syria has lost her soviet arms supplier. Saudi Arabia has come down with the fundamentalist fever.
As for that $5 billion we send Israel and Egypt every year, it is more money than Ronald Reagan ever spent, in any single year, for SDI, a missile defense for the U.S. If national security is our concern, would it not make more sense to shift that $5 billion into a land-and-space-based missile defense for our own country, and all our allies?
Foreign aid can only be spent in countries committed, I repeat, committed, to the road to free-market reform, declared McConnell. But, according to the excellent Index of Economic Freedom just released by the Heritage Foundation neither Israel nor Egypt really qualifies. Economically, both nations are ranked in the Index as, Mostly Not Free.
With a 50 percent personal tax rate, a 45 percent corporate rate, a value-added tax of 17 percent, and the state controlling 52 percent of the economy, Israel is a deeply socialized country. And Egypt makes Israel look like Hong Kong according to the Heritage index, Egypts public sector is massive and inefficient; the personal income tax hits 65 percent, and the corporate and capital-gains taxes top out at 40 percent. Aid dollars from Middle America are sustaining socialism in the Middle East.
Now, Egypt and Israel are friends. But we do friends no favor by putting them on the welfare rolls, which is what foreign aid is. It creates dependency, breeds corruption, corrodes honest relations, and bloats government at the expense of the private sector.
The way to convince Israel and Egypt to set out McConnells road to market reform is to end their foreign aid. Force Jerusalem and Cairo to downsize their regimes, sell off state enterprises, lay off bureaucrats. If Republicans believe the path to prosperity is through defunding, downsizing, and disempowering government, why are they doing the exact opposite in Israel and Egypt?
And Russia? Right now, the International Monetary Fund is working up a mammoth $6.5 billion loan, largest in IMF history, to finance a quarter of Russias deficit, and cobbling together another $6 billion fund to back the ruble. When these immense loans go into default, as they shall, who do you think will end up paying them off? Yep, your grandkids. One-fourth of Americas national debt is traceable to foreign aid.
This is a new lease on life for foreign aid, Sen. McConnell exulted at his press conference. Indeed, it is. It means foreign aid forever. But is that why America voted for the Republican Party in November?
Fascinating: The U.S.A., now greatest debtor nation in history, is
out borrowing tens of billions yearly going ever deeper in
debt to help other countries reduce their debts. Greater love
than this has no nation, that it should lay down its life for its