Yet More Aid To Dependent Dictators

Posted: December 26th, 2009 by Militant Libertarian

by Bill Walker

On December 16 President Obama signed the omnibus appropriations bill. It included H.R. 3081, a doubling of foreign aid from pre-Obama times, to 48.764 billion dollars. By comparison official US foreign aid in 2006 totaled less than 23 billion dollars.

This is all money which the US has to borrow from foreign taxpayers, as the US is 12.1 trillion in debt (not counting Social Security, Medicare, or prescription drug benefit obligations. Those are estimated by the head of the Dallas tentacle of the Federal Reserve to put the real total debt over 100 trillion. )

Some people would think that when you can’t pay your own debts, borrowing more to give away would be slightly irresponsible. But those are the kind of bitter people who cling to their guns and religion, and will never amount to anything. Important people, the kind who win the Nobel Peace Prize in their spare time, know better. As the Parable of the Dishonest Steward says in Luke 16, it’s smart to give (other people’s) money away to outsiders when you fear you may soon lose your position. And there’s been lots more Christmas gifts for outsiders in the recent budget besides the “official” foreign aid.

You might think that I’m about to mention the trillions that have been given to the large money-center banks, insurance companies, investment houses, and other deserving causes. Nope. Not gonna bring them up. We all know that the financial industry’s dealings with politicians are completely disinterested and pure. This article is strictly about the money that funds evil foreign tyrants, not our patriotic home-grown variety.

There is a similarity between off-the-books Aid To Dependent Dictators and the bank bailouts, though. The money for both is simply printed by the Fed and handed to the lucky recipients without any time-wasting linkage to Congress, the budget, or any of that boring stuff. Ever since the passage of the Monetary Control Act of 1980, the Fed has simply “monetized” foreign debt when our foreign policy geniuses needed to fund some deadbeat dictator or bail out the bank that lent to him. Back then a guy named Ron Paul raised the first alarm about the first bailout under the Act. It was a matter of a critically important hundred million or thereabouts for the past-due debt of the Sudan. Without that early funding, how could the central government of the Sudan have become strong enough to oversee the genocides in Darfur?

Just in case grants and direct US bank loans aren’t enough, dictators and oligarchs also have large international credit facilities through the World Bank and IMF. The World Bank lent out a little less than 50 billion last year, much of it to governments which the Bank says “have little access to credit markets” (that’s because they don’t pay anyone back). This money doesn’t appear on government budgets. Where does the money come from? The World Bank borrows it, of course.

The IMF has also begun to borrow heavily. The LA times reported in 2008 that “In just the last four years, the IMF’s total loan portfolio has shrunk from $105 billion to less than $10 billion; over half of the current portfolio consists of loans to Turkey and Pakistan.” But China and Russia have committed to buying tens of billions of IMF bonds, financing a whole new round of loans to governments.

War: The Health of The (Puppet) State

Arguably even more expensive than the direct monetary subsidies to dictators and “elected” kleptocrats like Karzai have been our military commitments to prop them up. The wildly spinning counter at says that the Iraq and Afghan occupations have cost about 946 billion as I write this. tracks just the direct appropriations, using Congressional Research Office figures.

Economist Joseph Stiglitz attempts to count the cost of propping up the Sunni tribal leaders and Kabul warlords more accurately, including such expenses as disabled veteran’s long-term care, the higher oil prices (remember, oil was $25 a barrel before 2003), etc. His book last year was titled “The Three Trillion Dollar War.” Unfortunately for Stiglitz, the book came out before Obama escalated the Afghan war with $30 billion+ worth of new troops and “contractors,” expanded our use of robot assassins into Pakistan and Yemen, etc. It is near-certain that three trillion will turn out to be an underestimate.

Past US foreign aid has gone to Idi Amin, Julius Nyerere, Joseph Stalin, Fidel Castro, and Pol Pot (even after Pol Pot killed 25% of Cambodia’s population). We also gave money to North Vietnam, helped fund the Taliban government of Afghanistan, gave nuclear reactors to North Korea, and back in the day helped the Pakistani spy agency ISI build up a real gung-ho guy named Osama Bin Laden. And of course it was also the ISI which made the Taliban powerful enough to take Afghanistan in the first place.

Of course the excuse is that things would be worse without our help. Frankly I’m not buying it. Worse than Pol Pot? Just exactly how could anyone be worse than Pol Pot? Any worse and there wouldn’t be anyone left to do the killing. I don’t think anyone thinks that the Taliban or Kim Il were worthy causes either.

US foreign aid policy since 1945 has been based on the idea that dictators just need a few bucks till payday, and then they’ll straighten out, give up genocide, etc. But just like your brother-in-law that keeps skipping his AA meetings, all this money really does is let the dictators keep their genocide habit going. If their money comes from the US, why bother with the messy annoyances of having to allow a domestic middle class, trade, freedom, etc.? Much easier to just live off the aid checks and shoot anyone who mouths off.

Even in the early days, when some of the foreign aid was going to less-genocidal governments under the Marshall Plan, it still didn’t work. Most of the Marshall Plan money went to England and France, built up their bureaucracies, and left them way behind Germany and Japan. Contrary to myth, Germany actually got less than no aid (their reparation payments were bigger than their Marshall plan share).

Foreign aid doesn’t help our security (unless you think the North Korean and Pakistani nuclear bombs are going to help us). It doesn’t help foreigners’ security either. In many cases all we have done is supply both sides of conflicts with larger weapons. What sense does it make for us to buy expensive armaments for both Egypt and Israel, for both Pakistan and India?

Foreign aid doesn’t help economic development; every rich nation on Earth has built itself up by work and trade, not by aid programs. Foreign aid certainly doesn’t help the American economy.

Practically no American voter likes foreign aid, or borrowing the money to pay for it. (Thoughtful foreigners like our support for their oppressors even less). Yet it is the fastest-growing budget item.

How Can We End Foreign Aid?

Publicize it, here and abroad (those Chinese taxpayers need to know about the $800 billion their fearless leaders have donated to fund the US government). Libertarian think tanks need to track foreign aid, both official and off-the-books. We need to add all the pieces of the aid puzzle together. As Dirksen would have said today: “A trillion here, a trillion there, and pretty soon you’re talking about real money.”

The Dishonest Steward counts on Americans being too lazy to check the books. Our job is to make the bottom line figures on the many programs that make up “Aid To Dependent Dictators” easy to find. When enough Americans know how many trillions have been stolen from them over the decades since 1945, the Dishonest Steward may indeed have to find a new job.


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