Saving the World With Your Money

by Rep. Ron Paul, MD
by Rep. Ron Paul, MD

The Millennium Challenge Act, a new foreign aid scheme I wrote about back in May, received its hoped-for $2.5 billion from Congress last week. Only 41 members of Congress supported an effort to strip the funding, demonstrating once again that the two parties are not serious about reducing federal spending. Considering all the rhetoric in Washington about runaway spending, one would think a new foreign welfare program would be among the easiest things to cut politically.

Since American foreign aid programs began in earnest decades ago, tens of billions of US tax dollars have been given to nations around the globe. The utter failure of this money to change things for the better in those nations is no longer in question; even the most earnest liberals are beginning to admit the obvious. Most of the recipient nations remain endlessly mired in poverty, political and legal corruption, and cultural malaise.

A rational person would argue that failed aid programs should be eliminated. In Washington, however, failed programs get more money thrown at them.

The Millennium Challenge Act is designed to appease fiscal conservatives and defense hawks by appearing to single out friendly, well-behaved nations for aid payments, ostensibly creating a carrot-and-stick approach. But the Act merely puts a shiny new label on the same old failed policy of trying to remake the world using welfare. Welfare has never worked at home and it’s never worked abroad, no matter what “incentives” Congress tries to attach.

The proponents of the Millennium Challenge Act tell us this time it will be different. If only we condition foreign aid money on the adoption of certain policies, the recipient nations will clean up their acts. Market economies and democratic political reforms surely will follow, if only American taxpayers provide a little seed money.

Does anyone actually believe this? It is beyond presumptuous to think Congress can change the politics, economies, and cultures of foreign nations. It is simply preposterous to imagine that foreign aid will be cut off once given, no matter what a nation does or fails to do. After all, we’ve been giving billions to some of our worst enemies for decades. Once a federal program begins, it becomes permanent. Mark my words, the Millennium Challenge Act budget will grow in future years.

The question nobody in Washington wants to answer is this: What gives the Congress the right to send American tax dollars overseas in the first place? Certainly not the Constitution. Why should American taxpayers, many of whom are poor themselves, be expected to fund foreign welfare? Remember that the poorest Americans are hardest hit by the inflation tax, which is the direct result of deficit spending and the printing of new money to service federal debts.

Congress hardly needs to concoct another way to spend money. Government debt already exceeds seven trillion dollars, and runaway spending will force yet another increase in the federal debt ceiling law before the end of the year. At its current pace, Congress soon will create single-year deficits of one trillion dollars. Combine this indebtedness with future liabilities – in the form of exploding Social Security and Medicare obligations – and it’s clear that Congress can find better things to do with $2.5 billion than send it overseas.

My very modest proposal is this: eliminate the Millennium Challenge Act, apply half the money to the national debt, and spend the rest domestically if Congress simply can’t bear to give it back to taxpayers. Even the worst domestic program is better than useless and meddlesome foreign aid.

July 20, 2004

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