How is the United States able to give billions to other countries when we are trillions in debt and how does it get approved?
In: Economics
It’s very important to understand that Foreign Aid is one of the biggest tools in what’s considered ‘Soft Diplomacy’. The US, as one of the largest and most powerful nations has a lot of ways to influence foreign policy to align with it’s interests, and the money we send to other countries is a huge part of that. It helps with trade deals, military posture, and it can be a good preventative tool to prevent what the US considers hostile interests (China/Russia/Iran) from influencing other nations against us. None of what the US gives to foreign countries is without getting something in return, and there is a part of the aid that truly is in the vein of “developing the whole world benefits the whole world” so it’s overall a net positive. It’s also more popular than trying to replace foreign leaders, install “puppet governments” and other unsavory actions that countries have been doing for years.
China’s “Belt and Road” initiative is a similar policy that they have for building infrastructure in poorer nations, but there have been cases where the projects funded by the Chinese government have been used to strongarm nations, because of interest rates and the way the contracts are written. If I remember one incident correctly, the CCP built an airport, only to take complete control of it after a couple years down the road because the nation it was built in wasn’t able to make their payments.
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