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
Lots of ways. Since Ukraine is in the news, let’s start there: most of the ‘aid’ is in the form of weapons. If those are new weapons, the money goes straight into American manufacturing plants to buy the weapons. Those plants then spool up, and hire a bunch of Americans to work the lines. The weapons leave the country, but the money stays at home.
Next, they give old or due-to-be-decommissioned weapons. Frequently simply giving something away is actually cheaper than paying to dispose of it… And believe it or not, it also costs money to simply sit on stockpiles of weapons. Giving them away to someone who can use them is not just generous, it’s the prudent financial thing to do. In fact the most valuable part of the whole thing is actually the manufacturing capacity. Anything that spools that up is better for national security than any amount of shells in deep storage.
It’s also a form of marketing. Sales of Javelins, for example, are through the roof since Ukraine showed the world how well these things did against tanks. Countries are now lining up to buy them from the good ‘ol US of A. Guess what country those sales are coming at the expense of? That’s right, Russia. A good part of their economy was selling military equipment to the countries who were duped into believing that it was nearly as good as the western stuff… that they could have a modern army on the cheap. Well, the war in Ukraine has disabused a great many countries about the quality of Russian arms. They’re paying attention and pulling dollars away from Russia and their crap quality arms, in favour of Western and the new Asian manufacturers.
Stepping away from Ukraine, aid has often been used by the West as an economic wedge to expand markets. For example: A nameless country makes a big deal about gifting a bunch of wheat to another country that’s struggling. Sounds great right? Well.. not always. All that free food floods the local market and essentially bankrupts the local producers who are struggling to make ends meet as well. So the local population doesn’t starve today, but they lose the capacity to be self sufficient in the long run. Now being reliant on food imports from those ‘generous’ countries. The local farmers are forced to sell out to big multinational plantation who then converts all that good producing land into coffee and chocolate cash crops that all get exported. If they’re lucky, those former farm owners get hired back at starvation wages to pick coffee beans. Meanwhile, the large agribusiness firms have a new market. The true solution to the problem was to buy the food from local producers and give that food to the starving people, until the crisis passed.
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