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
Usually, the vast majority of the money stays right here at home. When we give 100 million dollars in food aid, it just means that the federal government, which buys up agricultural surpluses in the form of agricultural subsidies, has found a way to get rid of these enormous surpluses that we cannot sell at home (because the point of subsidies is _not_ to compete with producers). When we give 100 million dollars to Zimbabwe to help with their agriculture, it often comes with conditionalities like “you can only spend it on John Deere tractors.” Other funds are given out as grants to US-based NGO’s that spend most of their money here anyway. You know, like CARE Intl. They just subcontract that, and then that gets subcontracted again, and so on and so forth.
Plus, in the end, it’s just not that much money. I know a few billion seems like a lot to you, but it’s really not on an economy our size. We never hit 1% of government expenditures. It’s peanuts.
Lastly, the theory behind it is this (even though development aid doesn’t actually work, don’t take my word for it, ask development economist and Nobel prize for economics winner Angus Deaton): having poor countries is economically bad for us, because poor people cannot afford to buy our shit. It is in our interest to eliminate poverty.
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