What actually happens? Does the foreign government get a lump sum or do we send payments? Where does that money come from?
Also how tf do we do this? Aren’t we trillions of dollars in debt?
In: Economics
There is no fixed meaning. In many cases, it might be in kind. So the news might say x billion but it could be wheat or weapons or medicines or vehicles etc. Sometimes it is in the form of other aid through third parties – like building a school or hospital etc.
The US government has departments that focus on this (USAID) and this is budgeted like any other agency. The money comes from the US treasury.
The amount of government aid given is barely 1% of the total US government spending every year. So this is hardly going to move the deficit needle in any meaningful way.
The recent news stories you see aren’t actually sending pallets of cash.
Sending military aid *worth* a billion dollars can be interpreted in a few ways and in recent cases is in supplies.
Even that though, a lot of it was older and already paid for. So the actual value may be different than the price tag of when it was bought.
It’s like giving someone an Xbox 360 and saying you gave them $300.
Even more so, the defense contractors then replenish stocks with newer stuff that was sent as aid, which still employs people.
Edit: [Seems about 1/3 of the recent aid is actually in financial assistance to the Ukrainian government to keep it functioning.](https://apnews.com/article/fact-check-us-aid-ukraine-money-equipment-714688682747) Lump sum or not can depend on the agreements. As for actually how, it also depends on the situation but it is possible for State level banks to wire large sums from accounts. It can also be earmarked for specific programs opposed to just “here is money, have fun with it”, some of it may be conditional like set aside to only pay healthcare workers or teachers.
Most of the time, what it means is companies in the US will be given money, which will go to US companies and workers and their mostly also American suppliers. The military equipment they produce will be sent to the receiving country.
Here is the budget justification for USAID, the US Agency that coordinates *non-military* aid. [https://www.usaid.gov/cj](https://www.usaid.gov/cj)
I don’t understand much of it but recently they said “The US gives $8 billion to Ukraine.” What actually happened is about 80% of it just goes to US defense industry to replenish stockpiles of old weapons that have been given to Ukraine.
Where does the money come from? That’s the best part, it comes from you!
It is more like store credit than cash. And full sticker price applies, no discounts.
> Aren’t we trillions of dollars in debt?
Trillions of **US** dollars. We just keep printing them. So far, it works.
The money goes to Raytheon and Northrup. The country gets tanks, radar setups, missiles, and gunnery. It’s a blank check for the US’ biggest industry: war.
It’s usually bribery for one. And economical manipulation. These infusions distort the natural flow of the economy and often cause more harm than good
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