Wednesday, November 23, 2011

Understanding Ron Paul: Foreign Aid

By Dan Beaulieu

 "I am an imperfect messenger, but the message is perfect"  –  Ron Paul

One thing is certain of Dr. Ron Paul, he is not a sound-bite candidate. That is, he often speaks over the heads of voters which causes a lack of understanding. It is in my personal opinion that Ron Paul cannot be understood in the 30 seconds allocated to him in debates. His ideas must be studied; however, once one does understand Dr. Paul, they often stick around.

For this reason I present to you my series:  

Understanding Ron Paul

Foreign Aid

$25 billion per year in foreign aid seems like a drop in the bucket to our annual $2.7 trillion dollars national revenue, however, one should put into perspective that our budget is over $3 trillion per year and our national debt is over $15 trillion. A rational person understands that this is simply unsustainable, in its most basic math. However, this is the obvious argument and I don't find it necessary to dwell upon the obvious. I will, however, stay on the argument of economics for the time being as I feel we are missing something that should resonate with American’s and is consistently ignored. That argument is a rudimentary economics lesson written by William Graham Sumner, called the forgotten man.

The Forgotten Man Applied

As we all understand, the $25 billion dollars has to, at some point, come from the productive sector of society; the taxpayers, whom we will call group A. This money is then provided as financial aid to foreign bureaucrats to their benefit alone, we’ll call this party, group B. We, as a species, have a predilection for considering only what we can immediately see in front of us. We can see the charity of group A (albeit a forced charity) and we can see the benefits reaped by group B. However, no one stops to consider that what we cannot see, which is group C; the forgotten man.

Group C is the car manufacturer, the clothing maker, electronics manufacturer, the bread maker, the paper miller, the restaurant owner, the bookseller, the small businessman; the list goes on ad infinitum. Since our government took the money from group A and gave it to group B, group C was never realized.  Essentially we are giving charity to the foreign group B at the loss of what group C would have had to offer. Let me stress the magnitude of productive loss and potential unemployment we suffer due to this forced “charity”.

Putting this into a perspective that we all can relate to, let us say that a $1 million a year company employs 75 people, some have more some have less. These 75 people have to care for 75 families, let’s assume families of 3 for this example. So this single $1 million dollar company directly affects 225 people’s lives. Now let’s extrapolate this figure to $25 billion. That’s roughly 1,875,000 workers who take care of a total 5,625,000 family members. Not all of these workers encounter job loss per say, but productivity loss eventually becomes job loss.

Since 1970 we have spent well over a trillion dollars on foreign aid (link). Irrefutably, this money never went to the forgotten man, denying hundreds of thousands of jobs; perhaps entire industries from ever coming into existance.

Immorality of Foreign Aid

Since this document is regarding Ron Paul's views, perhaps its said best in his own words. Please listen to this 8 minute chapter from Ron Paul's audiobook "Liberty Defined" for his personal view on foreign aid.

Back to Understanding Ron Paul Index


  1. Great Post.

    If I want to give money to a program or a project I do. If gov representatives want to be charitable, let them do it with their own money.

    I donate a lot of money locally and that is where I want it to be.

    Aids needs to fought, So does malaria. These are largely education and behavioral changes. It takes money to educate people.

    Keep up the good work of posting about Dr Paul and helping to educate the electorate.

  2. Seems simplistic. All you are saying is that you want to have a lager part in where aid goes, if anywhere. The so called forgotten man is the man who is better off than the one the government gives aid too out of his taxes, a government the majority of forgotten people elected.


  3. sbvt,

    I am simply drawing a point to how damaging it is to our economy to take money from the productive members of society here and just give it to bureaucrats in other countries.

    We cannot keep it up forever.

  4. If that is the case, then all you have to say is that all the money spent on foreign aid would be better spent here in the USA. That may be true given the present economic reality. But in good economic times is it true? Unless it never really gets to the people it was intended for, I am not so sure it's not a good idea to be charitable when we can afford it.

    But I think Paul really wants to say that people should be allowed to choose who they would like to help and not leave the decision in the hands of the government, thus making for less that the government has to be concerned with and thereby a smaller government. That would leave a place for a non profits to coordinate aid to other countries in need, groups like UNICEF and the like I suppose.


  5. Sbvt,

    I agree. However, in the audioclip, Paul makes a good case for the immorality of foreign aid too. Charity should never be forced, and if we elect to do it we should be able to choose where it goes. In my opinion it should always go to the private sector in these foreign countries. Look at Japan, our private citizens saw a cause and sent tens of millions to them.

  6. Hi Dan, I have no other way to message you but here so I ask this: You state foreign aid has cost 4 trillion in the last 10 years. I understood the annual foreign aid expenditure was around 50 billion. Multiply that by 10 years & you get 500 billion. That's 1/8 of 4 trillion. Can you provide a little documentation because that's way off if true.
    I'm on Facebook: Gary Hardee

  7. Hi nalejbank,

    thanks for drawing that to my attention, I mispoke. It's been corrected.


  8. Your foreign aid number since 1970 is still outrageously wrong. Read your own citation. $4 trillion is the foreign aid *gap*, that is, the difference between what the wealthy nations of the world promised in 1970 and what they've delivered since. Those countries have actually delivered only $3 trillion, of which less than 1/3 came from the US.

    The deficit is big enough that virtually no area of spending can be spared from cuts if we really want a balanced budget. But spending any time at all focused on foreign aid is just a ridiculous waste. Cut it by 1/3 and move on to something big enough that it can actually make a dent in the problem.

  9. Hey yehoni,

    Thanks for bringing this to my attention. I believe I must have confused my numbers. I apologize to the readers and I will try to pin down the specific number in the near future.

    $4 trillion is our military expenses since 2000.

  10. Aid needs to be given, PERIOD. I would agree that the money would be spent more effectively by donating through the private sector. Such as Aid organizations like UNICEF, or other charitable organizations. I like Charities without Religious agendas like, Americares, Charity Water, etc...

  11. Why?

    Our government literally steals money from the private sector and gives it to rich bureaucrats in other countries which is most often spent sending their people to war.

    The only way foreign aid should work is like how the red cross works. A private organization here should raise money from the WILLING people here and given to PRIVATE organizations in other countries.

    Sent from HTC phone

  12. For this reason I love Dr. Paul. I lived as a missionary for a year over seas and depended on other people for money to live. I hated the fact that I was being given money but at least these people CHOSE to give to me.

    Now I am in group C :) making patriotic plaques with my father. So please support someone in group C