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Why does the percentage of the Federal budget matter? The US gives more absolute dollars of aid away every year tha the rest of the world combined. Quibbling about percentages is using a strawman.
Scout, tell that to those who are always complaining about the “high percentage” we give to others and who say “we don't give enough for our own people.” ::)1% is too low, IMO.
1% is actually pretty close to our actual percentage. That should open your eyes to exactly how large the US economy really is. If I remember correctly our aid is ceratinly less than 5% of the federal budget budget and a miniscule portion of our total economic size.
I have the graph somewhere on my home computer. Actual percentage is like 0.9% And that includes all the aid (not domestic military spending) to Iraq/Afghanistan.
The folks that complain that we dont give enough are the Europeans who give less in absolute amounts but a higher percentage of their respective budgets.
and don't forget our own Socialist Liberals. ;D (which is kind of an oxymoron, dontchya think?)
Not really, they have socialist conservatives here in Europe. Now that would seem an oxymoron, but somehow they make it work.
Yes, I think “socialist conservative” is an oxymoron since conservatives shun (in theory) socialism, whereas liberals half embrace it. As for the foreign aid, the shame is that it could be less (i.e. save money for ourselves for other uses) if we did something like eliminate subsidies to sugar farmers in the U.S. When our government does that, it keeps domestic farmers in business when they should really go into farming some other field. Removing the subsidies would allow competition to enter the market, and we would then be likely to import foreign sugar from poor, Third World economies that produce sugar more cheaply. This would give those poor nations hundreds of millions of dollars in revenue. Mind you, these are the same Third World countries that we give hundreds of millions of dollars in foreign aid to anyway.So by eliminating subsidies, not only would we save money that would otherwise be spent on U.S. farmers, but also money sent in foreign aid….not to mention that these Third World countries could potentially rise out of poverty.
Subsidies help encourage autarky, which in general is a good thing. The Europeans are discovering what a bad thing that is right now because the Russians have them over a barrel as far as energy supplies go. Europe can't complain too much about Georgia because all Russia has to do is turn off the Gas and Coal and the lights go out in Europe. This gives Russia quite a bit of influence in Europe. If Europe had instead achieved autarky in energy supplies, they would not have to care what the Russians think, as it is now though, they do. The same could be said for food crops. It is not always about what would make the most money or what is the most efficient way of doing things.
I had never heard the word “autarky” before so I'm glad you used it so I could learn about it. With that said I will have to disagree with your economic philosophy on a few levels. In theory, the concept of being self-sufficient is of course good; one controls one's own destiny and as you point out, one isn't held “hostage” by foreign monopolies or quasi-monopolies on resources. But in practice, increasingly complex societies and economies inevitably need varieties of goods and services that cannot be efficiently produced domestically. Subsidies manipulate supply and demand curves and thereby thwart the efficient allocation of goods. Those suppliers in the global marketplace that can produce and sell at lower prices are not “rewarded” with increased demand for their product. The people who are negatively affected by this are the international suppliers, who can't sell their goods; the domestic buyers, who can't buy goods at a cheaper price; and the nation providing the subsidy (more accurately, their taxpayers) that funds the subsidies. The only people that really “win” here are the recipients of the subsidies.With the Russian situation, it seems that Europeans should look for other suppliers so that they don't receive their resources from a single source. They may have to pay more from a different source, but they would not run into quite the same problem they see now. And supply and demand is a two-edged sword, and so just as Russia may “control” a source of energy, Europe funds Russian wealth. If Europe were to take its business elsewhere, Russia would be faced with the prospect of dwindling income. Would that get Russia to play fair? Probably.
I am not advocating complete autarky. I only think it should be a goal on things essential to life, in today's world energy supplies are a necessity. I have several ideas on how Europe could achieve energy self-sufficiency, the biggest of which is increased reliance on nuclear power coupled with increased research into alternatives. That would go for the States as well. There are some things that supply and demand should not totally control. But you are correct that if you look at it simply from a money perspective, the recievers of subsidies are the only ones who benefit. However, when that subsidised commodity is needed in a crisis and the homeland is able to provide it because of subsidies, people will certainly be glad that subsidies existed.
This would give those poor nations hundreds of millions of dollars in revenue. Mind you, these are the same Third World countries that we give hundreds of millions of dollars in foreign aid to anyway.
What about situations where other countries are exploiting or stealing another country's natural resources. So much for the free market. :- What do you do about that? IMO there's no alternative but to send aid for security/peacekeeping/humanitarian crisis reasons.
What about situations where other countries are exploiting or stealing another country's natural resources. So much for the free market. :- What do you do about that? IMO there's no alternative but to send aid for security/peacekeeping/humanitarian crisis reasons.
Do you mean countries that are being exploited for their natural resources? If so, that sounds like a sovereignty issue and would require a solution beyond economic policy. And temporary aid for humanitarian emergencies is commendable and IMO morally imperative in certain cases. It's not that foreign aid for economic help is necessarily bad, it's just that we behave according to free market principles, get the same (or better) net result, and save our own taxpayers' money. We give hundreds of millions on an annual basis to nations which are in need of help. What I argue here is that we can help them by allowing them to compete in the international marketplace and sell their products at better prices, and grow in wealth at the same time. I know of a possible other explanation as to why the U.S. does provide subsidies to U.S. farmers, one which I haven't brought up yet.BTW, did you ever mention what the percentage was?
