Editor’s note: This article is taken from Libertarian Institute Managing Editor Keith Knight’s opening statement from a June 28 debate on Zerohedge with Mike Benz and Cenk Uygur. 

When I say American foreign aid, I am generally referring to resources given or lent by the United States government to a foreign government or group of persons in another country.

I want to make the case that all foreign aid should be abolished.

According to ForeignAssistance.gov, as of June 13, 2025, the U.S. government has over $100 billion in foreign aid obligations, consisting of more than 20,000 activities taking place in 205 countries, primarily Ukraine, Israel, Egypt, and Jordan.

According to Pew Research, the American government spent $1.07 trillion on Foreign Assistance between 2005 and 2024.

Foreign aid allows the U.S. government to unilaterally put obligations on their domestic population, us, and use those funds to increase their power and social standing in other parts of the world.

The essential issue with government provision of foreign aid, is the creation of the service/payment split.

The people who provide the “service,” don’t have to answer to those paying for it.

In the case of foreign aid, there is a split between those who pay (taxpayers), those who provide the service (politicians and NGOs), and those who receive the “service.”

In short, those who have the power to control foreign aid funds, do not face the discipline necessary to provide high quality services at a reasonable cost, since the people paying for it do not have a recognized right to stop paying if they don’t find value in the project.

This would be the equivalent of saying Blockbuster, Myspace, Sears, Toys R Us, and Borders could have resolved their business issues, if only they had access to the funds of involuntary investors known as taxpayers.

Instead of companies getting money by meeting consumer demand, foreign aid encourages companies to reallocate scarce resources towards complying with the desires of politicians, or in the words of Michael McClintock, these funds turn entrepreneurs away from pleasing consumers, and into “Instruments of Statecraft.” 

Not only do politicians with access to trillions of dollars not face the necessary incentives to provide quality aid, but they lack the knowledge of how and where to spend money effectively.

According to the Center for Global Development, total aid given to Africa from wealthy countries since 1960, comes to $4.7 trillion in 2013 prices.

Even if politicians really wanted to bring democracy and prosperity to Syria, Yemen, Libya, and Ukraine, they don’t know how countries become prosperous.

If they had such knowledge, we wouldn’t see the homelessness and poverty that could be found in many areas of the United States, an area where these same U.S. politicians have much more control and influence.

The American people also directly bear the cost of these expenditures.

When the government does not have enough money to fund foreign activities through taxing their domestic population, they issue Treasury notes, often purchased by the Federal Reserve, who then prints the money, and increases the amount of dollars in circulation.

Increasing the supply of money, by trillions of dollars over decades to fund foreign activities, results in each dollar Americans hold in their savings accounts being worth less than it otherwise would have been, leading to the inflated prices Americans experience today.

Notice, foreign assistance is not a neutral tool that can be used for good or evil, but a structurally unsound way to achieve national security or economic growth.

Consider another unintended consequence of foreign aid.

Lawrence Wright wrote a book in 2006 titled, The Looming Tower: Al-Qaeda and the Road to 9/11, from page 307:

“On April 11, 1996, when [Muhammed] Atta was twenty-seven years old, he signed a standardized will he got from the al-Quds mosque. It was the day Israel attacked Lebanon in Operation Grapes of Wrath. According to one of his friends, Atta was enraged, and by filling out his last testament during the attack he was offering his life in response.”

When politicians have access to hundreds of billions of dollars, they do not have the knowledge or incentive to make sure these funds are used in such a way that keeps Americans safe.

Consider the words of the U.S. Assistant Secretary of European and Eurasian Affairs Victoria Nuland in December of 2013, “We’ve invested over $5 billion to assist Ukraine in these and other goals that will ensure a secure and prosperous and democratic Ukraine.”

American politicians should not have the capacity to spend billions of dollars, considering their previous pet projects have resulted in tremendous devastation.

To summarize my position: Foreign aid allows politicians to spend the money Americans work for, with virtually no accountability and voters do not have the time or mental bandwidth to pressure politicians into spending the money in a desirable manner; therefore, reforming foreign aid is a fool’s errand because it empowers people without the knowledge or incentives necessary to achieve their goals.