Trump Freezes Foreign Aid Frauds

by James Bovard, Libertarian Institute January 29, 2025

The  Trump administration suspended top officials at the U.S. Agency for International Development earlier this week. The move, labeled a “Monday afternoon massacre,” was spurred by allegations that top USAID officials were circumventing President Trump’s ninety day freeze on foreign aid disbursements. Rep. Gregory Meeks (D-NY) howled on Twitter that “Trump decimating USAID’s leadership without cause is all harm & no benefit for our national security.” But the sordid record of failed aid programs doesn’t support his caterwauling.

Foreign aid has long been the incarnation of American benevolence—at least according to the Washington elite. But presidents have sporadically conceded otherwise for more than sixty years. President John F. Kennedy promised “a dramatic turning point in the troubled history of foreign aid” in 1961. Didn’t happen. Twenty years later, President Ronald Reagan declared, “Unless a nation puts its own financial and economic house in order, no amount of aid will produce progress.” I bashed Reagan’s failed policies in a 1986 New York Times piece that labeled foreign aid “the opiate of the Third World.” In 1989, an USAID report conceded that foreign aid had been a dismal failure and urged a “radical reshaping” of U.S. assistance. No such luck.

In a 2010 United Nations speech, President Barack Obama promised to “change the way we do business” with foreign aid, pledging to judge aid programs and budgets “based not on dollars spent, but on outcomes achieved.” The Los Angeles Times noted that Obama’s “aides said the United States in the past has often seemed to just throw money at problems.” The following year, USAID ballyhooed a new evaluation policy for a “transformation based on absolute demand for results.”

But any “absolute demand for results” was obliterated by Obama’s 2008 campaign pledge to double foreign aid. As the The Christian Science Monitor noted, USAID “created an atmosphere of frantic urgency about the ‘burn rate’—a measure of how quickly money is spent. Emphasis gets put on spending fast to make room for the next batch from Congress.” Martine van Bijlert of the nonprofit Afghanistan Analysts Network commented, “As long as you spend money and you can provide a paper trail, that’s a job well done. It’s a perverse system, and there seems to be no intention to change it.” Rep. Raul Labrador (R-ID) was chagrined in 2011 when he visited Afghanistan and spoke to USAID officials: “When we asked what were your results, the answer was the result was we spent X amount of money. That is all they knew, how much money had actually been spent.”

One American contractor received $35 million to promote the rule of law in Afghanistan in part by distributing kites and comic books to kids. The New York Times reported that the contractor “arranged an event to hand out kites and comic books to children. The kites were festooned with slogans about gender equality and rule of law that most of the attendees could not read. Police officers guarding the event stole many of the kites, beating some of the children, while fathers snatched kites from their girls to give to the boys.” A 2015 report by the Special Inspector General for Afghanistan Reconstruction (SIGAR) report found that the billion dollars the U.S. government spent on “rule of law” and justice reform programs in Afghanistan had been an utter failure. The “burn rate” fixation produced endless absurdities, including collapsing schools, impassable roads, failed electrification projects, and non-existent phantom health clinics aside from the revival of the Taliban.

“Fail-and-repeat” was also USAID’s motto in Iraq. After the 2003 invasion, USAID and the Pentagon paired up to spend $60 billion to rebuild Iraq. As long as projects looked vaguely impressive at ribbon-cutting ceremonies, USAID declared victory. Rep. Jason Chaffetz (R-UT) listed some of the agency’s farcical Iraq success claims at a 2011 hearing: “262,482 individuals reportedly benefited from medical supplies that were purchased to treat only 100 victims of a specific attack; 22 individuals attended a 5-day mental health course, yet 1.5 million were reported as beneficiaries…and 280,000 were reported as benefiting from $14,246 spent to rehabilitate a morgue.” Ali Ghalib Baban, Iraq’s minister of planning, denied in 2009 that U.S. aid for relief and reconstruction had benefited his country: “Maybe they spent it, but Iraq doesn’t feel it.” The Center for Public Integrity reported that, according to top Iraqi officials, the biggest impact of U.S. aid was “more corruption and widespread money-laundering.” Unfortunately, corruption has long plagued foreign aid around the globe.

Some foreign aid programs are designed almost solely for bragging rights. The United States launched the Food for Peace program during the Dwight Eisenhower administration largely to dispose of embarrassing crop surpluses spurred by lavish subsidies. In the 1950s and 1960s, massive U.S. wheat dumping in India disrupted India’s agricultural market and bankrupted thousands of Indian farmers. In 1984, George Dunlop, chief of staff of the Senate Agriculture Committee, told me that American food aid may have been responsible for the starvation of millions of Indians. The U.S. government was often angry at the Indian government because of its pro-Soviet leanings in the Cold War. In a secret White House tape in 1971, President Richard Nixon declared that “the Indians need—what they really need is a mass famine.”

After President Bill Clinton sent U.S. troops to re-install Jean-Bertrand Aristide as Haiti’s ruler, Aristide agreed to end Haitian tariffs on rice imports. Heavily subsidized U.S. rice soon flooded the country and bankrupted legions of Haitian farmers. In 2010, Clinton publicly apologized for the devastating impact: “I have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people, because of what I did.” After a 2010 earthquake, the United States and other nations deluged the island with free food, profoundly disrupting local farm markets. Two months after the earthquake, Haiti’s President Rene Preval pleaded to the U.S. government to “stop sending food aid, so that our economy can recover and create jobs.” (The U.S. refused to stop.)

In 2016, the United States dumped more than a million pounds of surplus peanuts on the island, threatening the livelihoods of a 150,000 Haitian peanut farmers. Sixty humanitarian and activist organizations warned that of “a series of devastating consequences,” an Haiti’s largest rural organization denounced the peanut donation as “a plan of death” for the country’s farmers. Raymond Offenheiser, the president of Oxfam America, complained, “USDA has not done any market analysis in Haiti to ensure that this project does not interfere with local markets.” Protests did not deter USDA’s peanut deluge.

Foreign aid bureaucrats apparently vow to never learn from mistakes. SIGAR “found a USAID lessons-learned report from the 1980s on Afghan reconstruction but nobody at AID had read it” after the 2001 invasion. In 1982, USAID’s incorrigibility spurred a sardonic Government Accountability Office report title: “Experience—A Potential Tool for Improving U.S. Assistance Abroad.” A 2009 USAID report found that evaluation of U.S. foreign aid programs “rarely assesses impact, lacks sufficient rigor, and does not produce the necessary analysis to inform strategic decision making.” A 2013 Congressional Research Service report lamented that many USAID staffers “are reportedly defensive about evaluation, concerned that evaluations identifying poor program results may have personal career implications, such as loss of control over a project, damage to professional reputation, budget cuts, or other potential career repercussions.” One USAID bureaucrat bluntly admitted, “If you don’t ask [about results], you don’t fail, and your budget isn’t cut.”

Foreign aid has been incorrigible since long before most of the readers of this article were born. Happily, the Trump administration is not repeating the “free market pipe dreams” used to justify foreign aid handouts in prior Republican administrations. Both the Reagan and the George W. Bush administration pretended that they could bribe foreign governments to reduce their idiotic economic policies. Foreign aid is failing in our times for the same reasons that I laid out almost forty years ago in The New York Times:

“Every time a third world politician says something nice about free enterprise, it seems to cost American taxpayers another $10 million in foreign aid. We are squandering billions annually, and often do more harm than good to the world’s poorest. Some countries simply refuse to tell us how our foreign aid donations are used—yet keep getting more money or free food year after year. A country virtually has to declare war on America to  be declared ineligible for more aid.

The vast majority of foreign aid goes to foreign governments. Yet, strong, arbitrary and interventionist governments are the third world’s largest curse. Third world governments could not have become so strong without foreign aid—and could not maintain their stranglehold over the economy without constant injections of further aid.        

If governments were following sound economic policies, they could readily attract foreign investment and loans. If they are busy scuttling their own economies, no amount of handouts will save the day.”

Hopefully the Trump administration will extend the ninety day freeze on foreign aid disbursements until the end of his presidency. American taxpayers should no longer be vexed to pay for boondoggles anywhere on earth. Ending foreign aid will also be a huge step to curbing American meddling around the globe.