How Much Does Uncle Sam Spend on Foreign Aid?

MAKING SENSE -- February 1, 2012 at 2:41 PM EDT

How Much Does Uncle Sam Spend on Foreign Aid?

NewsHour image by Vanessa Dennis. Sources: State Department, USAID

Paul Solman frequently answers questions from the NewsHour audience about business and economic news on his Making Sen$e page. Here's Wednesdays query:

John E. Tucker asks: Could reducing U.S foreign aid be used to help the Department of Defense reduce military spending?

Paul Solman Thanks for the question, John. Recently, an educated friend brought up this same shibboleth. In fact, foreign aid represents, by the most generous estimate, about 1 percent of the U.S. budget. And by the way, much of it is defense spending: it's simply for the direct defense of countries other than the United States. For example, we give more than $1 billion a year in "foreign aid" to the Egyptian military.

By contrast, official U.S. defense spending amounts to nearly 20 percent of the U.S. budget. Reducing foreign aid even to the vanishing point, in other words, wouldn't go very far in reducing military spending.

This entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions. Follow Paul on Twitter.

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