Unreturned

I was listening to the Altruism After USAID episode of Slate Magazine's Money Talks podcast a few days ago, and the guest, NPR's Mary Childs made the point that in the wake of USAID halting disbursements to non-governmental organizations and the like, that the money being withheld couldn't be replaced by philanthropic organizations.

My first thought that this was a matter of will. After all, if the United States government was no longer paying to fight malaria, and instead giving the public tax cuts, nothing stops that selfsame public from deciding to donate the savings to charities and keep the programs funded. The Trump Administration and Elon Musk's DOGE operation targeted USAID because they understood that many Americans feel poor enough that they resent the government giving money to ameliorate the problems of people far away.

But a moment's further thought put that idea to bed. After all, the federal budget isn't balanced; it's propped up by some pretty serious borrowing from global capital markets. Of course, people expect that the United States is good for it, which is why the government can borrow at favorable rates, but it's debt all the same.

And that's really the part that private philanthropy cannot replace. No rational lender is going to loan a charity several millions (or perhaps even tens of thousands) of dollars to save lives in third-world countries. Because there's no profit in it. Not even China, which makes a big deal out of its investments in poor nations, is doing so out of generosity; they expect a positive return, and when nations start defaulting on payments, China is going to start claiming assets as collateral. Charities, more or less by definition, don't impose repayment terms that entail seizing what few assets poor nations still have.

Given the fact that the United States borrows simply to keep the lights on and doors open towards the end of the fiscal year, some amount of the funding that USAID was providing was in the form of money borrowed from elsewhere. Specifically because poor countries tend to be bad investments, for any number of reasons.

Perhaps it's time that this was more openly acknowledged. There's nothing wrong with the understanding that, as a wealthy nation, the United States has an obligation to alleviate poverty in other parts of the world. And it's true that many Americans overestimate (sometimes wildly) the amount of money that goes into such philanthropy, as a proportion of their annual taxes. Still, this is part of what representative government is all about; having to make the case to the people who will be, ultimately, footing the bill.