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How much are we giving to Asia? Nothing, really

Whether the United States is doing enough financially to help the victims of the Asian earthquake and tidal wave is the subject of much debate around the world and at home.
President Bush's initial pledge of $15 million from the U.S. government was recognized as puny, and he quickly raised it to $350 million while asking his father, the former president, and former President Bill Clinton to help raise relief money from the public. This week relief money being raised by U.S. charities was estimated to be nearing $200 million. And then there is the enormous contribution of the U.S. military ships, helicopters, transport planes, and soldiers sent to the disaster area to rescue survivors and deliver relief. That will bring U.S. contributions to more than a billion dollars.

While this might seem pretty respectable and while the empathy of Americans cannot be doubted, U.S. financial efforts in Asian disaster relief are an illusion.

For the United States has been for years now the biggest international debtor, borrowing for mere consumption, rather than capital growth, what is estimated at 80 percent of the world's annual savings. Indeed, just during the week of the Asian disaster, the Federal Reserve reported that foreign central banks purchased another $5.6 billion of U.S. government debt. That is, in just one week the United States took from the rest of the world more than five times as much as the country is likely to provide for Asian disaster relief.

It might be different if this debt was going to be repaid soon, but it will not be. U.S. debt has risen beyond any chance of repayment because the U.S. government and Americans generally have discovered that the world's reliance on the U.S. dollar as the only international reserve currency -- the currency in which most trade is conducted -- allows the United States to levy a huge tribute on the world. Foreign central banks have been buying U.S. government debt only to keep trade going and to avoid devaluation of their dollar reserves.

Even so, the rest of the world seems to be realizing that it may be possible to conduct international trade without paying such a heavy tax to the Americans. The European Union has issued its own currency, the euro, whose role in international trade is increasing, while there is talk of creating Asian and Islamic currency blocs. As the rest of the world starts moving away from the dollar, Americans will have to start pulling their own weight again.

In any case, the only mathematically correct answer to how much the United States is contributing to Asian disaster relief is: nothing, really. For everything the United States is giving has been borrowed from foreigners.


add a comment on this article

mark my words: 10.Jan.2005 15:45


350 million dollars four 4 countries VERSUS 2 billion dollars for 1 (!) stealth bomber

That's not true, please read.. 10.Jan.2005 16:37

consider this.

We are borrowing the $350+ million from Asia, actually the Chinese in the form of treasury notes they purchase from us. The will get intrest payments for years, and that $350 million dollar investment they made will make them 3 trillion over the next 25 years or so.

So if you think about it we are giving Asia 3 trillion dollars because we are too self centered, childish, and stupid to know any better.

Plus 10.Jan.2005 20:27


Wait, there's more: Asia is made up of many autonomous nations. The fact that China, Japan and Singapore have bought massive amounts of US bonds, has nothing to do with aid to Indonesia, Sri Lanka, Thailand and India, not only for the reason stated by the above poster, but also because these are all seperate countries with their own economies, governments and interests. My goodness they even speak different languages. And some of them even hate each other!

I think it will be iteresting though to see if Bush's pledged $350 million will include the money that Clinton and Bush Sr. drum up from private donors, as well as the money that Americans have already given out of the goodness of their own hearts. We didn't really need the two ex-presidents to put their "brand" on donations that we would have made anyway, right? True, whether it comes from the government or from our own pockets, it still technically comes from our own pockets, but there is something shady about the government taking credit for personal and corporate donations. It seems plausible this might be a tactic to look good while saving money. After Bush pledged a load of money to NYC for the 9/11 destruction, he tried to deduct the insurance money collected from the total he pledged, right? Don't know what happened in the end with that. But it is a pattern with Bush to pledge a lot of money and take the credit for the generosity, but later attach all kinds of conditions and make deductions etc.