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From The Atlantic, Do Americans Know Anything About the Budget?

Americans are famous for overestimating our international aid. One study found that the average American estimates that a quarter of the budget — more than Social Security, or Defense — goes to aid abroad. This is why, when asked about cutting the deficit, an outsized number always suggests that we should immediately start slashing foreign aid to save money. Of course, this would be a bit like wiping your brow with a kerchief to fight a fever. Aid is less than one percent of our total budget, but three-fourths of Americans in the Zogby poll think it’s at least six times higher.

Please choose the answer that you believe comes closest to the percentage each represents of the current federal budget.

U.S. Adults Estimates Of Federal Budget Expenditures

I don’t know the aid sector very well, but these findings jive with my personal experience — that Americans in general think we’re much more generous than we are. The fact is that when you consider that per capita foreign giving in the U.S., or aid as a percentage of yearly wealth accrued, we don’t come out all that impressive.

Net official development assistance in 2008 as percent of gross national income

The metric used above, official development assistance (ODA), includes contributions of donor government agencies to developing countries. Private flows are not included, but there is no evidence they make us look less stingy. As Steven Radelet reported in Foreign Affairs in 2005:

“America Is the Most Generous Country in the World if You Include Private Donations to Charities.”

No … Combining public and private donations puts total U.S. development assistance in the range of $35 billion per year, or about 0.32 percent of U.S. income. In other words, for every $3 of income, the United States provides about one cent in development assistance. Even with this broader measure (and using the larger estimate of U.S. private assistance without making a similar adjustment for other countries), the United States ranks, at best, 15th among the top donors.

Moreover, much of our official development assistance goes to prop up our military allies in troubled areas. William Easterly and Laura Freschi produced the graph below on the militarization of United States foreign aid. They also write:

…[E]nervated development loses to pumped-up defense, and not just in Afghanistan and Iraq. The trend goes two ways: USAID is compelled to spend more and more of its budget on states that are strategically and militarily important (The 2011 foreign aid budget allocates 20 percent of State and USAID money for “securing frontline states.”) A development priority like India (with a huge chunk of the world’s poor) loses out. At the same time, a growing proportion of what the US calls Official Development Assistance flows through the Pentagon rather than USAID.

All U.S. aid by recipient, 2004-2008, O.E.C.D. data

In fairness, Americans come out better when generosity is measured on other metrics. As Daniel W. Drezner writes:

This does not mean that the United States is particularly stingy on other dimensions of helping the poor. The Ranking the Rich exercise included aid as only one of seven components — the others are trade, investment, migration, environment, technology, and security. When you aggregate the different components, the U.S. comes in at 7th out of the 21 countries (intriguingly, among the G-7, the Anglosphere countries — Great Britain, Canada, and the U.S. — come in at 1-2-3). It turns out that the U.S. is comparatively more generous on other dimensions

My personal take on all this is that I wish we (as Americans) were a little more honest and informed about our own generosity. So many issues in reality are battles between divergent camps on the issue of redistribution. Health care, for example, is “less a pure macroeconomic issue than an exercise in the political economy of sharing.” (See my older post here to see what I mean.) But how can we have a real discourse if we aren’t critical about our own sharing?