Does Your Social Security Check Perpetuate Global Poverty?

MarkThoma is outsourcing criticism of a recent argument from Jim Kolbe entitled Baby-boomers threaten the war on global poverty that starts with some good news:

Opponents of global poverty have reason to celebrate. The recent approval by the US Food and Drug Administration of a new, once-a-day pill against Aids could revolutionise health in developing countries. The news follows approval earlier this year of a cervical cancer vaccine, which may save more than 200,000 lives each year in poor nations. In the US, these breakthroughs have coincided with unprecedented political support for the funding that pays for such medicines. Last year the House of Representatives passed its foreign aid bill with 393 votes, the highest tally in more than two decades. Over the past six years, the US has increased six-fold the money it spends to fight scourges such as Aids and tuberculosis abroad.

Kolbe’s good news is life science companies have made some breakthroughs in how we treat aid – followed by a statement that our generous Congress has decided to partially offset some of the monopoly profits that Big Pharma makes on these breakthroughs.

What seems to have Mark objecting to Kolbe’s argument is the following:

But the heights America has reached in such spending may represent the peak of foreign aid, leaving only a hard fall ahead. As the baby-boomer generation ages and begins to draw on Social Security and Medicare, the healthcare system for the over-65s, the funding needs for those programmes will skyrocket. Something else in the budget will have to make way – and America’s foreign aid programme is one of the likeliest candidates for cuts.

Good grief – we spend $27 billion on foreign aid as we have been running a General Fund deficit near $600 billion per year. That $27 billion is tiny compared to the fact that world population is over 6 billion. Wow – $4.50 per person per year is not exactly going to solve world poverty. As far as Social Security benefits, let’s remember that the Social Security Trust Fund is running a surplus that will allow it to have enough reserves to cover benefits through around 2050. Yes, it was a combination those Bush tax cuts, K-Street driven pork barrel spending, and an expensive and reckless adventure into Iraq (which has something to do with all that current anger in the Arab streets at U.S. foreign policy as we make a mockery out of Lebanon) that is driving the massive General Fund deficits. As Mark rightly puts it:

setting world poverty versus “financing the lifestyles of retired Americans” is a false and misleading tradeoff designed to achieve the political goal of reducing the size of government … We can handle the current 20 -30 billion we spend on foreign aid going forward.