If there is anything we have learned from the American welfare state it is that from the very beginning it created a moral hazard problem whereby paying people for not working incentivizes them to drop out of the workforce and remain impoverished. It’s called “the welfare trap.” Much of so-called “foreign aid” is no different; it is just the internationalization of the welfare trap. Many clear examples of this are provided by David Osterfeld’s book Prosperity versus Planning: How Government Stifles Economic Growth. For example, after the U.S. government “acquired” Micronesia at the end of World War II “the people of Micronesia … Continue reading →

Source: ‘Foreign Aid’ Enriches the Rich While Impoverishing the Impoverished – LewRockwell