Written by: Eugene Steuerle
In a recent Economist broadcast, Elon Musk claimed that his decimation of the United States Agency for International Development (USAID), along with the firing of thousands of its employees, caused “zero” deaths. By contrast, a Harvard study by epidemiologists found that this policy, by halting supply chains for malaria prevention, HIV treatments, and tuberculosis, among other consequences, has led to hundreds of thousands of deaths. And there are more to come. Backing up this statistical analysis, New York Times opinion columnist Nicholas Kristof has also visited and documented individual cases of people dying because of the Musk and Trump decisions.
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I want to turn to a second element of Musk’s claims… that individual philanthropy could easily fill the gap. He’s offering a classic legal defense spoof: he didn’t harm anybody; they would have died or suffered anyway; and, besides, somebody else would provide the doctors, drugs, and food that he took away. One is also reminded of C.S. Lewis’s “proof” that we all have moral consciences. Otherwise, why do we always try to rationalize and justify any wrongdoing?
For now, ignore how the long-term damage to the nation’s reputation increases the likelihood of future, expensive military and diplomatic confrontations. If the claim is correct that charity can easily displace government efforts, then perhaps the long-term consequences for individuals of abandoning these government efforts might be minimized. In some ways, this debate echoes one that arose repeatedly during the Reagan Presidency about the extent to which government social welfare policy displaces charitable giving.
Back to Kristof. Those familiar with his writings know that he not only looks to government failures but often appeals to individuals to contribute to various causes, both abroad and at home. He’s not arguing that government displaces charity or vice versa, but that both government and charity can do more good.
Numbers largely resolve this second debate, as well, in Kristof’s favor. The bottom line is that needs are great. While we could do much, much more as individuals to meet those needs, charitable giving does not operate at a level that could displace more than a small fraction of existing government social welfare efforts. The U.S. level of individual giving is among the highest among all developed nations, yet even it is a minuscule portion of the revenues that government collects.
In the U.S., federal spending directly on individuals, such as welfare, Social Security, and healthcare, hovers around 16 percent of GDP. When other federal and state payments, such as 5 to 6 percent of GDP for education, are included, the total easily reaches one-quarter of GDP or more, depending on how public goods are classified. Meanwhile, charitable giving by individuals has hovered around 2 percent of GDP for a long time, though volunteer labor adds to that total.
Foreign assistance provided by the government is only a tiny fraction of the government budget, formerly about 1/5th of 1 percent of GDP, or 1 percent of federal outlays, but plummeting under Musk and President Trump. Only about one-half of that number, or 1/10th of 1 percent of GDP, went to the Agency for International Development in the years preceding the Trump Presidency. Private individual giving going overseas, in turn, is roughly at that aggregate level, though it comprises only about 7 percent of individual giving.
Interestingly, the large increase in the size of the government social welfare budget since the mid-20th century has not displaced private giving so much as shifted it. In healthcare, for instance, we rely much more on government for healthcare through programs like Medicare and Medicaid. Still, the relatively constant 2 percent of income given to charity over that period tells us that people give larger shares of what they do give to, say, health research or food assistance.
Government and charities often complement or supplement each other, filling gaps in areas of mutual interest. The U.S. tax system subsidizes charitable giving, and governments often turn to charities to administer their programs. At times, the two sectors also act as adversaries. Autocratic governments attack NGOs (non-governmental organizations) as usurpers in state-level activities, while governments everywhere try to weed out corruption within charitable organizations. See, for instance, Dennis Young’s and John Casey’s classic discussion of how nonprofits and government interact.
Both sectors have many limitations. Governments must rely on enforcement to collect the taxes that fund their social policies and foreign assistance. At the same time, even the largest charities and foundations operate on a much smaller scale and tend to act parochially, serving specific causes or needs, regardless of how pressing other needs may be. Given that the government’s social welfare spending is more than ten times total charitable contributions, it is not surprising that as many charities try to scale up, they seek government help, directly or indirectly, to fulfill their missions.
Taken together, the evidence overwhelmingly supports Kristof and opposes Musk. So why all this effort to cut back on the work of agencies like USAID? Its annual costs pale in comparison to the nearly $1 trillion Defense Department budget request for 2026 and even fall substantially short of the nearly $90 billion (and counting) that President Trump says is needed for emergency supplemental funding, primarily to finance his military conflict against Iran.
At the domestic political level, the rationale is almost entirely performative. It creates a pretense of control over the budget, even as the Administration’s total efforts lead deficits to balloon to all-time, non-recessionary highs. Indirectly, it appeals to our sense that other, generally unworthy people can pay to solve our common problems, a notion reinforced by the misconception that attacking smaller programs like foreign aid is all that is required. Perhaps most dangerous of all, the hoax further contends that we bear no responsibility for the costs to others, including our own succeeding generations, who must now conduct foreign affairs as an untrustworthy actor rather than a reliable friend.
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