TIME: Almanac 1995

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<text id=90TT1909> <title> July 23, 1990: America Abroad </title> <history> TIME--The Weekly Newsmagazine--1990 July 23, 1990 The Palestinians </history> <article> <source>Time Magazine</source> <hdr> WORLD, Page 35 AMERICA ABROAD Uncle Sam as Tightwad </hdr> <body> By Strobe Talbott At the economic summit in Houston, the West Europeans proposed aid to the Soviet Union and restrictions on greenhouse gases. Their American hosts privately grumbled about how expensive those proposals were, then publicly resorted to the oldest cop-out in the book--form a committee and study the problem. The U.S. has a new motto: better to buy time than spend money, and if someone has to pay, better it be someone else. That's why the Germans and the Japanese, with their deep pockets, are particularly welcome at gatherings like last week's. George Bush's presidency was only a few minutes old when he said, in his Inaugural Address, "Our funds are low. We have a deficit to bring down. We have more will than wallet." The poor-mouthing has not stopped. A year ago, Bush visited Poland to applaud reform there. Solidarity wanted $10 billion in Western aid. Bush responded with a little more than $100 million, or about 1 cents per dollar requested. "That's all we can afford," explained the leader of the free world and the richest nation on earth. Once the foremost dispenser of largesse to poor countries, the U.S. has fallen behind Japan in total assistance. When foreign aid is measured as a percentage of gross national product, the U.S. is the least generous of all the advanced industrial democracies. To its credit, the Bush Administration has been trying to foster prosperity, democracy and political stability in a number of Latin American nations by relieving some of the debt they owe foreign banks, many of them in the U.S. But rather than ponying up additional dollars to underwrite the loss to the lenders, the Bush Administration is asking Western Europe, Japan and international financial institutions like the World Bank to foot the bill. So far, Japan is the only country willing to come up with new money. No wonder the debt-relief scheme that seemed so promising a year ago is turning out to be a disappointment for all concerned. Last month Bush gave a stirring speech about the need for "a new economic partnership" in the western hemisphere and announced an initiative to improve the climate for private investment throughout Latin America. Once again, however, the numbers did not match the rhetoric. The plan obligates the U.S. to contribute a mere $100 million. That's about one-fifth the cost of the damage done to Panama's economy by looting in the wake of the U.S. invasion last December. "When you look at what the Administration is doing compared with what it's saying, you've got to ask, `Where's the beef?'" says C. Fred Bergsten, director of the Institute for International Economics in Washington. "There's a pattern here: the right policies keep coming up short because they're so woefully underfunded." Part of the reason for the parsimony, as Bush said in his Inaugural, is the federal deficit. The U.S. is going to have to reduce its own indebtedness before it can adequately address the needs of Poland or Mexico. The President has finally acknowledged that shrinking the deficit will entail raising taxes. The U.S. has the lowest tax level of any country among the seven represented in Houston last week. That is a distinction that should inspire neither pride nor optimism in Americans. They will end up with the foreign policy they deserve--which is the one they are willing to pay for. It won't be possible to remain a superpower on the cheap. If the U.S. lets other countries control the purse strings of international development, the reins of leadership will inevitably also pass into other hands. </body> </article> </text>