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Ron Paul is currently taking a lot of heat for his position on Foreign Aid. Quite simply, he can't justify giving away American dollars abroad when we are having so many financial difficulties at home. His enemies have labeled him an "isolationist". The term itself conjures up fears of a new Neville Chamberlain who permitted the expansion of the Nazi empire in Europe through his appeasement Adolf Hitler.
The fact of the matter is that foreign aid is why Hitler came to power in Germany. The United States went heavily into debt during World War I: "America had loaned Allies during and after war a total of $11 billion. Great Britain proposes canceling reparations debts if U.S. will cancel Great Britain's $4 billion debt. U.S. refuses." (Source) Most Americans felt World War I was responsible for the Great Depression and resented their country's involvement. (Ibid)
The fact of the matter is that they were right. Wilson had promised Germany "Peace without Victory". Instead, Germans ended up with the Treaty of Versailles and massive war reparations to England and France, without any real way to pay them. The Treaty dismantled their industrial and economic base, and ultimately destroyed the German economy.
The fall of the Weimar Republic was the result of World War I and the Treaty of Versailles. The Treaty was the result of American Foreign involvement. Prior to U.S. involvement, the "Great War" was a stalemate. This was evidenced by the fact that both German and Allied armies were locked in trench warfare in France. Neither could make any progress against the other.
If the United States had not intervened, both Germany and the Allies would have been forced into a treaty and the war would have come to an end. Because of U.S. intervention, Germany was captivated by revenge and the doctrines of National Socialism.
If Germany had retained its pre-war status, the European economy would have continued to boom and America would have benefitted from another trading partner for its agricultural and manufacturing products.
The other consequence of U.S. intervention was the destruction of the Russian Czar and the creation of the Communist nightmare. Germany would have sued for peace with Russia, and the platform for the Communist revolutionaries would have been undermined.
Now, the United States, like the former Soviet Union, is on the verge of a global collapse. The billions it has spent on foreign aid will not be reciprocated by countries looking for a new benefactor. American influence will die with the American dollar and our dollar diplomacy. He who has the gold makes the rules and the United States is broke.
With many enemies and few friends, this is the recipe for disaster. No wonder George Washington wanted the United States to avoid expensive foreign alliances. Eisenhower warned us about the greed of the military-industrial complex. Ron Paul is right, but his policies should have been adopted more than a century ago.