Most of you remember the American Recovery and Reinvestment Act of 2009. You remember all those “shovel ready” projects that would pull us out of the recession? It seems that Congress loves the word “recovery” when it comes to writing legislation.

On this date in 1948, President Harry Truman (above) signed “The Marshall Plan” also known as the European Recovery Program, ERP that provided $5 billion in aid to help rebuild 16 European countries devastated by World War II and to halt the spread of Soviet Communism.

Rebuilding Europe

The European Union is the second largest GDP on the planet next to the US. The Marshall Plan was the beginning of that 50-year growth. The plan was simple — rebuild war torn Europe, remove trade barriers to improve commerce between countries, modernize industry, and create a prosperous Europe.

Bipartisan Plan

During the plans inception, the Republican held the house and Senate and Democrats had the presidency. Even so, the plan received much bipartisan support from Congress to eventually approve the plan.

The Marshall Plan is named after then Secretary of State George Marshall. Several committees came together to bring the plan to fruition. Senator Arthur H. Vandenberg, chairman of the Senate Foreign Relations Committee lead the charge along with help from the Brookings Institution, and State Department officials William L. Clayton and George F. Kennan.

Big Bucks Were Spent

Aid was offered to the Soviet Union and its allies, but they declined help because they didn’t relish the idea of America overseeing their Communist economy.

The US spent $15 billion in Europe before the start of The Marshall Plan and an additional $15 billion during the Marshall Plan. This is an astounding sum when you consider that the entire GDP of the US at the time was only $258 billion dollars. In 2013 dollars we’re talking $148 billion due to inflation.

Everyone Wants A Piece Of The Pie

As you can imagine when the US offered this help everyone showed up with hand and plus their conditions. Sixteen nations met in Paris to divide up the American money pie.

France was concerned Germany might regain it’s former strength if given too much help. Belgium, the Netherlands and Luxemburg depended on the German economy for their markets so they favored a strong Germany.

Sweden and other Scandinavian nations didn’t want any trade relations with the Eastern Bloc nations damaged and also that their neutrality be kept in tact.

Some Final Thoughts

We (the United States) are often raked over the coals because of the massive foreign aid we provide around the world. We are for want of a better word, “the world’s charity.” Many citizens question giving money to others when there is so much need under our own roof.

I guess the bottom line is where does charity end and investment begin. If you talk to congress they consider foreign aid an investment. Taxpayers are not so sure. Maybe America needs a Marshall Plan of our own. What do you think?

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