By the Numbers: How Inflation And Growth Destroyed The US Influence Over Egypt
Senior Editor, CNBC.com
Steve Sailer points out why our aid to Egypt doesn’t seem to buy us as much loyalty as it once might have.
The deal struck at Camp David in 1978 was, very roughly, that, in return for no more war, the U.S. would give Israel $3 billion per year and Egypt $2 billion per year ($1.3 billion of which went to strengthen the military), or $50 per Egyptian per year. That wasn't bad money back then.
But the payoff hasn't gone up since then. And the population of Egypt has doubled, so now rather than $50 per Egyptian per year in 1978 dollars, the bribe is now $25 per Egyptian per year in crummy 2011 dollars.
Steve’s right about crummy 2011 dollars. Once we adjust for inflation, that $25 dollars a year declines to the equivalent in 1978 dollars of just $7.12 per year.
What’s more, Egypt has become an incredibly wealthier place since 1978, which also diminishes the value of our aid. In 1978, the per capita GDP of Egypt was just $354.33. Our $50 per year, then, equaled almost 1/7th of their GDP.
Now the per capita GDP of Egypt has climbed to $6,200. That means our $25 a year is just 1/248 of their per capita GDP.
No wonder the people of Egypt don’t think their getting such a good deal from their government’s arrangement with the United States anymore.
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