U.S. Government Use of Propaganda to Manipulate the People

By Victor Sperandeo with the Curmudgeon

Legislation: Smith-Mundt Act

US Information and Educational Exchange Act of 1948

Public Law 80-402, 62 Stat. 6

Passed Congress/Enrolled Bill: Jan 27, 1948.

Eightieth Congress of the United States of America

At the Second Session H. R. 3342

AN ACT

To promote the better understanding of the United States among the peoples of the world and to strengthen cooperative international relations.

Comment and Analysis:

A 2012 amendment to the Smith-Mundt Act (aka U.S. Information and Educational Exchange Act of 1948), which went into effect in 2013, has caused great controversy over the U.S. government's ability to disseminate information domestically. Known as the 2013 Smith-Mundt Modernization Act, it lifted the ban on the domestic dissemination of government‐produced materials intended for foreign audiences. The act was part of the National Defense Authorization Act which was intended to adapt to the changing media landscape and enhance the government's ability to communicate effectively.

Victor strongly believes the amendment legally permits the U.S. government to use propaganda to effectively lie and manipulate the people without being sued. This act allows the U.S. government to disseminate information intended for foreign audiences abroad about the United States, including its policies and culture. It also lifted the prohibition on the domestic dissemination of propaganda, which effectively allows U.S. government-produced content to be shared domestically to manipulate public opinion.

Post-2013 Examples of Potential Propaganda:

The line between legitimate public information and propaganda intended to manipulate public opinion has been debated. Concerns about the potential misuse of the updated Smith-Mundt Act have led to specific cases being flagged by watchdog groups and journalists. Here are a few of them:

USAGM and Facebook Ads (2018): In 2018, the New York Times reported that Radio Free Europe/Radio Liberty, which is part of USAGM, used targeted Facebook ads to promote stories aimed at Americans. Some ads included a chart highlighting NATO's unpopularity. The ads ran shortly after President Trump criticized NATO members, which critics saw as an attempt to influence domestic opinion.

Targeting Washington D.C. Audiences (2018): A review by the House Foreign Affairs Committee uncovered that another USAGM network, Voice of America, had bought at least six Facebook ads that specifically targeted audiences in Washington, D.C. This was seen as a violation of the prohibition on targeting domestic audiences.

Trump Administration and USAGM (2025): A White House article from March 2025, during Donald Trump's presidency, attacked the Voice of America (VOA) for alleged partisan bias. The article framed VOA as a "hubris-filled rogue operation" with "leftist bias," claiming the administration's executive order would prevent taxpayer money from funding "radical propaganda." This represents a potential use of the executive branch's official platform to influence public perception of government media, a form of framing intended to shape public opinion.

General Concerns about Modernization: Critics have raised ongoing concerns that the removal of the ban opens the door to the government covertly influencing public opinion by shaping the domestic news environment. The law technically prohibits targeting domestic audiences, but as the Facebook incidents showed, this can be violated. The issue is further complicated by the fact that the material, once available domestically, can be picked up and amplified by other outlets.

Conclusions:

The Smith-Mundt Modernization Act was intended to promote transparency, but its implementation has raised serious concerns about the potential for government-sponsored media to engage in a form of propaganda that could influence the U.S. public.

In August 2025, New Hampshire's House of Representatives introduced a resolution urging the U.S. Congress to amend the Smith-Mundt Modernization Act. The resolution argued that repealing the ban had allowed the government to "propagandize" the public and engage in "psychological warfare techniques."

End Quote:

Keep in mind these words by French philosopher Voltaire:

"Those who can make you believe absurdities can make you commit atrocities."

This quote highlights the dangers of blind belief and the potential for manipulation by those in power.

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AI-generated content may be incorrect.

Voltaire was an influential French Enlightenment writer, historian, and philosopher known for his sharp wit and advocacy for reason, freedom of speech, and religious tolerance. He believed in a non-interfering God (Deism), but above all, championed the use of reason to challenge all forms of authority and superstition, aiming to protect civil liberties and promote social progress.

The Curmudgeon
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Curmudgeon is a retired investment professional. He has been involved in financial markets since 1968 (yes, he cut his teeth on the 1968-1974 bear market), became an SEC Registered Investment Advisor in 1995, and received the Chartered Financial Analyst designation from AIMR (now CFA Institute) in 1996. He managed hedged equity and alternative (non-correlated) investment accounts for clients from 1992-2005.

Victor Sperandeo is a historian, economist and financial innovator who has re-invented himself and the companies he's owned (since 1971) to profit in the ever-changing and arcane world of markets, economies, and government policies. Victor started his Wall Street career in 1966 and began trading for a living in 1968. As President and CEO of Alpha Financial Technologies LLC, Sperandeo oversees the firm's research and development platform, which is used to create innovative solutions for different futures markets, risk parameters and other factors.

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