The Real Cost Of US Support For Israel
Real Cost Of US Support For Israel: $3 Trillion
U.S. Financial Aid To Israel: Figures,
Facts, And Impact
The Strategic Functions Of U.S. Aid To
Aid To Israel: What U.S. Taxpayer Should Know
Aid To Israel: Interpreting The Strategic Relationship
Cost Of Israel To U.S. Taxpayers: True Lies About U.S. Aid
Attack On USS Liberty
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The Real Cost Of US Support For Israel
by Christopher Bollyn, September 19, 2003
it is commonly reported that Israel officially receives some
$3 billion every year in the form of economic aid from the
U.S. government, this figure is just the tip of the iceberg.
There are many billions of dollars more in hidden costs and
economic losses lurking beneath the surface. A recently published
economic analysis has concluded that U.S. support for the
state of Israel has cost American taxpayers nearly $3 trillion
($3 million millions) in 2002 dollars.
Costs to American Taxpayers of the Israeli-Palestinian Conflict:
$3 Trillion" is a summary of economic research done by
Thomas R. Stauffer. Stauffer's summary of the research was
published in the June 2003 issue of The Washington Report
on Middle East Affairs.
is a Washington, D.C.-based engineer and economist who writes
and teaches about the economics of energy and the Middle East.
Stauffer has taught at Harvard University and Georgetown University's
School of Foreign Service. Stauffer's findings were first
presented at an October 2002 conference sponsored by the U.S.
Army College and the University of Maine.
analysis is "an estimate of the total cost to the U.S.
alone of instability and conflict in the region - which emanates
from the core Israeli-Palestinian conflict."
identifiable costs come to almost $3 trillion," Stauffer
says. "About 60 percent, well over half, of those costs
- about $1.7 trillion - arose from the U.S. defense of Israel,
where most of that amount has been incurred since 1973."
for Israel comes to $1.8 trillion, including special trade
advantages, preferential contracts, or aid buried in other
accounts. In addition to the financial outlay, U.S. aid to
Israel costs some 275,000 American jobs each year." The
trade-aid imbalance alone with Israel of between $6-10 billion
costs about 125,000 American jobs every year, Stauffer says.
largest single element in the costs has been the series of
oil-supply crises that have accompanied the Israeli-Arab wars
and the construction of the Strategic Petroleum Reserve. â?To
date these have cost the U.S. $1.5 trillion (2002 dollars),
excluding the additional costs incurred since 2001,â?
cost of supporting Israel increased drastically after the
1973 Israeli-Arab war. U.S. support for Israel during that
war resulted in additional costs for the American taxpayer
of between $750 billion and $1 trillion, Stauffer says.
Israel was losing the war, President Richard Nixon stepped
in to supply the Jewish state with U.S. weapons. Nixon's intervention
triggered the Arab oil embargo which Stauffer estimates cost
the U.S. as much as $600 billion in lost GDP and another $450
in higher oil import costs.
1973 oil crisis, all in all, cost the U.S. economy no less
than $900 billion, and probably as much as $1,200 billion,"
a result of the oil embargo the United States created the
Strategic Petroleum Reserve (SPR) to "insulate Israel
and the U.S. against the wielding of a future Arab 'oil weapon'."
The billion-barrel SPR has cost U.S. taxpayers $134 billion
to date. According to an Oil Supply Guarantee, which former
Secretary of State Henry Kissinger provided Israel in 1975,
Israel gets 'first call' on any oil available to the U.S.
if Israel's oil supply is stopped.
$3 trillion figure is conservative as it does not include
the increased costs incurred during the year-long buildup
to the recent war against Iraq in which Israel played a significant,
albeit covert, role. The higher oil prices that occurred as
a result of the Anglo-American campaign against Iraq were
absorbed by the consumers. The increase in oil prices provided
a huge bonus for the leading oil companies such as British
Petroleum and Shell, who are major oil producers as well as
retailers. The major international oil companies recorded
record profits for the first quarter of 2003.
Washington Report seeks to "provide the American public
with balanced and accurate information concerning U.S. relations
with Middle Eastern states." The monthly journal is known
for keeping close tabs on the amount of U.S. taxpayer money
that goes to Israel and how much pro-Israel money flows back
to Members of Congress in the form of campaign aid.
journal's website, www.wrmea.com, has an up-to-date counter
at the top that indicates how much official aid flows to Israel.
While the counter currently stands at $88.2 billion, it only
reflects the minimum, as it does not include the many hidden
distinction is important, because the indirect or consequential
losses suffered by the U.S. as a result of its blind support
for Israel exceed by many times the substantial amount of
direct aid to Israel," Shirl McArthur wrote in the May
2003 issue of Washington Report.
article, "A Conservative Tally of Total Direct U.S. Aid
to Israel: $97.5 Billion - and Counting" tallies the
hidden costs, such as interest lost due to the early disbursement
of aid to Israel and funds hidden in other accounts. For example,
Israel received $5.45 billion in Defense Department funding
of Israeli weapons projects through 2002, McArthur says.
made to Israel by the U.S. government, like the recently awarded
$9 billion, invariably wind up being paid by the American
taxpayer. A recent Congressional Research Service report indicates
that Israel has received $42 billion in waived loans. "Therefore,
it is reasonable to consider all government loans to Israel
the same as grants," McArthur says.
for Israel has cost America dearly - well over than $10,000
per American - however the Israeli-Palestinian conflict has
been extremely costly for the entire world. According to Stauffer,
the total bill for supporting Israel is two to four times
higher than that for the U.S. alone -costing the global community
an estimated $6 to $12 trillion.
Aid To Israel:
Figures, Facts, and Impact
tax dollars sent to Israel:
U.S. Aid to Israel 1948-Present
to Israel of U.S. Aid
Since 1949 (As of November 1, 1997)
Foreign Aid Grants and Loans
Other U.S. Aid (12.2% of Foreign Aid)
Interest to Israel from Advanced Payments
Benefits per Israeli
Cost to U.S. Taxpayers of U.S.
Aid to Israel
Interest Costs Borne by U.S.
Total Cost to U.S. Taxpayers
Total Cost per Israeli
The Strategic Functions Of U.S. Aid To Israel
by Stephen Zunes
Dr. Zunes is an assistant professor in the Department of Politics
at the University of San Francisco
1992, the U.S. has offered Israel an additional $2 billion
annually in loan guarantees. Congressional researchers have
disclosed that between 1974 and 1989, $16.4 billion in U.S.
military loans were converted to grants and that this was
the understanding from the beginning. Indeed, all past U.S.
loans to Israel have eventually been forgiven by Congress,
which has undoubtedly helped Israel's often-touted claim that
they have never defaulted on a U.S. government loan. U.S.
policy since 1984 has been that economic assistance to Israel
must equal or exceed Israel's annual debt repayment to the
United States. Unlike other countries, which receive aid in
quarterly installments, aid to Israel since 1982 has been
given in a lump sum at the beginning of the fiscal year, leaving
the U.S. government to borrow from future revenues. Israel
even lends some of this money back through U.S. treasury bills
and collects the additional interest.
addition, there is the more than $1.5 billion in private U.S.
funds that go to Israel annually in the form of $1 billion
in private tax-deductible donations and $500 million in Israeli
bonds. The ability of Americans to make what amounts to tax-deductible
contributions to a foreign government, made possible through
a number of Jewish charities, does not exist with any other
country. Nor do these figures include short- and long-term
commercial loans from U.S. banks, which have been as high
as $1 billion annually in recent years.
U.S. aid to Israel is approximately one-third of the American
foreign-aid budget, even though Israel comprises just .001
percent of the world's population and already has one of the
world's higher per capita incomes. Indeed, Israel's GNP is
higher than the combined GNP of Egypt, Lebanon, Syria, Jordan,
the West Bank and Gaza. With a per capita income of about
$14,000, Israel ranks as the sixteenth wealthiest country
in the world; Israelis enjoy a higher per capita income than
oil-rich Saudi Arabia and are only slightly less well-off
than most Western European countries.
does not term economic aid to Israel as development assistance,
but instead uses the term "economic support funding."
Given Israel's relative prosperity, U.S. aid to Israel is
becoming increasingly controversial. In 1994, Yossi Beilen,
deputy foreign minister of Israel and a Knesset member, told
the Women's International Zionist organization, "If our
economic situation is better than in many of your countries,
how can we go on asking for your charity?"
U.S. Aid to Israel: What U.S. Taxpayer Should Know
by Tom Malthaner
morning as I was walking down Shuhada Street in Hebron, I
saw graffiti marking the newly painted storefronts and awnings.
Although three months past schedule and 100 percent over budget,
the renovation of Shuhada Street was finally completed this
week. The project manager said the reason for the delay and
cost overruns was the sabotage of the project by the Israeli
settlers of the Beit Hadassah settlement complex in Hebron.
They broke the street lights, stoned project workers, shot
out the windows of bulldozers and other heavy equipment with
pellet guns, broke paving stones before they were laid and
now have defaced again the homes and shops of Palestinians
with graffiti. The settlers did not want Shuhada St. opened
to Palestinian traffic as was agreed to under Oslo 2. This
renovation project is paid for by USAID funds and it makes
me angry that my tax dollars have paid for improvements that
have been destroyed by the settlers.
Americans are not aware how much of their tax revenue our
government sends to Israel. For the fiscal year ending in
September 30, 1997, the U.S. has given Israel $6.72 billion:
$6.194 billion falls under Israel's foreign aid allotment
and $526 million comes from agencies such as the Department
of Commerce, the U.S. Information Agency and the Pentagon.
The $6.72 billion figure does not include loan guarantees
and annual compound interest totalling $3.122 billion the
U.S. pays on money borrowed to give to Israel. It does not
include the cost to U.S. taxpayers of IRS tax exemptions that
donors can claim when they donate money to Israeli charities.
(Donors claim approximately $1 billion in Federal tax deductions
annually. This ultimately costs other U.S. tax payers $280
million to $390 million.)
grant, loans, interest and tax deductions are added together
for the fiscal year ending in September 30, 1997, our special
relationship with Israel cost U.S. taxpayers over $10 billion.
1949 the U.S. has given Israel a total of $83.205 billion.
The interest costs borne by U.S. tax payers on behalf of Israel
are $49.937 billion, thus making the total amount of aid given
to Israel since 1949 $133.132 billion. This may mean that
U.S. government has given more federal aid to the average
Israeli citizen in a given year than it has given to the average
am angry when I see Israeli settlers from Hebron destroy improvements
made to Shuhada Street with my tax money. Also, it angers
me that my government is giving over $10 billion to a country
that is more prosperous than most of the other countries in
the world and uses much of its money for strengthening its
military and the oppression of the Palestinian people.
Aid to Israel: Interpreting the 'Strategic Relationship"'
by Stephen Zunes
U.S. aid relationship with Israel is unlike any other in the
world," said Stephen Zunes during a January 26 CPAP presentation.
"In sheer volume, the amount is the most generous foreign
aid program ever between any two countries," added Zunes,
associate professor of Politics and chair of the Peace and
Justice Studies Program at the University of San Francisco.
explored the strategic reasoning behind the aid, asserting
that it parallels the "needs of American arms exporters"
and the role "Israel could play in advancing U.S. strategic
interests in the region."
Israel is an "advanced, industrialized, technologically
sophisticated country," it "receives more U.S. aid
per capita annually than the total annual [Gross Domestic
Product] per capita of several Arab states." Approximately
a third of the entire U.S. foreign aid budget goes to Israel,
"even though Israel comprises just
of the world's total population, and already has one of the
world's higher per capita incomes."
government officials argue that this money is necessary for
"moral" reasons-some even say that Israel is a "democracy
battling for its very survival." If that were the real
reason, however, aid should have been highest during Israel's
early years, and would have declined as Israel grew stronger.
Yet "the pattern
has been just the opposite."
According to Zunes, "99 percent of all U.S. aid to Israel
took place after the June 1967 war, when Israel found itself
more powerful than any combination of Arab armies
U.S. supports Israel's dominance so it can serve as "a
surrogate for American interests in this vital strategic region."
"Israel has helped defeat radical nationalist movements"
and has been a "testing ground for U.S. made weaponry."
Moreover, the intelligence agencies of both countries have
"collaborated," and "Israel has funneled U.S.
arms to third countries that the U.S. [could] not send arms
Iike South Africa, like the Contras, Guatemala
under the military junta, [and] Iran." Zunes cited an
Israeli analyst who said: "'It's like Israel has just
become another federal agency when it's convenient to use
and you want something done quietly."' Although the strategic
relationship between the United States and the Gulf Arab states
in the region has been strengthening in recent years, these
states "do not have the political stability, the technological
sophistication, [or] the number of higher-trained armed forces
personnel" as does Israel.
Peled, former Israeli major general and Knesset member, told
Zunes that he and most Israeli generals believe this aid is
"little more than an American subsidy to U.S. arms manufacturers,"
considering that the majority of military aid to Israel is
used to buy weapons from the U.S. Moreover, arms to Israel
create more demand for weaponry in Arab states. According
to Zunes, "the Israelis announced back in 1991 that they
supported the idea of a freeze in Middle East arms transfers,
yet it was the United States that rejected it."
the fall of 1993-when many had high hopes for peace-78 senators
wrote to former President Bill Clinton insisting that aid
to Israel remain "at current levels." Their "only
reason" was the "massive procurement of sophisticated
arms by Arab states." The letter neglected to mention
that 80 percent of those arms to Arab countries came from
the U.S. "I'm not denying for a moment the power of AIPAC
[the American Israel Public Affairs Committee], the pro-Israel
lobby," and other similar groups, Zunes said. Yet the
"Aerospace Industry Association which promotes these
massive arms shipments
is even more influential."
This association has given two times more money to campaigns
than all of the pro-Israel groups combined. Its "force
on Capitol Hill, in terms of lobbying, surpasses that of even
AIPAC." Zunes asserted that the "general thrust
of U.S. policy would be pretty much the same even if AIPAC
didn't exist. We didn't need a pro-Indonesia lobby to support
Indonesia in its savage repression of East Timor all these
years." This is a complex issue, and Zunes said that
he did not want to be "conspiratorial," but he asked
the audience to imagine what "Palestinian industriousness,
Israeli technology, and Arabian oil money
would do to
transform the Middle East
. [W]hat would that mean to
American arms manufacturers? Oil companies? Pentagon planners?"
increasing number of Israelis are pointing out" that
these funds are not in Israel's best interest. Quoting Peled,
Zunes said, "this aid pushes Israel 'toward a posture
of callous intransigence' in terms of the peace process."
Moreover, for every dollar the U.S. sends in arms aid, Israel
must spend two to three dollars to train people to use the
weaponry, to buy parts, and in other ways make use of the
aid. Even "main-stream Israeli economists are saying
[it] is very harmful to the country's future."
Israeli paper Yediot Aharonot described Israel as "'the
godfather's messenger' since [Israel] undertake[s] the 'dirty
work' of a godfather who 'always tries to appear to be the
owner of some large, respectable business."' Israeli
satirist B. Michael refers to U.S. aid this way: "'My
master gives me food to eat and I bite those whom he tells
me to bite. It's called strategic cooperation." 'To challenge
this strategic relationship, one cannot focus solely on the
Israeli lobby but must also examine these "broader forces
as well." "Until we tackle this issue head-on,"
it will be "very difficult to win" in other areas
relating to Palestine.
results" of the short-term thinking behind U.S. policy
"are tragic," not just for the "immediate victims"
but "eventually [for] Israel itself" and "American
interests in the region." The U.S. is sending enormous
amounts of aid to the Middle East, and yet "we are less
secure than ever"-both in terms of U.S. interests abroad
and for individual Americans. Zunes referred to a "growing
and increasing hostility [of] the average Arab toward the
United States." In the long term, said Zunes, "peace
and stability and cooperation with the vast Arab world is
far more important for U.S. interests than this alliance with
is not only an issue for those who are working for Palestinian
rights, but it also "jeopardizes the entire agenda of
those of us concerned about human rights, concerned about
arms control, concerned about international law." Zunes
sees significant potential in "building a broad-based
movement around it."
above text is based on remarks, delivered on. 26 January,
2001 by Stephen Zunes - Associate Professor of Politics and
Chair of the Peace and Justice Studies Program at San Francisco
of Israel to U.S. Taxpayers:
True Lies About U.S. Aid to Israel
by Richard H. Curtiss
many years the American media said that "Israel receives
$1.8 billion in military aid" or that "Israel receives
$1.2 billion in economic aid." Both statements were true,
but since they were never combined to give us the complete
total of annual U.S. aid to Israel, they also were liestrue
Americans have begun to read and hear that "Israel receives
$3 billion in annual U.S. foreign aid." That's true.
But it's still a lie. The problem is that in fiscal 1997 alone,
Israel received from a variety of other U.S. federal budgets
at least $525.8 million above and beyond its $3 billion from
the foreign aid budget, and yet another $2 billion in federal
loan guarantees. So the complete total of U.S. grants and
loan guarantees to Israel for fiscal 1997 was $5,525,800,000.
can truthfully blame the mainstream media for never digging
out these figures for themselves, because none ever have.
They were compiled by the Washington Report on Middle East
Affairs. But the mainstream media certainly are not alone.
Although Congress authorizes America's foreign aid total,
the fact that more than a third of it goes to a country smaller
in both area and population than Hong Kong probably never
has been mentioned on the floor of the Senate or House. Yet
it's been going on for more than a generation.
the only members of Congress who even suspect the full total
of U.S. funds received by Israel each year are the privileged
few committee members who actually mark it up. And almost
all members of the concerned committees are Jewish, have taken
huge campaign donations orchestrated by Israel's Washington,
DC lobby, the American Israel Public Affairs Committee (AIPAC),
or both. These congressional committee members are paid to
act, not talk. So they do and they don't.
same applies to the president, the secretary of state, and
the foreign aid administrator. They all submit a budget that
includes aid for Israel, which Congress approves, or increases,
but never cuts. But no one in the executive branch mentions
that of the few remaining U.S. aid recipients worldwide, all
of the others are developing nations which either make their
military bases available to the U.S., are key members of international
alliances in which the U.S. participates, or have suffered
some crippling blow of nature to their abilities to feed their
people such as earthquakes, floods or droughts.
whose troubles arise solely from its unwillingness to give
back land it seized in the 1967 war in return for peace with
its neighbors, does not fit those criteria. In fact, Israel's
1995 per capita gross domestic product was $15,800. That put
it below Britain at $19,500 and Italy at $18,700 and just
above Ireland at $15,400 and Spain at $14,300.
four of those European countries have contributed a very large
share of immigrants to the U.S., yet none has organized an
ethnic group to lobby for U.S. foreign aid. Instead, all four
send funds and volunteers to do economic development and emergency
relief work in other less fortunate parts of the world.
lobby that Israel and its supporters have built in the United
States to make all this aid happen, and to ban discussion
of it from the national dialogue, goes far beyond AIPAC, with
its $15 million budget, its 150 employees, and its five or
six registered lobbyists who manage to visit every member
of Congress individually once or twice a year.
in turn, can draw upon the resources of the Conference of
Presidents of Major American Jewish Organizations, a roof
group set up solely to coordinate the efforts of some 52 national
Jewish organizations on behalf of Israel.
them are Hadassah, the Zionist women's organization, which
organizes a steady stream of American Jewish visitors to Israel;
the American Jewish Congress, which mobilizes support for
Israel among members of the traditionally left-of-center Jewish
mainstream; and the American Jewish Committee, which plays
the same role within the growing middle-of-the-road and right-of-center
Jewish community. The American Jewish Committee also publishes
Commentary,one of the Israel lobby's principal national publications.
the most controversial of these groups is B'nai B'rith's Anti-Defamation
League. Its original highly commendable purpose was to protect
the civil rights of American Jews. Over the past generation,
however, the ADL has regressed into a conspiratorial and,
with a $45 million budget, extremely well-funded hate group.
the 1980s, during the tenure of chairman Seymour Reich, who
went on to become chairman of the Conference of Presidents,
ADL was found to have circulated two annual fund-raising letters
warning Jewish parents against allegedly negative influences
on their children arising from the increasing Arab presence
on American university campuses.
recently, FBI raids on ADL's Los Angeles and San Francisco
offices revealed that an ADL operative had purchased files
stolen from the San Francisco police department that a court
had ordered destroyed because they violated the civil rights
of the individuals on whom they had been compiled. ADL, it
was shown, had added the illegally prepared and illegally
obtained material to its own secret files, compiled by planting
informants among Arab-American, African-American, anti-Apartheid
and peace and justice groups.
ADL infiltrators took notes of the names and remarks of speakers
and members of audiences at programs organized by such groups.
ADL agents even recorded the license plates of persons attending
such programs and then suborned corrupt motor vehicles department
employees or renegade police officers to identify the owners.
one of the principal offenders fled the United States to escape
prosecution, no significant penalties were assessed. ADL's
Northern California office was ordered to comply with requests
by persons upon whom dossiers had been prepared to see their
own files, but no one went to jail and as yet no one has paid
surprisingly, a defecting employee revealed in an article
he published in the Washington Report on Middle East Affairs
that AIPAC, too, has such "enemies" files. They
are compiled for use by pro-Israel journalists like Steven
Emerson and other so-called "terrorism experts,"
and also by professional, academic or journalistic rivals
of the persons described for use in black-listing, defaming,
or denouncing them. What is never revealed is that AIPAC's
"opposition research" department, under the supervision
of Michael Lewis, son of famed Princeton University Orientalist
Bernard Lewis, is the source of this defamatory material.
this is not AIPAC's most controversial activity. In the 1970s,
when Congress put a cap on the amount its members could earn
from speakers' fees and book royalties over and above their
salaries, it halted AIPAC's most effective ways of paying
off members for voting according to AIPAC recommendations.
Members of AIPAC's national board of directors solved the
problem by returning to their home states and creating political
action committees (PACs).
special interests have PACs, as do many major corporations,
labor unions, trade associations and public-interest groups.
But the pro-Israel groups went wild. To date some 126 pro-Israel
PACs have been registered, and no fewer than 50 have been
active in every national election over the past generation.
individual voter can give up to $2,000 to a candidate in an
election cycle, and a PAC can give a candidate up to $10,000.
However, a single special interest with 50 PACs can give a
candidate who is facing a tough opponent, and who has voted
according to its recommendations, up to half a million dollars.
That's enough to buy all the television time needed to get
elected in most parts of the country.
candidates who don't need this kind of money certainly don't
want it to become available to a rival from their own party
in a primary election, or to an opponent from the opposing
party in a general election. As a result, all but a handful
of the 535 members of the Senate and House vote as AIPAC instructs
when it comes to aid to Israel, or other aspects of U.S. Middle
is something else very special about AIPAC's network of political
action committees. Nearly all have deceptive names. Who could
possibly know that the Delaware Valley Good Government Association
in Philadelphia, San Franciscans for Good Government in California,
Cactus PAC in Arizona, Beaver PAC in Wisconsin, and even Icepac
in New York are really pro-Israel PACs under deep cover?
fact, the congressmembers know it when they list the contributions
they receive on the campaign statements they have to prepare
for the Federal Election Commission. But their constituents
don't know this when they read these statements. So just as
no other special interest can put so much "hard money"
into any candidate's election campaign as can the Israel lobby,
no other special interest has gone to such elaborate lengths
to hide its tracks.
AIPAC, Washington's most feared special-interest lobby, can
hide how it uses both carrots and sticks to bribe or intimidate
members of Congress, it can't hide all of the results.
can ask one of their representatives in Congress for a chart
prepared by the Congressional Research Service, a branch of
the Library of Congress, that shows Israel received $62.5
billion in foreign aid from fiscal year 1949 through fiscal
year 1996. People in the national capital area also can visit
the library of the U.S. Agency for International Development
(USAID) in Rosslyn, Virginia, and obtain the same information,
plus charts showing how much foreign aid the U.S. has given
other countries as well.
will learn that in precisely the same 1949-1996 time frame,
the total of U.S. foreign aid to all of the countries of sub-Saharan
Africa, Latin America and the Caribbean combined was $62,497,800,000--almost
exactly the amount given to tiny Israel.
to the Population Reference Bureau of Washington, DC, in mid-1995
the sub-Saharan countries had a combined population of 568
million. The $24,415,700,000 in foreign aid they had received
by then amounted to $42.99 per sub-Saharan African.
with a combined population of 486 million, all of the countries
of Latin America and the Caribbean together had received $38,254,400,000.
This amounted to $79 per person.
per capita U.S. foreign aid to Israel's 5.8 million people
during the same period was $10,775.48. This meant that for
every dollar the U.S. spent on an African, it spent $250.65
on an Israeli, and for every dollar it spent on someone from
the Western Hemisphere outside the United States, it spent
$214 on an Israeli.
comparisons already seem shocking, but they are far from the
whole truth. Using reports compiled by Clyde Mark of the Congressional
Research Service and other sources, freelance writer Frank
Collins tallied for theWashington Report all of the extra
items for Israel buried in the budgets of the Pentagon and
other federal agencies in fiscal year 1993.Washington Report
news editor Shawn Twing did the same thing for fiscal years
1996 and 1997.
uncovered $1.271 billion in extras in FY 1993, $355.3 million
in FY 1996 and $525.8 million in FY 1997. These represent
an average increase of 12.2 percent over the officially recorded
foreign aid totals for the same fiscal years, and they probably
are not complete. It's reasonable to assume, therefore, that
a similar 12.2 percent hidden increase has prevailed over
all of the years Israel has received aid.
of Oct. 31, 1997 Israel will have received $3.05 billion in
U.S. foreign aid for fiscal year 1997 and $3.08 billion in
foreign aid for fiscal year 1998. Adding the 1997 and 1998
totals to those of previous years since 1949 yields a total
of $74,157,600,000 in foreign aid grants and loans. Assuming
that the actual totals from other budgets average 12.2 percent
of that amount, that brings the grand total to $83,204,827,200.
that's not quite all. Receiving its annual foreign aid appropriation
during the first month of the fiscal year, instead of in quarterly
installments as do other recipients, is just another special
privilege Congress has voted for Israel. It enables Israel
to invest the money in U.S. Treasury notes. That means that
the U.S., which has to borrow the money it gives to Israel,
pays interest on the money it has granted to Israel in advance,
while at the same time Israel is collecting interest on the
money. That interest to Israel from advance payments adds
another $1.650 billion to the total, making it $84,854,827,200.That's
the number you should write down for total aid to Israel.
And that's $14,346 each for each man, woman and child in Israel.
worth noting that that figure does not include U.S. government
loan guarantees to Israel, of which Israel has drawn $9.8
billion to date. They greatly reduce the interest rate the
Israeli government pays on commercial loans, and they place
additional burdens on U.S. taxpayers, especially if the Israeli
government should default on any of them. But since neither
the savings to Israel nor the costs to U.S. taxpayers can
be accurately quantified, they are excluded from consideration
friends of Israel never tire of saying that Israel has never
defaulted on repayment of a U.S. government loan. It would
be equally accurate to say Israel has never been required
to repay a U.S. government loan. The truth of the matter is
complex, and designed to be so by those who seek to conceal
it from the U.S. taxpayer.
U.S. loans to Israel are forgiven, and many were made with
the explicit understanding that they would be forgiven before
Israel was required to repay them. By disguising as loans
what in fact were grants, cooperating members of Congress
exempted Israel from the U.S. oversight that would have accompanied
grants. On other loans, Israel was expected to pay the interest
and eventually to begin repaying the principal. But the so-called
Cranston Amendment, which has been attached by Congress to
every foreign aid appropriation since 1983, provides that
economic aid to Israel will never dip below the amount Israel
is required to pay on its outstanding loans. In short, whether
U.S. aid is extended as grants or loans to Israel, it never
returns to the Treasury.
enjoys other privileges. While most countries receiving U.S.
military aid funds are expected to use them for U.S. arms,
ammunition and training, Israel can spend part of these funds
on weapons made by Israeli manufacturers. Also, when it spends
its U.S. military aid money on U.S. products, Israel frequently
requires the U.S. vendor to buy components or materials from
Israeli manufacturers. Thus, though Israeli politicians say
that their own manufacturers and exporters are making them
progressively less dependent upon U.S. aid, in fact those
Israeli manufacturers and exporters are heavily subsidized
by U.S. aid.
it's beyond the parameters of this study, it's worth mentioning
that Israel also receives foreign aid from some other countries.
After the United States, the principal donor of both economic
and military aid to Israel is Germany.
far the largest component of German aid has been in the form
of restitution payments to victims of Nazi attrocities. But
there also has been extensive German military assistance to
Israel during and since the Gulf war, and a variety of German
educational and research grants go to Israeli institutions.
The total of German assistance in all of these categories
to the Israeli government, Israeli individuals and Israeli
private institutions has been some $31 billion or $5,345 per
capita, bringing the per capita total of U.S. and German assistance
combined to almost $20,000 per Israeli. Since very little
public money is spent on the more than 20 percent of Israeli
citizens who are Muslim or Christian, the actual per capita
benefits received by Israel's Jewish citizens would be considerably
Cost to U.S. Taxpayers
as it is, what Israelis actually got in U.S. aid is considerably
less than what it has cost U.S. taxpayers to provide it. The
principal difference is that so long as the U.S. runs an annual
budget deficit, every dollar of aid the U.S. gives Israel
has to be raised through U.S. government borrowing.
an article in the Washington Report for December 1991/January
1992, Frank Collins estimated the costs of this interest,
based upon prevailing interest rates for every year since
1949. I have updated this by applying a very conservative
5 percent interest rate for subsequent years, and confined
the amount upon which the interest is calculated to grants,
not loans or loan guarantees.
this basis the $84.8 billion in grants, loans and commodities
Israel has received from the U.S. since 1949 cost the U.S.
an additional $49,936,880,000 in interest.
are many other costs of Israel to U.S. taxpayers, such as
most or all of the $45.6 billion in U.S. foreign aid to Egypt
since Egypt made peace with Israel in 1979 (compared to $4.2
billion in U.S. aid to Egypt for the preceding 26 years).
U.S. foreign aid to Egypt, which is pegged at two-thirds of
U.S. foreign aid to Israel, averages $2.2 billion per year.
also have been immense political and military costs to the
U.S. for its consistent support of Israel during Israel's
half-century of disputes with the Palestinians and all of
its Arab neighbors. In addition, there have been the approximately
$10 billion in U.S. loan guarantees and perhaps $20 billion
in tax-exempt contributions made to Israel by American Jews
in the nearly half-century since Israel was created.
excluding all of these extra costs, America's $84.8 billion
in aid to Israel from fiscal years 1949 through 1998, and
the interest the U.S. paid to borrow this money, has cost
U.S. taxpayers $134.8 billion, not adjusted for inflation.
Or, put another way, the nearly $14,630 every one of 5.8 million
Israelis received from the U.S. government by Oct. 31, 1997
has cost American taxpayers $23,240 per Israeli.
would be interesting to know how many of those American taxpayers
believe they and their families have received as much from
the U.S. Treasury as has everyone who has chosen to become
a citizen of Israel. But it's a question that will never occur
to the American public because, so long as America's mainstream
media, Congress and president maintain their pact of silence,
few Americans will ever know the true cost of Israel to U.S.
Curtiss, a retired U.S. foreign service officer, is the executive
editor of the Washington Report on Middle East Affairs.