1973, Israel has cost the United States about
$1.6 trillion. If divided by today's population,
that is more than $5,700 per person.
is an estimate by Thomas Stauffer, a consulting
economist in Washington. For decades, his
analyses of the Middle East scene have made
him a frequent thorn in the side of the Israel
the first time in many years, Mr. Stauffer
has tallied the total cost to the US of its
backing of Israel in its drawn-out, violent
dispute with the Palestinians. So far, he
figures, the bill adds up to more than twice
the cost of the Vietnam War.
now Israel wants more. In a meeting at the
White House late last month, Israeli officials
made a pitch for $4 billion in additional
military aid to defray the rising costs of
dealing with the intifada and suicide bombings.
They also asked for more than $8 billion in
loan guarantees to help the country's recession-bound
Israel's deep economic troubles, Stauffer
doubts the Israel bonds covered by the loan
guarantees will ever be repaid. The bonds
are likely to be structured so they don't
pay interest until they reach maturity. If
Stauffer is right, the US would end up paying
both principal and interest, perhaps 10 years
request could be part of a supplemental spending
bill that's likely to be passed early next
year, perhaps wrapped in with the cost of
a war with Iraq.
is the largest recipient of US foreign aid.
It is already due to get $2.04 billion in
military assistance and $720 million in economic
aid in fiscal 2003. It has been getting $3
billion a year for years.
the official aid to 2001 dollars in purchasing
power, Israel has been given $240 billion
since 1973, Stauffer reckons. In addition,
the US has given Egypt $117 billion and Jordan
$22 billion in foreign aid in return for signing
peace treaties with Israel.
politically, if not administratively, those
outlays are part of the total package of support
for Israel," argues Stauffer in a lecture
on the total costs of US Middle East policy,
commissioned by the US Army War College, for
a recent conference at the University of Maine.
foreign-aid costs are well known. Many Americans
would probably say it is money well spent
to support a beleagured democracy of some
strategic interest. But Stauffer wonders if
Americans are aware of the full bill for supporting
Israel since some costs, if not hidden, are
huge cost is not secret. It is the higher
cost of oil and other economic damage to the
US after Israel-Arab wars.
1973, for instance, Arab nations attacked
Israel in an attempt to win back territories
Israel had conquered in the 1967 war. President
Nixon resupplied Israel with US arms, triggering
the Arab oil embargo against the US.
shortfall in oil deliveries kicked off a deep
recession. The US lost $420 billion (in 2001
dollars) of output as a result, Stauffer calculates.
And a boost in oil prices cost another $450
that Arab nations might use their oil clout
again, the US set up a Strategic Petroleum
Reserve. That has since cost, conservatively,
$134 billion, Stauffer reckons.
US help includes:
US Jewish charities and organizations have
remitted grants or bought Israel bonds worth
$50 billion to $60 billion. Though private
in origin, the money is "a net drain" on the
United States economy, says Stauffer.
The US has already guaranteed $10 billion
in commercial loans to Israel, and $600 million
in "housing loans." (See editor's note below.)
Stauffer expects the US Treasury to cover
The US has given $2.5 billion to support Israel's
Lavi fighter and Arrow missile projects.
Israel buys discounted, serviceable "excess"
US military equipment. Stauffer says these
discounts amount to "several billion dollars"
over recent years.
Israel uses roughly 40 percent of its $1.8
billion per year in military aid, ostensibly
earmarked for purchase of US weapons, to buy
Israeli-made hardware. It also has won the
right to require the Defense Department or
US defense contractors to buy Israeli-made
equipment or subsystems, paying 50 to 60 cents
on every defense dollar the US gives to Israel.
help, financial and technical, has enabled
Israel to become a major weapons supplier.
Weapons make up almost half of Israel's manufactured
exports. US defense contractors often resent
the buy-Israel requirements and the extra
competition subsidized by US taxpayers.
US policy and trade sanctions reduce US exports
to the Middle East about $5 billion a year,
costing 70,000 or so American jobs, Stauffer
estimates. Not requiring Israel to use its
US aid to buy American goods, as is usual
in foreign aid, costs another 125,000 jobs.
Israel has blocked some major US arms sales,
such as F-15 fighter aircraft to Saudi Arabia
in the mid-1980s. That cost $40 billion over
10 years, says Stauffer.
list will be controversial. He's been assisted
in this research by a number of mostly retired
military or diplomatic officials who do not
go public for fear of being labeled anti-Semitic
if they criticize America's policies toward
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