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The True Cost of Israel

The American Israel Public Affairs Committee (AIPAC) concluded its annual conference late last month, triggering the usual debate in various alternative [1] media outlets. Why does so much U.S. taxpayer money go to a small and not particularly useful client state that has a vibrant European-level economy and is already a regional military colossus?

Those who support the cash flow argue that Israel is threatened, most notably by Iran; they claim the assistance, which has been largely but not completely used to buy American-made weapons, is required to maintain a qualitative edge over the country’s potential enemies. Those who oppose the aid would counter that the Iranian threat is largely an Israeli and Saudi Arabian invention, used to justify continued American support for the national-security policies of both countries. And they would add that Tel Aviv is more than able to defend itself and pay for its own military establishment.

In truth, American aid to Israel is something like a pot of gold that keeps on giving. Both sides in the discussion would probably agree that the domestic Israel Lobby has been instrumental in sustaining the high level of aid, though they would undoubtedly disagree over whether that is a good or bad thing. The operation of “The Lobby,” generally regarded as the most powerful voice on foreign policy in Washington, led Professors Stephen Walt and John Mearsheimer to ask [2], “Why has the U.S. been willing to set aside its own security … in order to advance the interests of another state? [No] explanation can account for the remarkable level of material and diplomatic support that the U.S. provides.” They observed that “Other special interest groups have managed to skew foreign policy, but no lobby has managed to divert it as far from what the national interest would suggest, while simultaneously convincing Americans that U.S. interests and those of the other country—in this case, Israel—are essentially identical.”

Since the foundation of the state of Israel in 1948, it has been [3] “the largest cumulative recipient of U.S. foreign assistance since World War II,”  according to the Congressional Research Service. The United States has provided Israel with $233.7 billion in adjusted for inflation aid between 1948 through the end of 2012, reports Haaretz [4]. Current discussions center on the Obama administration’s memo of understanding with Israel that promised it $38 billion in military assistance over the next 10 years, a considerable sum but nevertheless a total that is far less than what is actually received annually from the United States Treasury and from other American sources.

Senator Lindsey Graham (R-S.C.), speaking in the most recent legislative discussion over Israeli aid, stated that [5] the $38 billion should be regarded as a floor, and that Congress should approve additional funds for Israeli defense as needed. It has, in fact, done so. At its most recent meeting, AIPAC announced [6] the latest windfall from America, applauding “the U.S. House of Representatives for significantly bolstering its support of U.S.-Israel missile defense cooperation in the FY 2017 defense appropriations bill. The House appropriated $600.7 million for U.S.-Israel missile defense programs.” And there is a long history of such special funding for Israeli-connected projects. The Iron Dome missile-defense system was largely funded by the United States, to the tune of more than $1 billion [7]. In the 1980s, the Israeli Lavi jet-fighter development program was funded by Washington [8], costing $2 billion to the U.S. taxpayer before it was terminated over technical and other problems, part of $5.45 billion in Pentagon funding [9] of various Israeli weapons projects through 2002.

The admittedly unreliable former Congressman James Traficant once claimed [10] that “Israel gets $15 billion per year from the American taxpayers.” Indeed, how Israel gets money from the United States is actually quite complex and not very transparent to the American public, going well beyond the check for $3.8 billion handed over at the beginning of the fiscal year on October 1. Even that check, uniquely given to aid recipient Israel as one lump sum on the first day of the year, is manipulated to produce extra revenue. It is normally immediately redeposited with the U.S. Treasury, which then, because it operates on a deficit, borrows the money to pay interest on it as the Israelis draw it down. That interest payment costs the American taxpayer an estimated $100 million more [11] per year. Israel has also been adept at using “loan guarantees,” an issue that may have contributed [12] to the downfall of President George H.W. Bush. The reality is that the loans, totaling $42 billion [11], are never repaid by Israel [13], meaning that the United States Treasury picks up the tab on principle and interest, a form of additional assistance. The Bush-era loan amounted to $10 billion [14].

Department of Defense co-production projects, preferential contracting, “scrapping” or “surplusing” of usable equipment that is then turned over to the Israel Defense Forces (IDF), as well as the forward deployment of military hardware to an Israeli-run base in Israel (used to support local military operations), are considerable benefits [11] to Tel Aviv’s bottom line. Much of this assistance is hidden from view.

In 1992, AIPAC President James Steiner bragged [15] how he “got almost a billion dollars in other goodies [in negotiations with Secretary of State Jim Baker] that people don’t even know about.” In September 2012, Israel’s former commander-in-chief, Gen. Gabi Ashkenazi, admitted at a conference [16] that between 2009 and 2012 American taxpayers had paid for more of his country’s defense budget than had Israeli taxpayers. Those numbers have been disputed [17], but the fact remains that a considerable portion of the Israeli military spending comes from the United States. It currently is more than [18] 20 percent of the total $16 billion budget, not counting special appropriations.

Through tax exemptions, the U.S. government also subsidizes the coordinated effort to provide additional assistance to Israel. No other lobbying effort to promote the interests of a foreign country benefits in like fashion, and, indeed, most similar groups are required to register under the Foreign Agents Registration Act of 1938, as former National Security Advisor Michael Flynn has learned to his chagrin regarding Turkey.

Most organizations and foundations that might reasonably be considered active parts of the Israel Lobby are generally registered with the Department of the Treasury as 501(c)3 tax-exempt educational foundations. Grant Smith, speaking at a conference on the U.S. and Israel [19] on March 24, explained how the broader Israel Lobby uses this legal framework:

Key U.S. organizations include the American Israel Public Affairs Committee (AIPAC), the American Jewish Committee (AJC), the Zionist Organization of America (ZOA) and the Anti-Defamation League (ADL). Hundreds more, including a small number of evangelical Christian organizations, play a role within a vast ecosystem that demands unconditional U.S. support for Israel. In the year 2012 the nonprofit wing of the Israel lobby raised $3.7 billion in revenue. They are on track to reach $6.3 billion by 2020. Collectively they employed 14,000 and claimed 350,000 volunteers.

The $3.7 billion raised in 2012 was largely tax exempt and it does not include the billions in private donations that go directly to Israel, as well as the billions in contributions that are regarded as covered by “religious exemptions” for groups that don’t file at all. There are also contributions sent straight to various Israeli-based foundations that are themselves often registered as charities. The Forward magazine investigated 3,600 Jewish tax-exempt charitable foundations [20] in 2014 and determined that they had net assets of $26 billion, $12–14 billion in annual revenue, and “focuse[d] the largest share of [their] donor dollars on Israel.” That share amounted to 38 percent of total income. The Forward adds that it is “an apparatus that benefits massively from the U.S. federal government and many state and local governments, in the form of hundreds of millions of dollars in government grants, billions in tax-deductible donations and billions more in program fees paid for with government funds.”

Some pro-Israel foundations are in-your-face about their goals. The Friends of the Israel Defense Forces, which “Support[s] the wellbeing and education needs of Israel’s brave soldiers,” is a registered tax-exempt charity [21] that conducts fundraisers throughout the United States. Money being fungible, some American Jews have been surprised to learn [22] that the donations that they had presumed were going to what they regard as charitable causes in Israel have instead wound up in expanding the illegal settlements on the West Bank, an objective that they might not support. It was recently reported [23] that Donald Trump’s son-in-law and advisor Jared Kushner has a family foundation that has made donations to Israel, including funding of West Bank settlements, which is illegal under U.S. law.

Israel also benefits in other ways, frequently due to legislative action by Congress. It enjoys free and even preferential trade status with the United States and runs a $9 billion trade surplus [24] per annum. Its companies and parastatal organizations can, without any restrictions, bid on U.S. defense and homeland-security projects—a privilege normally only granted to NATO partners—which has given it dominance in some U.S. law-enforcement, telecommunications, and travel-security sectors. Its involvement in the development and use of classified military technologies developed by U.S. arms producers has sometimes led to claims that Israel has adopted and adapted—or even stolen—proprietary information [25] and then used it to develop its own arms industry, which is now ranked sixth in the world [26] by volume of sales. Ironically, U.S. taxpayers have subsidized an Israeli industry that then competes directly with American companies, producing a loss of jobs in the United States.

There has also been considerable collateral damage derived from the relationship with Israel, including the Arab Oil embargo and possibly even some blame for the ruinous cost of Iraq, which many believe [27] to have been fought in part for Israel. But even without that war, the U.S.-Israeli bilateral relationship has been an expensive proposition for Americans. Whether Israel is a strategic liability or not, or whether its complicated geostrategic situation merits virtually unquestioning support from the United States, the reality is that it has a lopsided relationship with Washington. This has long been and continues to be largely paid for by the United States taxpayer, who is not as well off as he once was.

The U.S.-Israel relationship is yet another instance [28] where the perceived needs of an American “ally” take precedence over genuine national interests. Tens of billions of dollars need not necessarily be spent to placate a wealthy foreign country and its powerful domestic lobby. Indeed, other options to employ the money closer to home—in the form of schools, highways, and hospitals—may become increasingly attractive to American voters.

Philip Giraldi, a former CIA officer, is executive director of the Council for the National Interest.

71 Comments (Open | Close)

71 Comments To "The True Cost of Israel"

#1 Comment By Henry On April 14, 2017 @ 11:59 am

It’s not called the Anglo-Zionist empire for nothing.

#2 Comment By Ray Woodcock On April 14, 2017 @ 12:47 pm

The article describes various forms of exploitation of American finances and good intentions. Those who engage in such exploitation are rarely able to stop themselves. There is an adage, “War is too important to be left to the generals.” In other words, the best long-term protections of Jews may be provided by supportive Gentiles who insist on moderation.

#3 Comment By EliteCommInc. On April 14, 2017 @ 1:45 pm

“You can expect a full-blown crisis in the Middle East; with Israel and the United States acting as partners to restore peace and order. It will not be easy.”

Uhhhh, nonsense. The US has no obligation to keep the tissue paper relations among Middle Eastern states together. While the fear mongering has been effective, it’s not real It is however an excuse for Israel to instigate trouble and then lay claim to being at threat. Israel has managed to forge peaceful relations with Saudi Arabia, Egypt, Jordan, and an assorted others. I have no doubt that God who also promises great peace for Israel among her neighbors is quite willing to fulfill those promises as well.

It never fails that some cryptic new threat is entreated to entice US support l’est Armageddon begin today. Since CRISPER is a rather common and available technology what constitutes the “wrong hands is an open question.

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Now should that be the tech you are speaking of I can imagine several potential uses as weapons tech, but then since its applicable to all users, its value there is yet unknown. Whether Muslims create super Muslims or Israel creates super Israelis certainly an interesting concept.

Or maybe the Muslims will use CRISPER to feed their growing numbers as opposed to pine about Israel’s paranoia. It’s the paranoia that is fueling so much of our policy in this region. The end of days, the coming tribulation — when that time comes. There will be absolutely nothing that Us can or should do. If in fact revelation has not already transpired as many think history informs, the deed is done and the chess pieces are in play. If not, I remain unconvinced that the US has any role to play in the matter. Especially as a co-Israeli state as you suggest. Laughing a tad, I think we have become quite acustomed to middle east “full blown crisis” including those in which Israel initiated.
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” So many people know about all the harm Israel brings to the US but do not speak up about it. It’s the fear of financial ruin, career ruin and knowing you will be smeared – that everyone feels.”

No believer in Christ should fear the state of Israel. I agree some very nasty games are engaged to destroy people’s lives and manufacturing falsehood is not beyond their tactics, despite God’s admonition against bearing false witness. I am going to temper my visceral response.

The believer in Christ has surpassed the Jew. That’s what scripture makes clear. That in him there is neither, Jew nor gentile, greek or roman. Everything, and I mean everything of God is bestowed in Christians by Christ. The jewish christian is no more a christian than the christian who was once a pagan. Peter and Paul had this debate when Peter was enticed into thinking that saved Jews had a higher place. Paul, a member of the religious leadership, steeped in the Torah Jewish law and Jewish tradition — said absolutely not and Peter himself relented. If christians want to lend support for Israel, fine. But there should never be any question that doing so is giving to one in a higher place than that established in christ.

In all honesty the Us citizen has blessed Israel to n end, even the lowliest ad poorest of us. he ROI is a matter of question. No Jew should be above heading to the Appalachian mountains or downtown Oakland and saying a “thank you for sacrifice.

#4 Comment By roberthstiver On April 14, 2017 @ 2:09 pm

I don’t think I noted any comment in the article or these — mostly valuable — comments about other economic aspects of the USrael “entangling alliance.” As just one example, a worthy research project (Grant Smith has made an admirable start) would be the machinations of Teva on the US, and global, pharmaceutical industry.

#5 Comment By Chipps On April 14, 2017 @ 2:30 pm

I question the extent to which our interests and Israel’s interests are aligned. I think, for example, that our interests may line up better with Great Britain or Canada or any of the European countries we were allied with during our wars. It seems to many people that Israel is given a pass because of the biblical context in which Christians view the nation and/or people, and because of the evil that was perpetrated during World War II that culminated centuries of abusive, barbaric treatment toward the proud, isolated people.

But, unless I am mistaken, this a country that is so far advanced over any of its neighbors that it is a wonder that they need any support from us at all. What interests of ours are they protecting and what are we getting in return? They would seem more than able to defend themselves militarily if pushed. How is that “business interests” of the United States are benefitting from this relationship, and yet I and many other citizens are unaware of the benefit that we derive?

Whenever anything happens in the Near East that causes us to respond, we are increasingly wondering if we are not drawn in merely as a proxy for Israel or for “business interests.” It is almost to the point where some think of Israel as another State or Territory of our country which most citizens know nothing about. And just like anything else that has happened in our country over the past century, when somehting get started it sets precedent and continues and builds upon itself. And if one dares honestly question the status quo one feels as if one is somehow playing the role of an anti-semite. One is simply not allowed, it seems, in a sense, to question any interaction we have with Israel. And, of course, it goes without saying, that one cannot ever question the loyalty of a citizen in this country who is of Jewish ancestory. And it is not necessarily that any loyalty would be questioned, but that just talking contextually seems to force oneself in a defense posture.

As a Christian, I was raised in my church to have a preference for Israel. This has always been murkily viewed in the context of the second coming of Jesus Christ. Of course, as we mature in our faith, and actually even with the child-like faith, we see that ultimately God is control and our efforts regarding the state of Israel may not matter one bit. It is up to Him. So, it becomes offensive then, when, in Israel, the state adopts policies that are counter to religious teachings about lifestyles. For example, a Christian “retreat/monestary” in Israel was recently found guilty of a crime for not allowing a lesbian wedding to hold a reception at their facility. Ultimately the Christians were fined, I think, the equivalent of about $70 – 75 thousand dollars. The point is that we wonder on all sides of what benefit is Israel to us?

Without meaning to sound paranoid, is there some benefit that only a select few and who are on an elite, higher plane know about or understand? Is there some benefit that we derive when Israel employs espionage against us as they did with the individual named Pollard, that makes us look away from that as of no consequence?

It is troubling to even try and think about this, because there are so many cultural alarms that have been set over 40 years and go off in ones mind when one does question these things. I remember when I pledeged a Fraternity in college – it was the same fraternity that Reagan had pledged in school. The motto at time by other Greeks was “if you can’t go Greek go (insert name of this frat).” In getting to know my pledge brothers I found that one was Jewish. And, innocently, I asked why he had joined this fraternity if he was Jewish. And he immediately responded – to my great suprise – with one of the harshest looks and tones I had ever seen – asking me if I didn’t think he had a right to be in the fraternity. Taken aback, I simply said that I had seen during pledge week that along one of the Frat house streets in the town were two Jewish fraternities and also two Jewish sororities, and I presumed that all they wanted were Jewish members and that those houses were set up for that purpose. He then calmed down and soothingly stated that those guys were just elitists or something to that effect. And yet, as elite as they may be, one is sure that they and him likely share the same affinity for Israel – whatever that means, and that is not meant to come across as me suggesting that is a bad affinity to share.

Simply stated, I think many are somewhat uncomfortable at times with our relationship with Israel as we sometimes seem to be leading them and at other times to be led by them. It just seems that there is something different and not quite kosher with the relationship as contrasted with the relationship we have with other countries. I guess I would like to understand it all better.

#6 Comment By jlevyellow On April 14, 2017 @ 7:01 pm

I am sorry to see the animus directed at Israel. Much of what Mr Giraldi has to say may have some truth associated with it, but the essence of it is that Jews do not or should not have the same access to the American system as the British or the Australians. The presumption is that Israels are less valuable than full Caucasian Christians. The Israelis have proven their value to American on so many levels as to make any doubt about the overlap of values to be unquestionable. Apparently, “values” are less valuable than visual recognition of similarity.

Let me also point out that many of the “perks” that Mr. Giraldi has noted are available to any other non-US group.

These objections raised here, should they become reality, might very well place the
State of Israel in jeopardy. It is incumbent on all who would see Israel disadvantaged to explore the outcomes of a world without Israel. The Left would like Israel to disappear in order to relieve the tension of comparison between a Marxist world and a successful state that combines social justice and entrepreneurial mechanisms. Israel is a light whether she wants to be or not or whether others see that light or not.

#7 Comment By mark On April 14, 2017 @ 7:43 pm

The article only gives part of the cost of this parasite state. The entire cost of the Merkava tank and missile programmes were US funded. They were given WMD/ 400 Warheards by France/ UK/ Norway. Germany gave 6 Dolphin advanced nuclear missile submarines to Israel completely free. Well over £100 billion has been extorted from Germany as “holocaust compensation.” Again, the true figure is much higher. £5 billion was extorted from Switzerland. Read Norman Finkelsteins account of this. There have been attempts to extort similar sums from other countries like France. The jews conform to the worst anti semitic stereotypes by constant leeching on other countries. There is a total Zionist stranglehold in the US and other western countries to a slightly lesser extent in politics, media, finance. They are no longer content to operate behind a screen of bribed and blackmailed stooge goyim and are increasingly taking direct control themselves. Even the mildest criticism of Israel leads to vicious anti semitic smear campaigns like those against UK politicians like Corbyn and Livingstone. They all know it is political suicide not to kowtow to Zionists.

#8 Comment By James M Schroeder On April 14, 2017 @ 8:16 pm

I think the deference towards Israel, at the expense of the U.S. Tax payer, has a religious element to it that Giraldi doesn’t address. I’m talking about the unwavering support of Israel by the 50 million strong Christian Evangelical community, who commonly hold to the belief that the modern Israeli state is the seed mentioned in Gen. 12 and 17, which says that those nations who bless Abraham’s seed (Israel) will in turn be blessed, and those who don’t will be cursed. This is also heavily promoted by pro-Israel organizations like CUFI, started by Evangelical preacher, John Hagee, Who has had numerous Israeli pols, including Benjamin Netanyahu, speak to his church congregation.

#9 Comment By EliteCommInc. On April 14, 2017 @ 11:49 pm

“I guess I would like to understand it all better.”

Allow me. You understand it quite well in my view.

#10 Comment By Greg Bacon On April 15, 2017 @ 6:10 am

American taxpayers have spent an obscene about of money protecting Apartheid Israel, like all of those US Navy and USAF units stationed in the ME and its waters. We’re told it’s to protect the oil lanes, but that’s just a cover:

Why are U.S. armed forces in the Persian Gulf anyway? Princeton University’s Roger Stern calculates that between 1976 and 2010, Washington has spent an eye-popping $8 trillion protecting the oil flow in the Persian Gulf. As of 2010, the U.S. only received 10 percent of those oil shipments. The largest recipients were Japan (20 percent), followed by China, India, and South Korea.

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While the USA infrastructure falls apart, approaching 3rd world status, we get told there’s no money to repair roads, bridges, water piping, dams, schools, electrical grid, etc, but they always find billions for Israel.

#11 Comment By Chipps On April 15, 2017 @ 8:34 am

Two points of view – support or not support – Israel from a biblical perspective:

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#12 Comment By William bennett On April 15, 2017 @ 3:25 pm

Comments that reveal the primary problem, an acceptance that Israel is divinely chosen. Such beliefs are only sustaable in an environment of crass ignorance which is an indisputable definition of American world awareness. Israel is the most despised state in the history of mankind, the most genocidal, the most racist, the most parasitical, the most deceitful, the most treacherous. Israel suffers self hatred ( Wales does,n t ) it has significant numbers of military personnel incarcerated who refuse to murder defenceless civilians, like America it is dominated by the vile extremism of Zionism that controls western msm, TV, film industry, finance, advertising, magazine and book publishing. Add to that the fact you never read a significantly informative book in your whole life and well go figure goy.

#13 Comment By hmpiel On April 15, 2017 @ 3:27 pm

The forced spending of American aid in the US is real. The main caster of parts for Israel’s tanks lost that business to ‘American aid’. How do I know? From speaking with them. Now whose jobs is American aid costing?

#14 Comment By Aviel On April 16, 2017 @ 3:35 am

just checked some comments which referred to what I wrote. for sureI was speculating as are we all. we for certain don’t have access to the complex realities of all that is behind usa financial support for israel. if it’s true as some here wrote that the usa gains nothing of value from their investment in Israel , and in fact loses than the politicians authorizing this waste should be removed. as i stated my opinion as an israeli is the best thing for israel would be to be more independent of the usa. for sure we are trying .with the hi tech boom prosperity in many sectors are a reality in israel, although like in the us many are still left behind. also witness bibi’s recent visits to russia ,china and india among other nations which hopefully will lesson financial dependency on the usa.
may the lord grant israel continued and speedy success and as prophesied all the righteous of the world will benefit.

#15 Comment By PAXNOW On April 16, 2017 @ 2:06 pm

As a young boy I rode my peddle bike into a gas station in a small town to get air. The two owners were speaking about the recognition of Israel as a nation. One said “This is the beginning of the end of the world prophecy.” I had no idea of what he was speaking about. I do know that Israel has been busy since uprooting people and having wars galore with its neighbors and always hiding behind Uncle Sam when it gets in over its head. I am glad my kids are no longer in the service and cannot be offered up in the crucible of war on behalf of this very foreign nation. If they want to fight. Do it without the U.S.

#16 Comment By David Westerlund On April 16, 2017 @ 7:32 pm

The Jewish control of the U.S. has been here for at least 100 years. Dodge Brothers (cars) used the 6 pt. Jewish star as their emblem about 1928. Henry Ford almost lost his company about the same time. I 1933, when Hitler came to power, he saw the problem i.e. the Jews controlled the banks so Hitler nationalized the banks and put many Jews out of work. As far as what happened to the Jews during WWII is easy to explain, but requires looking at the other side. And the gas chamber @ Auschwitz was built after WWWII as a replica. But if you believe hearsay rather than forensic evidence and common sense, keep watching Hollywood.

#17 Comment By David Aternlight On April 17, 2017 @ 9:30 pm

This discussion is full of half-truths and lies, some smelling like anti-semitism. I’ll discuss one I know I lot about as an energy economist. Analysis of OPEC price rises during the embargo show that when the US adopted pro-Israel policies prices did not rise. When for long periods the US did nothing favorable to Israel prices did not fall. OPEC price actions were, however, tightly correlated with the tightness or looseness of oil markets in Western Europe, just as rational economics teaches. Further, as both US policy makers and OPEC officials know, oil is perfectly fungible and the “embargo” simply caused shifts in supply patterns. The only “shortages” were caused by bad allocation and price controls in the US. Farm areas were awash in gasolene while cities had lines. Just as oil economists forecast, as soon as controls were dropped the market shifted distribution rationally and gasolene prices dropped dramatically.
David Sternlight, PhD, MIT, LSE

#18 Comment By Tom Blair On April 18, 2017 @ 10:15 pm

Very illuminating and courageous article. Thank you Mr. Giraldi and thank you American Conservative.

#19 Comment By Sam J. On April 20, 2017 @ 11:01 am

“…[No] explanation can account for the remarkable level of material and diplomatic support that the U.S. provides.”…”

Here you go…blackmail, media control and murder.

#20 Comment By ag On July 5, 2017 @ 12:27 pm

What this means is that the US will always be on a Quatrillion Debt to protect Israel? If they are the #1 arms&security suppliers in the World why do they need our protection? This does not adds up..so why talk about the US Debt 24hours a day 7days a week if it will always be a FOREVER DEBT! Stop saying that we have this DEBT if it is a voluntary debt.

#21 Comment By Danny Thom On August 15, 2017 @ 4:54 pm

What did you mean when you stated James Traficant was unreliable? He was a good man.