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U.S. Aid to Israel
Aid given to Egypt to keep the peace with Israel is about $2.3 billion a year. Another $200 million represents U.S. annual contributions to UNRWA, peacekeeping missions, and improving security around U.S. embassies in the Middle East. Indirect aid intended to pacify Israel’s victims and improve the security of the Jewish state, therefore, adds another $2.5 billion to the cost of supporting Israel. Extra military expenditures the U.S. has been paying because of its commitment to Israel’s security cost another $1.5 billion a year. The cost of borrowing the funds appropriated for both Israel and Egypt add about $500-600 million a year. Aid to Egypt and other security expenditures, therefore, add up to more than $4.5 billion a year. When all the above expenditures, grants, and subsidies are totalled, the annual cost of supporting Israel comes to more than $12.5 billion a year. In addition, the cost of supporting Israel should also include the loss of military and commercial sales to Arab countries, estimated at about $8.5 billion a year. Thus, the total financial cost of supporting Israel amounts to a stupendous $21 billion a year. On September 23, 1984, the Washington Post said that “Reagan proposes to spend six times more on aid to Israel in the coming year than on energy conservation in the U.S.; twice as much as on domestic, consumer and occupational health and safety programs; and about the same amount as the combined worldwide spending of the State Department and the Peace Corps, plus all the contributions to the U.N. and its agencies.”77 During fiscal year 1983, when the Reagan Administration was cutting the child nutrition program, mass transit, and the Food Stamp Program, the Administration proposed a substantial increase in aid for Israel. Congress, however, wanted more aid for Israel than the Administration had requested; and as a result, Israel received $300 million more than the 1982 figure. That increase alone could have restored the $280 million cut from the child nutrition program. The $1.7 billion in military aid given to Israel for that year could, moreover, have covered the costs of the Food Stamp Program and the mass transit projects that were cut.78 Israel’s economic problems are structural and deep-rooted and therefore cannot be overcome in a reasonably short period of time. Israel’s foreign debt of about $32 billion is the highest in the world in terms of per capita income and in relation to its GNP. In fact, Israel’s per capita foreign debt is about five times that of Mexico. More than 60 percent of the Israeli budget—about $26 billion in 1988—is devoted to military spending and debt servicing. Israel’s military budget absorbs 27 percent of the total GNP. In comparison, the U.S. defense budget comprises about six percent of the GNP, Britain five percent, France four percent, Sweden three percent and Japan only one percent. Furthermore, Israel’s budget has been for several years as large as, or even larger than, the country’s GNP. The U.S. budget, in comparison, is about 23 percent of the GNP, despite a large and worrisome deficit. Israel, in fact, is the only country in the world, possibly in history, to have a budget that exceeds its GNP. If Israel is to reduce the magnitude of its financial problems to a level comparable to that of the U.S., it must reduce the budget by about 75 percent or increase its GNP four times without increasing the budget. Neither of these goals could possibly be achieved in 10, 20 or even 50 years. Eitan Shishinsky, a professor at the Hebrew University, said in 1985, “The U.S. today is Israel’s main rescuer, and we are critically dependent on its aid.”79 Yigal Hurvitz, former finance minister in Israel, said, “If someone tells you that a day will come when we won’t need loans or aid, don’t believe them.”80 Avivi Yarin, physics professor at Tel Aviv University, said, “with all their magnitude, economic mistakes are not the only cause of the present economic slump; political decisions and errors are perhaps even more important... Nevertheless, it is amazing how few people, especially in Israel, recognize that at times it should be possible, or even imperative, to find economic solutions outside the domain of economics... Just as political ideology was a decisive factor in the deterioration of Israel’s economy, so must a new and courageous political approach serve as a main instrument for pulling the country out from the economic quicksand into which it has sunk.”81 Massive U.S. aid, which has prevented the collapse of the Israeli economy in the past, will have to increase year after year to prevent a collapse in the future. But no matter how great U.S. aid to Israel might be and no matter how long it continues, it will not postpone forever the demise of Israel’s economy. The price which the American people are repeatedly being asked to pay for keeping a dying economy alive is very high and growing higher, without any end in sight.
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