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U.S. Aid to Israel
Moreover, the U.S. Government was asked to help alleviate Israel’s financial problems. A $4.8 billion bond issue, the largest ever in the history of the New York Stock Market, was arranged to refinance Israel’s high interest bearing debts. Because of Israel’s credit unworthiness, the U.S. government had to guarantee 90 percent of the bonds’ value. As a result, the bonds were sold on the New York Stock Market within days last September, and Israel was able to save $290 million a year in interest. Consequently, the U.S. Treasury will now lose an equivalent amount every year for many years to come. The bailing out of Chrysler Corporation during the Carter Administration was the subject of much controversy despite the fact that Chrysler is an American company employing tens of thousands of Americans. In contrast, the bailing out of the Israeli treasury, which subsidizes Israeli corporations competing with American products, stirred no controversy, not even an interest by the American media. Israel’s economic and financial problems have been the result of a political strategy aimed at maintaining Jewish occupation of Arab land and a socio-economic strategy intended to sustain an artificially high standard of living to attract more Jewish immigrants. By increasing aid levels without conditions, the U.S. Government has, in effect, committed itself to underwriting the cost of Israel’s strategy, thus enabling Israel to continue its military adventures and at the same time live beyond its economic means. A former Israeli Finance Minister said, “The prosperity of the last seven years [the Likud years] was not real. People had a high standard of living at the expense of future generations or someone else outside of Israel, for instance the American people or Jewish people around the world. To live at the expense of someone else is easy; it happens with individuals and it can happen with states.”29 Military Assistance U.S. military assistance to the Jewish state, which is intended to maintain Israel’s qualitative edge over its Arab neighbors,30 has been very impressive. From 1948 to 1989, the U.S. Government has given Israel about $28 billion in military aid. Of that total, about $11.2 billion was provided as loans and almost $16.5 billion as grants. [Consult Table 4, PDF version, for details.] U.S. military assistance to Israel remained insignificant until the mid-1960s. In 1966, assistance began to increase substantially, but the level remained below $100 million per year until 1971. In 1974, military grants were extended for the first time as the U.S. government waived repayment of some 60 percent of the $2.5 billion given to Israel in military aid in that year. This practice continued through 1984, after which all U.S. aid to Israel was converted into outright grants. In 1967, Israel fought and won the biggest and probably the most decisive war in its history, when it occupied the West Bank, the Golan Heights, the Sinai and the Gaza Strip. France, which warned Israel against invading the territories of its Arab neighbors, stopped supplying Israel with arms. Consequently, the U.S. emerged as Israel’s major supplier of arms and its only backer concerning the position it adopted vis-a-vis the future of the occupied territories. Israel’s claim that it was the only Middle East state to promote Western values and defend American interests against Soviet threats provided extra justification for those U.S. Government officials and legislators who were determined to support Israel’s military build-up and its occupation and possible annexation of Arab land. Aid levels were raised every time Israel went to war against its Arab neighbors. Following the 1967 Six Day War, military aid was increased from $7 million in 1967 to $25 million in 1968 and $85 million in 1969. In 1974, after the 1973 October war, Israel received $2.5 billion in U.S. military assistance, up from $307.5 million in 1973, an increase of 810 percent in one year. Following the invasion of Lebanon, military aid was increased from $1.4 billion in 1982 to $1.7 billion in 1983. In 1967, Israel was given $1.7 billion in military aid after signing the disengagement agreements with both Egypt and Syria. For signing the Camp David peace treaty in 1979, the Carter Administration gave Israel $4 billion in military aid, $1.3 billion of which was an outright grant. In late 1985, when Israel sent its Air Force to attack Tunisia, Congress approved a supplemental grant of $1.5 billion to strengthen Israel’s military and support its faltering economy. In 1987, the year which witnessed the full exposure of Israel’s role in both the Iran-Contra affair and the Pollard spy case, Israel was granted “major non-NATO” ally status, and in 1988 it became “the largest foreign participant in the U.S. Strategic Defense Initiative program,” according to SDI director Lt. Gen. James Abrahamson.31 In 1986, Senator Kasten proposed a new bill to allow the Jewish state to borrow U.S. military equipment free of charge. He said that the proposal was “prompted by the positive experience of the U.S. Navy, which last year entered into a leasing agreement with Israel wherein the Israeli Air Force leased a squadron of Kfir jet fighters to perform the aggressor role in certain training programs conducted by the Navy.32 In 1984, the Israeli government offered the U.S. Navy a free loan of 12 Kfir jet fighters, an offer the Navy Secretary, John F. Lehman, Jr., hailed as a major example of cooperation between allies. In April 1985, when the first Kfirs were delivered to the U.S., Lehman said, “This marks a major event for us, because the Israeli Government has made three aircrafts available to us at no cost to the U.S. taxpayer It will save a lot of money for both governments in the future.”33
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