The Myth Of Israeli Dependence Of U.S. Aid
One myth, prevalent mainly among various Israel-haters, but also among some of its AIPAC-affiliated supporters is that Israel is dependent on U.S. aid, and that an end to that aid, would doom, or at least greatly weaken Israel.
First it must be noted that the amount Israel receives has stayed virtually unchanged in nominal terms since the late 1990s at roughly $3 billion per year, while Israeli GDP at the same time has increased in nominal terms from about $100 billion per year to $300 billion per year.
If Israel was able to withstand a two thirds reduction in the relative importance of aid without trouble, then surely the removal of the remaining third shouldn't be much trouble.
Secondly, it should be noted that since 2007 Israel receives no economic aid, no cash trasfers, at all from the U.S. government. Aid to Israel instead consists entirely of subsidies of weapons purchases, almost all of which is purchased from U.S. weapons manufacturers. So, "aid to Israel" is almost as much a subsidy of U.S. weapons manufacturers as of Israel.
So, if hypothetically, aid to Israel was ended, this would mean that Israel's defence budget would have to be increased somewhat as weapons purchases would be somewhat more expensive. But as there would no longer be a requirement that most weapons must be purchased from the U.S., this would stimulate domestic weapons production, and perhaps make it profitable for Israel to develop its own fighter jets, instead of purchasing various U.S. made "F" (-15, -16, -18, -35) fighter jets.
The benefits to domestic weapons production perhaps wouldn't fully compensate for the higher cost of military spending, but to a large extent it would. So the net loss for Israel for cancelled aid would at most be a few tenths of a percent of GDP. Perhaps not positive, but definitely manageable.
First it must be noted that the amount Israel receives has stayed virtually unchanged in nominal terms since the late 1990s at roughly $3 billion per year, while Israeli GDP at the same time has increased in nominal terms from about $100 billion per year to $300 billion per year.
If Israel was able to withstand a two thirds reduction in the relative importance of aid without trouble, then surely the removal of the remaining third shouldn't be much trouble.
Secondly, it should be noted that since 2007 Israel receives no economic aid, no cash trasfers, at all from the U.S. government. Aid to Israel instead consists entirely of subsidies of weapons purchases, almost all of which is purchased from U.S. weapons manufacturers. So, "aid to Israel" is almost as much a subsidy of U.S. weapons manufacturers as of Israel.
So, if hypothetically, aid to Israel was ended, this would mean that Israel's defence budget would have to be increased somewhat as weapons purchases would be somewhat more expensive. But as there would no longer be a requirement that most weapons must be purchased from the U.S., this would stimulate domestic weapons production, and perhaps make it profitable for Israel to develop its own fighter jets, instead of purchasing various U.S. made "F" (-15, -16, -18, -35) fighter jets.
The benefits to domestic weapons production perhaps wouldn't fully compensate for the higher cost of military spending, but to a large extent it would. So the net loss for Israel for cancelled aid would at most be a few tenths of a percent of GDP. Perhaps not positive, but definitely manageable.
posted by stefankarlsson at 7:01 PM
2 Comments:
"If Israel was able to withstand a two thirds reduction in the relative importance of aid without trouble, then surely the removal of the remaining third shouldn't be much trouble."
This is in my opinion a reasoning that is not correct. Perhaps that remaining third of the aid consists of stuff which is utterly important and the first two-thirds consists of unimportant stuff.
Flute: note that "ending aid" doesn't mean ending weapons shipments. It means ending subsidies of weapons shipments and that Israel, like for example Saudi Arabia, pays the full price of the weapons they get.
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