In my opinion, here is another fine
example of domestic political expedience triumphing over economic
rationality. Of course, money isn't everything, but one also has
to ask: what will we ultimately have to show for our national
"investment?" And why do our politicians persist in throwing
good money after bad when it is so obviously counterproductive? Might
this be an example of the special interest influence we were discussing
a few days ago in the "median voter" thread?
~Alypius
http://www.csmonitor.com/2002/1209/p16s01-wmgn.html
Since 1973, Israel has cost the United States
about $1.6 trillion
By
David R.
Francis | Staff writer
of The Christian Science Monitor
Since 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.
This 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 lobby.
For 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.
And 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
economy.
Considering 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
out.
Israel's 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.
Israel 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.
Adjusting 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.
"Consequently, 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.
These
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 little
known.
One huge cost is not secret. It is the higher cost of oil
and other economic damage to the US after Israel-Arab wars.
In
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.
That 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
billion.
Afraid 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.
Other 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 billion
in "housing loans." Stauffer expects the US Treasury to cover
these.
• 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.
US 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.
Stauffer's 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 Israel.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Peace
is patriotic!
Michael Santomauro
Editorial
Director
http://RePortersNoteBook.com
New York City
Feel free to call anytime
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