”….obviously counterproductive?”
Why? You see NO benefits at all from these expenditures, is not one the
fall of the Soviet Union? We countered each effort of the Soviet Union to expand in the “cold
war.” So funds spent back as far as 1973 helped in that
effort. Is fall of USSR a benefit that was worth paying? Was it worth stopping
Soviet Expansion and supporting a democratic society in the Middle East? Do we not benefit
from the more free market societies around the world post USSR? We can argue on the
value, but to imply we got nothing is a little one sided. Along with
other benefits do they counterbalance the costs? Does more
investment increase those benefits or assure continuation of prior benefits?
The article is very one sides. Talks
to lost jobs by Israel block of weapons purchase by Saudi Arabia but doesn’t
recognize jobs from weapons sales to Israel. Blame the oil embargo on Israel. Scherer’s
book on industries has a good chapter on oil industry and the embargos that
never mentions Israel. I think appropriately so.
jdd
John D Driessnack, PMP, CCE/A
Professor, Defense Acquisition University
-----Original Message-----
From: Alypius Skinner
[mailto:[EMAIL PROTECTED]]
Sent: Tuesday,
December 10, 2002 1:14 PM
To: [EMAIL PROTECTED]
Subject: Fw: cost of subsidizing a
prodigal son
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?
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.
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Peace is patriotic!
Michael Santomauro
Editorial Director
http://RePortersNoteBook.com
New York City
Feel free to call anytime 24hours 212-787-7891
http://reportersnotebook.com/newforum/indexforum.html
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