18 November 2012
Investment not aid
With the Pillar of Defence† operation continuing for its fifth day expect more moral relativity articles like Israel and Palestinians get billions in foreign aid from the US, but for different reasons Briefly summarising: the GlobalPost article notes Israel has received more foreign aid than Palestine and receives it as military rather than economic support and social services the Palestinians. BAD, BAD … BAD
In Dollars & Sense I raised the argument for giving up on American aid could be in Israel’s interest. In my reply to the GlobalPost article I show the nature of foreign aid why, at least in the Israeli case, it’s an investment that benefits America. How many other aid recipients can say that?
Aid comes in more than one form
There are many dubious claims in this article and some serious omissions. Where did the $115 billion figure come from? The link to a study U.S. Foreign Aid to the Palestinians makes 98 mentions of Israel but nothing about the amount of aid it received since establishment nor is there any table with aid figures for any country (using that term in its loosest definition) other than Palestine.
What does the figure mean, anyway? Is this the dollar amount or is it weighted with the changing value of the dollar? If so to what year is it zeroed? American contributed some $13 billion to the Marshall Plan, in 1948, when the U.S. GDP was only $258 billion. It is now an estimated $15.09 Trillion! If converted to dollars at today’s value it could be well above that given to Israel.
Nor does the article define what it considers to be aid. America contributes about 25% of the NATO budget, all of which is fungible. That is, can be spent where each country desires. Israel by comparison is obliged to spend it in America which becomes in effect a subsidy for American industry.
Is military aid a bad thing? While the NATO contribution does not figure in American foreign aid figures it nevertheless functions as aid. One of the strongest criticisms of the Marshall Plan was that it equaled the funds these countries used to finance their military actions against their colonial subjects in East Asia, in French Indochina and the Netherlands East Indies respectively. NATO doesn’t even hide this. The member countries can and do use their American subsidized militaries as they will without the implied criticism given to Israel, and only Israel.
For the record the current ‘biggest ally’ of the United States in terms of acknowledged (not hidden in the Defense budget) aid is not Israel. Nor are Jordan and Egypt, who are major recipients. It is Afghanistan.
America receives more than it gives
The omissions are equally puzzling. Surely, in a report on aid the question needs to be raised, what does the donor gain from this aid? Every report ever presented to Congress. Senate or the President has come to the same conclusion. Even if judged purely in economic terms the United States has received as much or more from Israel as it has given. How many other countries can make that claim?
As mentioned before aid to Israel is effectively a subsidy for American industry but there are many other benefits. Put a dollar price on them.
Israel buys American equipment and improves it and then returns the combat-tested technology to the manufacturers. This expands the perceived value of these items in the eyes of foreign militaries, both in terms of performance and in the sense of using equipment that wins wars. For example, Israel is responsible for over 600 modifications in the current generation of General Dynamics’ F-16 fighter aircraft.
It also improves the defense of America. The illustration of the Iron Dome is a case in point. The largest single loss of life among Coalition forces in the Gulf War happened when an Iraqi Al Hussein (missile) hit an American military barrack in Dhahran, Saudi Arabia, killing 28 U.S. Army Reservists. Iron Dome would have destroyed the missile in the air. Although developed for Israel and largely by Israel it will be part of the standard equipment of American forces facing this type of attack.
The late General Alexander Haig, who was NATO’s Supreme Commander and US’ Secretary of State, defined Israel as “the largest, most battle-tested and cost-effective US aircraft carrier, which does not require a single US boot, cannot be sunk and is located at a most critical area. If Israel did not exist, the US would have to deploy a few more real aircraft carriers to the eastern flank of the Mediterranean, costing $20 billion annually, which has been spared by the Jewish State.”
Or in the words of this article. Aid to Israel over 63 years would be paid off in less than six years from the savings to America.
The benefit is hardly only military. Major American hi-tech companies such as Intel, IBM and Microsoft have research facilities in Israel. Take Israeli development out and virtually every computer and mobile phone in the world would be a door-stopper and paperweight.
Would someone like to inform me what America receives from Palestine? It certainly isn’t love and unless Mahmud Abbas deposits his estimated $100 million fortune in J. P. Morgan Chase’s bank it doesn’t look like any of the Aid it receives will ever be paid back. That should have been mentioned in this article. It wasn’t.
†In Hebrew the current operation has been named Pillar of Cloud (עַמּוּד עָנָן) From Exodus 13:21-22. By day the Lord went ahead of them in a pillar of cloud to guide them on their way and by night in a pillar of fire to give them light, so that they could travel by day or night. Neither the pillar of cloud by day nor the pillar of fire by night left its place in front of the people.
Photograph of Iron Dome CRAM launcher near the town of Sderot.from Wikimedia Commons. Photographer NatanFlayer