Israel would not survive as a separate state without the ongoing supply of arms, aid, and military technology by the United States. Since 1976, Israel had been the largest annual recipient of U.S. foreign assistance, totaling $81.3 billion over the last half century and currently running at about $3 billion a year, with about $1.8 billion a year in Foreign Military Financing (IMF) grants from the Department of Defense and an additional $1.2 billion a year in Economic Support Funds (ESF) from the Department of State. 17% of all U. S. foreign aid is earmarked for Israel.
Israel is one of the United State's largest arms importers. In the last decade, the United States has sold Israel $7.2 billion in weaponry and military equipment, $762 million through Direct Commercial Sales (DCS), and more than $6.5 billion through the Foreign Military Financing (IMF) program.
Israel has the world's largest fleet of F-16s outside the U.S., currently possessing more than 200 jets. Another 102 F-16s are on order from Lockheed Martin.
The United States has also underwritten Israel's domestic armaments industry, by giving:
- $1.3 billion to develop the Lavi aircraft (cancelled)
- $625 million to develop and deploy the Arrow anti-missile missile (an ongoing project)
- $200 million to develop the Merkava tank (operative); the latest version, the Merkava 4, uses a German V-12 diesel engine produced under license in the U. S. by General Dynamics
- $130 million to develop the high-energy laser anti-missile system (ongoing).
The U.S. also gives Israel weapons and ammunition as part of the Excess Defense Articles (EDA) program, providing these articles completely free of charge. Between 1994-2001 the U.S. provided many weapons through this program, including:
- 64,744 M-16A1 rifles
- 2,469 M-204 grenade launchers
- 1,500 M-2 0.50 caliber machine guns
- 0.30 caliber, 0.50 caliber, and 20mm ammunition
The Israeli Arsenal contains, amongst others, the following US weaponry:
50 F-4E Phantoms, 98 F-15 Eagles, 237 F-16 Fighting Falcons, 42 AH-64 Apache Attack Helicopters, 57 Cobra Attack Helicopters, 38 CH-53D Sea Stallion Helicopters, 25 Blackhawk Helicopters, various missile systems (Maverick, Hellfire, TOW, Sparrow, Sidewinder, Patriot, and Harpoon and Anti-Ship Missiles).
Thousands of Palestinians have thus been killed and tens of thousands been wounded by American weaponry which by US laws are prohibited from being used for non-defensive purposes. Israel would, of course, claim that all its actions are in defence of its security, but this view is neither shared by human rights organisations nor the UN whose employees have also been amongst the casualties.
Speaking at a briefing of the Center for Policy Analysis on Palestine (CPAP) in May 2002, Thomas Stauffer, an international oil and finance consultant, added to these direct costs the indirect costs to the American public for their governments uncritical support of Israel, citing the need for foreign aid to other countries as a result of America's support for Israel and the billions of dollars in lost trade, contracts, jobs, and business ventures in the Middle East.
U.S aid to Turkey, which amounts to billions of dollars annually, is linked to Turkey's relationship with Israel, which in turn is linked to U.S. policy toward Israel. Billions of dollars in U.S. aid to Central Asian countries, under the pretext of promoting emerging democracies, are part of U.S. efforts to confine Iran, which again is tied to U.S. policy toward Israel. The same applies to the countries of the Caucasus. Contributions by Jewish organizations and individuals are another element of consequential aid to Israel. These latter contributions, averaging from $1-1.5 billion are tax-deductible.
Then there are other, even harder to track forms of aid because there is no government overview. One example comes from the Central Bank of Israel's statistics which show that in the 1980s the United States bailed out the Israeli banking system at a cost of $10‑12 billion. Americans probably never knew this because there is no trace of the money in American records. Israel has never returned the money and is unlikely to be asked to return it. Furthermore, the United States has undertaken loan guarantees from various sources totalling about $10 billion, of which $7 billion have been initialled. Stauffer called this a "contingent liability" on the United States, because Israel has no prospect of repayment.
Jewish immigration from Russia to Israel, also a hidden cost, is subsided by the United States with some $60-100,000 million annually. And then there are the losses to U.S. military institutions. According to Stauffer, the United States has poured billions of dollars into Israeli military technology, technology that is in direct competition with that of the U.S., citing the Israeli Lavi fighter program and Arrow missile system as examples. Israel enjoys large discounts on what are considered "surplus" U.S. arms, and Israeli military firms have the upper hand in relationships with U.S. military firms. U.S. contractors are required to subcontract Israeli firms for military components, subcontracts that would otherwise have gone to American firms. Furthermore, for every dollar of military equip ment the United States gives Israel, the United States buys 60 cents worth of Israeli equipment. The difference here is that while the United States pays with real money, Israel does not.
Another "consequential" cost to the U. S. economy with a potential price tag of $20-30 billion a day is the oil supplies guarantee. Should Israel's oil supply be cut off, the United States guarantees to provide Israel with oil regardless of U.S. oil supply levels.
Another hidden cost to the U. S. economy with a direct effect on the American people is trade losses with Israel and with those countries Israel perceives as hostile. Stauffer's data reveal that the United States' trade deficit with Israel is about $5-5.5 billion. One reason for this is that Israel, for example, can buy textile from China, re-label it, and sell it to the
United States duty-free. But the real reason behind the losses, said Stauffer, is the trade imbalance between the United States and Israel. While the United States pays real money for its imports from Israel, Israel does not pay real money for its imports from the United States. The result is an annual trade imbalance of just under $10 billion. In terms of jobs, that comes to about a quarter of a million American jobs lost.
U.S. sanctions on Libya, Syria, Iran, and Iraq-sanctions linked to U.S. policy toward Israel are costing the U.S. economy about $14 billion annually in potential trade, Stauffer added, basing his calculations on trade and economic studies. The sanctions, which only affect U. S. companies and not their competitors, translate into 500,000 to 600,000 in lost U.S. jobs. U.S. policy toward Iraq, presented to the American people in terms of protecting Gulf oil supplies, is really meant to weaken Iraq, seen by Israel as a potential threat. The Israeli lobby in the United States has foiled major U.S trade contracts with Arab and Muslim countries, like the 1980s aircraft sales contract with Saudi Arabia that cost the U.S. economy between $20-25 billion annually.In return Zionist organisations in the United States sweeten the pill by providing political financing for Democrats and Republicans during election campaigns. The American public, on the other hand, are the net losers.