Has Israel “bankrupted” the United States?

August 24, 2008, 9:20 pm


By Andrew L. Jaffee

U.S. financial assistance to Israel can be a contentious topic, even when discussing foreign policy issues using accurate information. Very often, opponents of Israel use wildly exaggerated, even fabricated “facts and figures” and extremely hyperbolic language to disparage the Jewish State — even claiming the U.S. has been pushed to the verge of bankruptcy by supporting Israel. The obfuscations about U.S. aid to Israel have been bothering me for a very long time, so I decided to research the numbers myself and compare my findings to the figures advanced by hysterical critics of Israel.

For example, an anti-Semitic publication, which so innocently calls itself the “Washington Report on Middle East Affairs” (WRMEA), claims that American taxpayers have paid “$3 Trillion” for supporting Israel. WRMEA tries to blame Israel for 1) rising oil prices, 2) the cost of both Iraq wars, 3) and American job losses, and has published articles with Protocols-of-the-Elders-of Zion-style headlines like “Israel has had in place a shadow government in Washington” and “Will the State Department Remain Israeli-Occupied Territory?”

Here I’ll show how exaggerations by groups like WRMEA are not even close to reflecting reality.

Bare with me as I run the numbers and document my findings.

The preliminaries

  • $1,000,000,000 = $1 billion
  • $1,000,000,000,000 = $1 trillion
  • 2007 aid to Israel: $2.5 billion (ref, ref)
  • 2007 U.S. GDP: 13,543.330 billion (ref)
  • 2007 U.S. Federal Budget (receipts): $2,415,852,000,000 (trillion; ref)

Running the numbers

  • $2,500,000,000 / $13,543,330,000,000 = 0.00018 * 100 = 0.018%
  • In other words, U.S. aid to Israel is 0.018% of one year’s U.S. GDP
  • $2,500,000,000 / $2,415,852,000,000 = 0.00103 * 100 = 0.103%
  • In other words, U.S. aid to Israel is 0.103% of one year’s U.S. federal budget

Stock Photos from 123RF

U.S. Bankruptcy?

How exactly is aid to Israel “bankrupting” the U.S.? U.S. businesses (and workers) exported $128 billion in goods to Israel from 1989 to 2007. That’s more than double the aid provided to Israel during the same period. Granted, Israel exported products to the U.S., and I could provide balance of trade numbers, too. Should we deny Americans the products they wish to purchase from a loyal ally? No.

I’m still not sure how the U.S. is being “bankrupted,” especially given economic performance:

  • U.S. GDP was $9,953 billion in October 2000 and $14,201 billion in January 2008.
  • Monthly unemployment rate during the same period averaged about 5.1% — a tad lower than during Clinton’s years. Pretty good for an industrialized/Western nation.
  • CPI (inflation) has averaged 3% like it has for almost a century.

Aid to Egypt

Strange, I haven’t heard many claims that U.S. aid to Egypt is bankrupting America.

Examples of U.S. aid to Egypt:

  • 2002: $2.0 billion
  • 2003: $2.2 billion
  • 2005: $1.8 billion
  • 2006: $1.8 billion

Aid to the Palestinians

I haven’t heard many complaints about U.S. aid to the Palestinians. Indeed, those complaining loudest about aid to the Palestinians say that America is not funneling enough money to the West Bank and Gaza.

  • From Reuters: direct U.S. aid to Palestinians in 2008 will be $550 million; plus $148 million through the UN; plus $228 million in loan guarantees.
  • $550 m + $148 m + $228 m = $918 million in 2008

From the Congressional Research Service (CRS) – U.S. Assistance to the Palestinians:

  • 1999: $85.034 million*
  • 2000: $75,000 million*
  • 2002: $72.000 million
  • 2003: $134.484 million
  • 2004: $74.558 million
  • 2005: $274.400 million
  • 2006: $150.000 million
  • 2007: $50.000 million (CRS)

*Note also: “… the U.S. Government committed to provide $500 million over a 5-year period (FY 1994-FY 1998) for a program of assistance to the Palestinian people …”

Let’s total it up: $2333.476 million =~ $2.3 billion in aid to the Palestinians. Not bad for two “governments,” the PA under the PLO/Fatah and PA under Hamas, sworn to the destruction of our ally Israel.

Total Aid to Israel

Israel has received $100 billion in U.S. aid since 1949 according to the Congressional Research Service (CRS); $80 billion according to the Harvard Israel Review. The CRS numbers “only” differ from WRMEA by $900 billion. The Harvard University figures contradict WRMEA by “only” $920 billion.

Sadly, such wild exaggerations are hurled in Israel’s direction constantly. Those people who support the Jewish State find themselves constantly defending Israel not only from hyperbole, but from bold-faced lies.

Related: Anti-Semitism, Economy, Israel, Media/Blogsphere, Racism

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