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| Economist tallies swelling cost of Israel to US | eMail to a friend
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Posted on December 10, 2002
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: 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. Editor's note: A previous version of this story incorrectly reported the
amount of housing loans guaranteed by the US. Click
here to view the full article at the Christian Science Monitor.
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