- While it is commonly reported that Israel officially
receives some $3 billion every year in the form of economic aid from the
U.S. government, this figure is just the tip of the iceberg. There are
many billions of dollars more in hidden costs and economic losses
lurking beneath the surface. A recently published economic analysis has
concluded that U.S. support for the state of Israel has cost American
taxpayers nearly $3 trillion ($3 million millions) in 2002
- "The Costs to American Taxpayers of the
Israeli-Palestinian Conflict: $3 Trillion" is a summary of economic
research done by Thomas R. Stauffer. Stauffer's summary of the research
was published in the June 2003 issue of The Washington Report on Middle
- Stauffer is a Washington, D.C.-based engineer and
economist who writes and teaches about the economics of energy and the
Middle East. Stauffer has taught at Harvard University and Georgetown
University's School of Foreign Service. Stauffer's findings were first
presented at an October 2002 conference sponsored by the U.S. Army
College and the University of Maine.
- Stauffer's analysis is "an estimate of the total cost
to the U.S. alone of instability and conflict in the region - which
emanates from the core Israeli-Palestinian conflict."
- "Total identifiable costs come to almost $3 trillion,"
Stauffer says. "About 60 percent, well over half, of those costs - about
$1.7 trillion - arose from the U.S. defense of Israel, where most of
that amount has been incurred since 1973."
- "Support for Israel comes to $1.8 trillion, including
special trade advantages, preferential contracts, or aid buried in other
accounts. In addition to the financial outlay, U.S. aid to Israel costs
some 275,000 American jobs each year." The trade-aid imbalance alone
with Israel of between $6-10 billion costs about 125,000 American jobs
every year, Stauffer says.
- The largest single element in the costs has been the
series of oil-supply crises that have accompanied the Israeli-Arab wars
and the construction of the Strategic Petroleum Reserve. â?To date these
have cost the U.S. $1.5 trillion (2002 dollars), excluding the
additional costs incurred since 2001,â? Stauffer wrote.
- The cost of supporting Israel increased drastically
after the 1973 Israeli-Arab war. U.S. support for Israel during that war
resulted in additional costs for the American taxpayer of between $750
billion and $1 trillion, Stauffer says.
- When Israel was losing the war, President Richard
Nixon stepped in to supply the Jewish state with U.S. weapons. Nixon's
intervention triggered the Arab oil embargo which Stauffer estimates
cost the U.S. as much as $600 billion in lost GDP and another $450 in
higher oil import costs.
- "The 1973 oil crisis, all in all, cost the U.S.
economy no less than $900 billion, and probably as much as $1,200
billion," he says.
- As a result of the oil embargo the United States
created the Strategic Petroleum Reserve (SPR) to "insulate Israel and
the U.S. against the wielding of a future Arab 'oil weapon'." The
billion-barrel SPR has cost U.S. taxpayers $134 billion to date.
According to an Oil Supply Guarantee, which former Secretary of State
Henry Kissinger provided Israel in 1975, Israel gets 'first call' on any
oil available to the U.S. if Israel's oil supply is stopped.
- Stauffer's $3 trillion figure is conservative as it
does not include the increased costs incurred during the year-long
buildup to the recent war against Iraq in which Israel played a
significant, albeit covert, role. The higher oil prices that occurred as
a result of the Anglo-American campaign against Iraq were absorbed by
the consumers. The increase in oil prices provided a huge bonus for the
leading oil companies such as British Petroleum and Shell, who are major
oil producers as well as retailers. The major international oil
companies recorded record profits for the first quarter of 2003.
- The Washington Report seeks to "provide the American
public with balanced and accurate information concerning U.S. relations
with Middle Eastern states." The monthly journal is known for keeping
close tabs on the amount of U.S. taxpayer money that goes to Israel and
how much pro-Israel money flows back to Members of Congress in the form
of campaign aid.
- The journal's website, www.wrmea.com, has an
up-to-date counter at the top that indicates how much official aid flows
to Israel. While the counter currently stands at $88.2 billion, it only
reflects the minimum, as it does not include the many hidden
- "The distinction is important, because the indirect or
consequential losses suffered by the U.S. as a result of its blind
support for Israel exceed by many times the substantial amount of direct
aid to Israel," Shirl McArthur wrote in the May 2003 issue of Washington
- McArthur's article, "A Conservative Tally of Total
Direct U.S. Aid to Israel: $97.5 Billion - and Counting" tallies the
hidden costs, such as interest lost due to the early disbursement of aid
to Israel and funds hidden in other accounts. For example, Israel
received $5.45 billion in Defense Department funding of Israeli weapons
projects through 2002, McArthur says.
- Loans made to Israel by the U.S. government, like the
recently awarded $9 billion, invariably wind up being paid by the
American taxpayer. A recent Congressional Research Service report
indicates that Israel has received $42 billion in waived loans.
"Therefore, it is reasonable to consider all government loans to Israel
the same as grants," McArthur says.
- Support for Israel has cost America dearly - well over
than $10,000 per American - however the Israeli-Palestinian conflict has
been extremely costly for the entire world. According to Stauffer, the
total bill for supporting Israel is two to four times higher than that
for the U.S. alone - costing the global community an estimated $6 to $12