TRUE COST TO U.S. TAXPAYERS Generous as it is, what Israelis actually got in U.S. aid is considerably less than what it has cost U.S. taxpayers to provide it. The principal difference is that so long as the U.S. runs an annual budget deficit, every dollar of aid the U.S. gives Israel has to be raised through U.S. government borrowing. In an article in the Washington Report on Middle East Affairs, for December 1991/January 1992, Frank Collins estimated the costs of this interest, based upon prevailing interest rates for every year since 1949. I have updated this by applying a very conservative 5 percent interest rate for subsequent years, and confined the amount upon which the interest is calculated to grants, not loans or loan guarantees. On this basis the $84.8 billion in grants, loans and commodities Israel has received from the U.S. since 1949 cost the U.S. an additional $49,936,880,000 in interest. There are many other costs of Israel to U.S. taxpayers, such as most or all of the $45.6 billion in U.S. foreign aid to Egypt since Egypt made peace with Israel in 1979 (compared to $4.2 billion in U.S. aid to Egypt for the preceding 26 years). U.S. foreign aid to Egypt, which is pegged at two-thirds of U.S. foreign aid to Israel, averages $2.2 billion per year. There also have been immense political and military costs to the U.S. for its consistent support of Israel during Israel’s half-century of disputes with the Palestinians and all of its Arab neighbors. In addition, there have been the approximately $10 billion in U.S. loan guarantees and perhaps $20 billion in tax-exempt contributions made to Israel by American Jews in the nearly half-century since Israel was created. Even excluding all of these extra costs, America’s $84.8 billion in aid to Israel from fiscal years 1949 through 1998, and the interest the U.S. paid to borrow this money, has cost U.S. taxpayers $134.8 billion, not adjusted for inflation. Or, put another way, the nearly $14,630 every one of 5.8 million Israelis received from the U.S. government by Oct. 31, 1997 has cost American taxpayers $23,240 per Israeli. It would be interesting to know how many of those American taxpayers believe they and their families have received as much from the U.S. Treasury as has everyone who has chosen to become a citizen of Israel. But it’s a question that will never occur to the American public because, so long as America’s mainstream media, Congress and president maintain their pact of silence, few Americans will ever know the true cost of Israel to U.S. taxpayers. Since 1992, the U.S. has offered Israel an additional $2 billion annually in loan guarantees. Congressional researchers have disclosed that between 1974 and 1989, $16.4 billion in U.S. military loans were converted to grants and that this was the understanding from the beginning. Indeed, all past U.S. loans to Israel have eventually been forgiven by Congress, which has undoubtedly helped Israel’s often-touted claim that they have never defaulted on a U.S. government loan. In addition, there is the more than $1.5 billion in private U.S. funds that go to Israel annually in the form of $1 billion in private tax-deductible donations and $500 million in Israeli bonds. LOANS, THE “CRANSTON AMENDMENT,” AND LOAN GUARANTEES Currently, Israel owes the U.S. government almost $3 billion in economic and military loans. Direct government-to-government loans are included in the above numbers for total aid, because repayment of several loans has been “waived” by the U.S. Israeli officials are fond of saying that Israel has never defaulted on a loan from the U.S. Technically, this is true. The CRS report, however, notes that from FY 1994 through FY 1998 $29 billion in U.S. loans have been waived for Israel. Therefore, it is reasonable to consider all loans to Israel the same as grants. There seems to be much confusion about the so-called “Cranston Amendment,” named after the California senator who sponsored it in 1984. The amendment said, simply, that it is “the policy and intention” of the U.S. to give Israel economic aid “not less than” the amount Israel owes the U.S. in annual debt interest and principal payments. Since official economic aid to Israel has always been considerably higher than the annual debt repayments, this is something of a non-issue. Furthermore, since the amendment is simply a statement of policy and intent, it may not be legally binding. In any event, although the amendment was included in every aid appropriations bill through FY 1998, it has not been repeated in the FY 1999, 2000, and 2001 appropriations bills. The amount of U.S. government loan guarantees to Israel was not included in the above numbers, because they have not cost the U.S. any money (yet), although they are listed as “contingent liabilities” (that is, they would become liabilities to the U.S. should Israel default). Nevertheless, they unquestionably have been of tangible financial benefit to Israel. The major loan guarantees issued by Washington have been $600 million for housing between 1972 and 1990; the much publicized $10 billion for Soviet Jewish resettlement between 1992 and 1997; and some $5 billion for refinancing military loans commercially. Currently, the total U.S. contingent liability for Israeli loans is about $10 billion. THE NEEMAN AGREEMENT After Israeli Prime Minister Binyamin Netanyahu told Congress in 1996 that he wanted to reduce the level of U.S. economic aid to Israel, Israeli Finance Minister Yaacov Neeman met with members of Congress in January 1998 to negotiate the details. After much backing and forthing, they reached agreement that Israel’s then-$1.2 billion in economic aid would be decreased annually, beginning FY 1999, by $120 million, and the $1.8 billion in military aid would be increased by half that, or $60 million. As a little-reported part of the deal, the amount of military aid that Israel was allowed to spend in Israel would be increased by $15 million per year. From FY 1988 through 1990 Israel was allowed to use $400 million of its $1.8 billion U.S. military aid in Israel. Beginning in FY 1991 that was increased to $475 million. As a result of the Neeman agreement, beginning in FY 1999 the aid appropriations bill gave the amount to be spent in Israel as a percentage of the total, rather than a stated amount. This maneuver helped hide from U.S. defense contractors the fact that the U.S. direct subsidy to their Israeli competitors was being increased by $15 million per year. For FY 2001 the stated percentage works out to $520 million. None of this is included in the above figures, because it does not represent a direct cost to the U.S. taxpayers. It is clearly an indirect cost, however, in terms of lost tax revenue and lost business for American companies. X This post got truthcdm censored on facebook truthcdm/facebook-caught-censoring-alternative-media-targets-alternative-media-as-spam/
Posted on: Thu, 31 Jul 2014 00:57:55 +0000
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