The Cost of Israeli Friendship

From Michael Hoffman’s and Moshe Lieberman’s book The Israeli Holocaust Against the Palestinians

How expensive is the US’s relationship with Israel for the US taxpayer? Speaking at the Center for Policy Analysis on Palestine (CPAP) briefing, Thomas Stauffer analyzed the overwhelming costs and organized them into six distinct categories. An exact total is very difficult to calculate given most the cost are considered consequential, or indirect; however, the explicit cost alone is approximately $5.5 billion per year. This cost is foreign aid sent directly to Egypt, Jordan and Israel and known as the “simplest and smallest” cost.

Additional costs are indirect costs, a result of our association with Israel. Stauffer argues that billions of dollars in aid sent to Turkey annually as well as billions sent to central Asian countries are directly connected to our support of Israel. The aid received by Turkey is a reward for it’s diplomatic relations which Israel. In central Asia, the aid is distributed under the guise of promoting democracy but is certainly an attempt contain Iran’s regional influence. Stauffer also notes that private contributions from US citizens to Israel (totaling between $1 and $1.5 billion) are tax deductible and therefore must be included in the costs of supporting Israel. Also subsidized is 60-100 million in funds for relocation of Jews from Russia to Israel.

US banking has been another large source of funds for the Israeli government. This includes a bailout of the Israeli banking system at a cost between 10-12 billion in the 1980’s. (Actually a relatively low figure when compared to the current bailout costs)  Additionally, the Israel has initialized $7 billion of a maximum $10 billion in loan guarantees, which Stauffer refers to as “contingent liability.”

However, trade discrepancies are responsible for the largest lost of revenue in the US’s relationship with Israel. In terms of military expenditures, Israel enjoys a discount on all “surplus” military equipment. In fact, for every dollar of military equipment given to Israeli, the United States buys back another 60 cents. Not to mention the US has agreed to provide oil to Israel in the event of an embargo. As Stauffer points out, this responsibility may potentially cost up to 30 billion dollars for the US.

Trade (rather lack of trade) with countries hostile to Israel as well as non-military trade with Israel must also be factored into the losses of the US. Stauffer’s data reveals that the United States experiences a trade deficit with Israel amounting to $5 to $5.5 billion. Trade imbalance, a result of our special relationship is the main reason behind the losses.

Israel does not pay “real money” for its imports from the United States. This results in an annual trade imbalance of just under $10 billion, easily translating into about a quarter of a million American jobs lost.

Stauffer argues U.S. sanctions on Libya, Syria, Iran all of which have links to Israeli politics costs the U.S. economy about $14 billion annually in potential trade and translate into 500,000 to 600,000 in lost jobs. The inability to make major trade contracts with Arab and Muslim countries, the 1980s aircraft sales contract with Saudi Arabia for example, cost the U.S. economy between $20-25 billion annually.

If the relationship between Israel and the United States is so costly, why does it exist? Stauffer blames the “public’s naiveté.” towards the U.S. government but surely someone must benefit from the relationship. Stauffer describes how Congress and presidential candidates make out “handsomely” from Zionist contributors. In total, about 20-40% of campaign contributions (equaling tens of billions of dollars) are donated by the Jewish community in the United States and directly benefit U.S. leaders.  Stauffer claims other benefits are “hard to find.”

Imran Malik
Minaret of Freedom Institute


Minaret of Freedom Institute Program Assistant






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