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Leftists Speak Out
FUZZY MATH

Nov. 18, 2002
 
NOTE TO READER: This writer argues that it is US Aid and weapons are responsible for the conflict in the area, when it is the conflict in the area which has caused Israel to seek and obtain arms.  It is US interests in the area ( and the benefit of having a friendly ally in the region) which has triggered the aid. Israel
wants peace. They are more than willing to live side by side in peace with the Arabs.   If the Arabs would stop attacking Israel, there would be peace.

Read on from my imbedded comments.   --- Becky Johnson

from: CounterPunch

 November 16, 2002

 US Aid to Israel
 Feeding the Cuckoo
 by PAUL de ROOIJ

Since Sept. 11, Americans have thought of themselves as the target of terrorists, emanating mainly from the Middle East. It may thus surprise them to learn that their own actions are in large part responsible for their problems and resentment in the Middle East. In particular, we argue that the massive aid flows and armaments transfers to Israel are largely responsible for the problems between Israelis and Palestinians today.

BECKY:  If the Jewish people had only agreed to die or be banished long ago,
then there would be no need for this pesky military bloodbath.

The repercussions of this conflict reverberate everywhere in the region to
the great detriment of the rights of the people in the area, but remarkably, also to the detriment of the US's long-term interests.

BECKY:  Yes, I can see it clearly now.  The US must turn its back on its
most loyal ally.  It all makes sense to me now!

Americans by nature tend to look closely at their government's expenditures, to trim the fat wherever they can find it--welfare, social security, health care, education 85 all except when it comes to Israel. A valuable exercise for any American would be to examine the huge handouts given to Israel,...

BECKY: Up until 1992, the US made loans which Israel paid back.

... which may reveal shocking facts and motivate them to a take closer look
at what is done in their name. Here is a quick overview of US aid flows to
Israel.

There are open and upfront economic and military handouts, and the table below lists the official numbers. Economists say that in the presence of inflation, a dollar yesterday is worth more than a dollar today, and an adjustment must be made to obtain meaningful comparable figures over time. It is highly desirable to express the aid flows in constant 2001 dollars, so that these figures mean something to us today. Inexplicably, this simple and standard transformation is never done pertaining aid flows to Israel--an omission that understates the aid flows.

BECKY: Everyone understands that a million dollars of aid in 1964 was
worth than that same million today.  This is not exactly fraud.

 Now, adjusting the data and expressing it in 2001 constant dollars shows that the visible aid flows to Israel were $35.7bn over the past decade, and $143bn since 1967 [note 1]--the date after which US aid to Israel really took off. The latter stands in stark contrast with the unadjusted $83bn US aid since 1967 that is usually quoted. US aid to Israel: 1992 -- 2001, and expressed in constant 2001

USD USD Billion
 =
 Year
 Military
 Economic
 Total BN
 adjustment
 Total BN USD

 1992
 1.80 1.30 3.10 1.26 3.91
 1993
 1.80 1.30 3.10 1.23 3.80
 1994
 1.80 1.30 3.10 1.20 3.70
 1995
 1.80 1.30 3.10 1.16 3.61
 1996
 1.80 1.35 3.15 1.13 3.55
 1997
 1.80 1.33 3.13 1.10 3.46
 1998
 1.80 1.28 3.08 1.09 3.35
 1999
 1.86 1.15 3.01 1.06 3.20
 2000
 3.12 1.01 4.13 1.03 4.25
 2001
 1.98 0.90 2.88 1.00 2.88
 Total
 31.78  35.70
 Inflation adjustment derived from the CPI-U index

 Col(5) 3D Col(3) * Inflation Adjustment
 
BECKY: It is true that Israel gets the largest single amount of foreign military aid. But don't forget that Israel is the only Jewish country in the world.  There are 23 Arab/Muslim countries in the world, and their combined foreign aid far exceeds that of Isreal.

Now, one must put that into perspective. Take the Jewish population of Israel(5.24m)--the primary beneficiaries of the aid, and one obtains a $540 per capita benefit just for 2001--four times as much as the touted Tax Cut of 2001 to Americans!

BECKY: The US has a population of 280 million. Israel has a population of less than 7 million.  This is not a real comparison.  Besides, in the US, the vast majority of the tax cut will go to the rich. Very few families will actually get $500 in their pocket. Not so in Israel. The money goes to bolster her defense, and until that day when everyone is chanting Kum-ba-Ya, Al Aqsa Martyrs Brigade has disbanded, and the Islamic Jihad is defunct, Israel must stay armed and actively pursue the true perpetrators of violence, extortion, and a repressive society (remember the Taliban?) just to keep from being overrun.
Israel is our ally.  One of our staunchest.  More Jews are in America than any other country outside of Israel.  I think that it behooves us to support Israel in her hour of need, and to make sure she survives as a Jewish state and the homeland for Jews the world over.  A strong Israel keeps America strong. A strong America keepsIsrael strong. 

[Note 3] Now, if the hard-working American families ever find this out, what can one suppose they would think of it? NB: The calculable aid flows to Israel constitute about 40% of the US's foreign aid budget (depending on how loans are accounted).

BECKY: When is this writer going to mention that the reason the US gives $3
billion a year to Israel for military aid is because President Clinton brokered a peacetreaty between Egypt and Israel and the United States in which Israel gave back the Sinai peninsula which had tons of oil and which Israel had controlled since the '67 war.  By doing so, Israel gave up 93% of the land it took over during the '67 war --- in exchange for the agreement from the US to provide $3 billion in aid. Oh, and we give Egypt $2 billion too.  Does the writer expect the US to break our treaty? 

Up to now we have only dealt with the aid flows that are visible to all Americans--the government's audit agency, the GAO, will have no problem computing such numbers. But in addition, one must now account for the long list of hidden subsidies.

 The biggest unofficial additional subsidy comes in the form of US loans to Israel subsequently forgiven by an act of Congress. That is, every year Congressmen engage in an ingratiation-frenzy to show that they are "friends of Israel," and this often entails forgiving loans. It is difficult to determine the sums involved, but this practice explains why Israel is overjoyed to obtain loans--these will eventually be forgiven in any case.
As Stephen Zunes stated, " 85all 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." [note 2]

BECKY:  Since the writer is throwing around numbers, why doesn't he have an accounting of how many loans Israel has paid back? And while he is at it, why doesn't he give us the amounts in 2002 dollars so we will know just how much money they were worth?

 A few years ago (1982)  Israelis bombed Lebanon with American-made F16 fighters. What was remarkable about this is that the bombs used were "on loan from the  US." It is rather odd to lend anyone a bomb. There are deeply disturbing  implications that an American owned bomb is thrown on Lebanese people by a
 third party, but we'll avoid this discussion.

BECKY: There is no doubt about this one. Bombs kill people.  Regardless of
who owns them. Note that the writer has had to go back twenty years to find
a single incident to complain about.

 The explanation for this odd arrangement is that the Pentagon budget is being used to subsidize Israel. Thus, the Pentagon procures the bombs, and then they are shipped on loan to Israel. This amounts to a clear additional subsidy, especially if those bombs are never seen again. The extent of this underhand subsidy can't be calculated. There are also questions about the "pre-positioned" armaments to be used by the US military; Israelis can use these at any time.

BECKY: I don't see anything particularly underhanded here.  Israel has been
under constant attack by its Arab/Muslim neighbors. They need military aid to defend themselves with. The US loans/grants military aid to Israel, its ally.  Yes, it would be great if there was no war and no one nation and people was out to destroy another nation and people, but wake up Goldilocks, the house is full of bears.  The question for Zunes and Paul de Rooij is this.  Does Israel have a right to exist as a Jewish state or not.  If the answer is "yes" then we have to put our money where our mouth is.

The Pentagon budget often includes programs developed by Israeli defense contractors. Once again, this is a direct subsidy of Israeli industry. While one may ask whether the Pentagon obtains any benefit from, an even more pertinent question is whether US defense technology is compromised by this practice.

BECKY: I'm not sure what benefit we get from most of the stuff the Pentagon builds.  It does get a lot clearer when there is an enemy right there attacking you.  We were attacked on 9/11.  This does prove there are enemies to the US who have the desire and means to do us harm.  We do have the right to our own security.  To what extent do we go too far? In what areas are we far too vulnerable?  These are questions we need to be asking all the time.

 In fact, Israel receives all the latest military gadgets. Usually these weapons don't carry a price tag, and it is difficult to determine how much  was spent on the military transfers. It is easy for the US government to manipulate these figures to "under invoice" military transfers to Israel--again, hiding the true cost from the US taxpayer. Certainly, Israelis won't accept the $10,000 military toilet seat, but maybe willtake it for $0.50.

 Egypt, the second largest US foreign aid beneficiary,...
 
BECKY: Aha! The author does know about the treaty! Note he does not
tell the amount of funding Egypt gets or have any tricky arithmetic to make
that relatively small number into a bigger number.
 
 receives the disbursements on a quarterly basis, and hundreds of American bureaucrats oversee the use of the funds. In contrast, the disbursement of aid to
Israel is done in a lump sum once a year, and the funds disappear into the
general kitty with no American auditor in sight.

BECKY: That "general kitty" is the Israeli treasury which openly and publicly spends that money in ways anyone can audit.  Contrast that to funding going to
the Palestinian Authority where 1/3 winds up funding terrorist activities, one third
goes into the private villas, yachts, and sportscars for Arafat's elite, and maybe
one third trickles down to the poor, struggling Palestinian people. But for the Israelis, there is little need to audit; Israel turns right around and buys military equipment from the US.

The additional cost to American taxpayers of disbursing the aid once a year
equates to $250m per year.

BECKY:  I'm not keeping up with this new math.  My God this author has uncovered a real scandal!  Israel gets its aid in one lump sum and Egypt gets it in
quarterly payments! Shocking! Call Amnesty International and Human Rights Watch!

Every so often, an American president will state that aid to Israel will be made conditional on it not being spent in the Occupied Territories. However, once the aid is handed over to Israel, then there is absolutely no control  over it. Israelis can always disingenuously claim that the funds for the  settlements come from other accounts--American's gullibility is always taken for granted.

BECKY:  Well, at least we know its not going to fund suicide bombers, or snipers who shoot babies in their beds, or at people walking from a holy site home on the Sabbath, or to blow up teens in a discoteque, or mothers shopping in a grocery store, or people in a coffee shop, or a pizza parlor. Its not going to build a luxury palace for some bigwig in the Palestinian Authority. Its not going to pay for school textbooks which foment hate, its not going to payoff a  family of a suicide bomber.  In 1997, 40% of the funds for the PA were reported "missing."  Also, the use of the word "occupied territories" is incorrect.  It is far more accurate to say "disputed territories" as both the Israelis and the Palestinians have legitimate claims to the land in question.

 Countries in Northern Africa have on occasion requested USAID technicians for various projects. Sometimes the technician showing up for the project is an Israeli contractor, or the aid recipient is asked to contact the Israeli company directly. This is an odd practice, and no other nationals are used in a similar fashion. Once again, what is at play is an indirect subsidy to Israel using the foreign aid budget.

BECKY: Its also a sign that the Israelis have a lot of skilled people. The author makes no attempt to quantify whether this practise of hiring a contractor from Israel happens anymore or any less than hiring a contractor from Sudan, or Saudi Arabia.

Israel has on several occasions obtained "US loan guarantees" on huge loans that Israel placed in various markets. If Israel doesn't default on those loans, then the cost to the taxpayer will be zero. However, the general accounting practice is to allot for the possibility of default, and thus costing a portion of those loan guarantees. In the case of Israel, such a standard practice isn't implemented.

The implications of the loan guarantees are also enormous. In the early 1990s, Israel received guarantees on loans of $10bn, and it is currently lobbying for another batch of $10bn loans guaranteed by the US taxpayer.
If in the future the US decides to become more assertive and perhaps reduce
its economic aid to Israel, then Israel could default on its loans--a likely possibility.

BECKY: Israel's economy is in bad shape precisely because of the
Arab-induced violence which has killed tourism in Israel and also caused skyrocketing unemployment in the Palestinian Authority.  If the terrorists would stop attacking the Jews, then all would return to normal and everyone would benefit from the peace.

The US would be left with massive bills to cover the loan guarantees. The loan guarantees further tie in US policy to Israeli whims, and therefore they should be rejected.

BECKY: Does Israel deserve to exist as a Jewish state?  Will Israel be
destroyed by Islamic forces?  Do we dare allow this to happen?

For the same reasons one has to be wary of the loan guarantees one also has to be wary of the huge issuance of "Israel bonds" in American markets. Often such bonds enter the pension funds of ordinary Americans, and thus future of Israeli and US policy impinge on the welfare of ordinary Americans.
Scrutiny of the policy pertaining to the inclusion of such bonds in pension funds
is something ordinary Americans should be concerned about.

One often hears that Irving Moskowitz, the "bingo parlor" magnate, transfers funds from his California operations to pay for the development of illegal settlements.

BECKY: The settlements aren't illegal.

In the process, he obtains various US tax advantages because the funds putatively go to humanitarian projects. Why should such funds disappear in Israel without paying the requisite US taxes? At a time when the US gov't is clamping down on numerous humanitarian organizations operating in the region, ...

BECKY:  Because they were funding terrorism.  Duh!

...it would seem that projects in the illegally occupied territories should also be off limits. Once again, it isn't possible to verify the extent of this abuse.

BECKY: There is no "abuse'.  The settlements are not illegal.  Oslo did not forbid the settlements.  The land historically has been the home to Arab and Jew alike. Both belong. Both have a right to live there.  Besides, what is wrong with building homes and businesses?  That sounds like progress to me.

 Jordan recently obtained a preferential trade agreement with the US. However, the agreement is often conditional on products being produced in partnership with Israeli companies. This equates to a low value added assembly in Jordan, and Israeli companies reaping the bulk of the benefits.

Nowhere else has such a conditionality been applied to US aid or trade agreements. It costs the US because even more cheap products pour into the US with lower tariffs. Although the agreement is meant to aid Jordan, it also benefits Israel. The cost in terms of Jordanian resentment is always ignored.

BECKY: I don't know much about this practise. But it sounds like a way to encourage Jordan and Israel to build positive, profitable, and productive relationships in order to help achieve a long-lasting peace.  Wouldn't people who
are part of the peace movement support such a policy?

On several occasions, the disbursement of funds to Israel has been delayed.
 As soon as this happens, Israelis will clamor to receive the interest due for the days that the funds weren't in their possession, a preposterous situation. Assume that you promise someone a handout on a certain date, and if you delayed, would you pay interest on the handout?

Cuckoos make nice cooing sounds in the forests. They also deposit their eggs amidst the nests of the brown-hooded cowbirds. The cuckoo chick is about three times larger than the cowbird chicks, and will often drive them from the nest or starve them out. The mother cowbird will nearly exhaust herself attempting to feed the demands of the cuckoo in its nest--a parasite that it doesn't recognize as an alien in its midst, even when it is bigger than the mother cowbird herself! The parasite gains control not only of the nest, but also of the mother cowbird that frantically seeks to feed the parasite.

BECKY: This analogy is repulsive and bears little resemblance to the US/Israeli relationship.  Israel is not hurting the US.  Israel turns right around and buys from the US the weapons it needs to defend itself.  This does NOT hurt the US economy.  Israel is not deceiving the US.  Israel is not a parasite.

 Israel is America's cuckoo. Massive aid flows go in ever increasing quantities to the cuckoo, and the negative aspects of this are evident for all to see. It is increasingly dangerous for Americans to set foot in the Middle East, the hostility directed at them originates primarily from Israeli actions in the area.

BECKY:  FALSE!! FALSE!! It has been Arab-incited violence all along. It is the Arabs who can't stand for Israel to exist and to be the homeland for the Jews that is the origin and main driving force.  It is the virulent anti-semiticism which is the source of the conflict.  It is the racism by the Arabs which has culminated in killings and terror. Israel is not the source of the conflict (unless you are arguing that they should somehow leave the planet and not bother anyone anymore!)  With the holocaust as a recent backdrop, we should not be so naive to think there aren't forces out there still who want the demise of the Jewish people.  The Israelis know that the Arabs will kill them to a man if they ever get weak enough.  When will those who should be Israel's staunchest allies (because they believe in democracy, socialism, religious tolerance, freedom or speech and the right to dissent, no death penalty, etc.) wake up and smell the c-40?  Israel is fighting for her life and we leftists are sitting back taking potshots marking off style-points while the Islamic threat is growing ever so much more dangerous to all we hold dear?

 Few people forget that the bomb dropped on them was US-made (maybe even US-owned), dropped by a US-made F16, piloted by an Israeli pilot,...
 
BECKY: The author is confused here. It is the Americans who bomb from 3000 feet up.  It is the Americans who inflict the deaths of innocent civilians. The IDF prefers to capture and arrest terrorist suspects.  If that is not possible, then they use intelligence to locate the suspect and to execute them with as little innocent loss of life as possible.  Instead of bombing from the air, the Israelis prefer house-to-house conflict so as to minimize loss of innocent civilian life.  When Israeli pilots are used, they are in helicopters with cannons which can be directed at a precise target that has already been evacuated, again to minimize loss of life.
 
 and the whole thing made possible by US funds.

BECKY:  Back to the Cuckoo analogy.  Doesn't it fit Saudi Arabia better than Israel?  Saudi Arabia takes huge amounts of US funding and military support, but weren't 15 out of the 19 hijackers Saudis?  Didn't Osama Bin Laden come from Saudi Arabia?  Aren't the Saudis funding the Palestinian suicide bombers to the tune of $25,000 to the deceased martyr's family?  Does that make it more likely the bombings will continue or less likely?  Israel only bulldozes a house (with no one inside of it!) to try to deter mass murder!

 We all know that some Middle Eastern hostility has hit America's home soil.
 
BECKY: Yeah. So the author noticed that AMERICA WAS VISCIOUSLY ATTACKED WITH MASSIVE LOSS OF LIFE AND PROPERTY. What a real bright lightbulb!  Now he tries to explain to us why the Jewish people are to blame for the attack on the WTC and the Pentagon --- despite that the attack was planned and financed by an Islamic Jihadist, manned by Islamic Jihadists, and celebrated by Islamic Jihadists who danced in the street as Americans burned and died.  Why would we want to take the side of the Islamic Jihadists in any conflict? How would that be in the best interest of the American people?
 
The point of this article is to create doubt among the American people for their support of Israel. The only argument I see the author making is some bizarre cost/benefit analysis.  The author does not take the reader to the possible future of the State of Israel overrun, her people killed or banished.  Yet, that is the direction the author is trying to take us. To a possible future in which the US pulls out its funding.  But if Israel is destroyed, the result will be the triumph and strengthening of the Islamic Jihadists-- who have already vowed to destroy America.
 
 Why Americans should subject themselves to the whims and demands of the cuckoo remains as one of today's greatest mysteries. All the justifications proffered for the aid flows ring increasingly hollow, and raise significant questions on why this detrimental relationship continues. It is only when Americans start adding up all the handouts and adjusting them to inflation that perhaps they will realize that its relationship with Israel is truly harmful. Americans may also start costing the resentment and hatred that Israel has engendered to themselves.
 
BECKY: Again? The big lie: that Israel is to blame for all the attacks it is suffering. Yeah, and if the Britons hadn't been so pro-Polish, Adolf Hitler never would have attacked them!
 
 A simple step to change the situation is to determine who is boss, who really controls the US budget and its foreign policy. The nature of democracy in America--and elsewhere--depends on this. The peace of the region, and alas, peace in the  rest of the world, depend on it too.

 Paul de Rooij is an economist living in London. He can be reached at
 proox@hotmail.com

 All items referred to in this article can be found in various issues of
the Washington Report on Middle East Affairs. Summary:
 www.wrmea.com/html/us_aid_to_israel.htm

 Note 1: There are many issues arising when computing such numbers, and on
 valid grounds, several can be justified. The primary one will be how to account for loans--given that most of them are subsequently forgiven, it may be valid to equate them as actual transfers. A more accurate measure would entail obtaining figures on loans that actually have to be repaid--figures we don't have. However, the numbers quoted as US aid to Israel don't include the loans. The figure produced here from 1967 onwards equates the loans as economic aid--assuming most of those loans will never be repaid. NB: No adjustment was made for interest due on loans.

 Note 2: www.wrmea.com/html/us_aid_to_israel.htm

 Note 3: The Tax Cut of 2001 amounted to about $500 / family on average.
 Assuming a family of four on average, the Israeli above board handout of
 2001 was about four times this amount 85 and that happens every year!