From the November 2006 Idaho Observer:
What would Israel be without U.S.?
by Ray Dively
While it is commonly reported that Israel receives at least $9 billion every year in the form of 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 that lurk beneath the surface.
United States support for Israel has cost American taxpayers dearly—$3 trillion according-to a published expert analysis. "The Cost to American Taxpayers of the Israel-Palestinian Conflict: $3 Trillion" is a summary of research by Washington-based engineer and economist Thomas R. Stauffer, who writes and teaches about economics of energy and the Middle East.
Stauffer’s analysis is the total cost of instability and conflict in the region to the U.S. alone—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.
"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," Stauffer observed.
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. "To date, these have cost the U.S. $1.5 trillion, excluding the additional costs incurred since 2001," 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 United States as much as $600 billion in lost domestic production 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.
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 cost incurred during the yearlong buildup to the recent war against Iraq in which Israel plays a significant, albeit covert, role.
Loans made to Israel by the U.S. government are being paid by the American taxpayer. In fact, all "loans" to Israel wind up as "grants" which are forgiven at the end of each year. A 2003 Congressional Research Service report states that Israel has received $42 billion in waived loans. No doubt that amount now exceeds $100 billion—all forgiven.
The above cost does not include the present Israel’s Third War of Aggression against Lebanon, a sovereign nation, fought primarily with U.S.-financed weapons. The Jerusalem Post reported Aug. 30, 2006, that the U.S. has offered to cover the costs of Israel’s debts for the aggressive war it initiated against Lebanon—if Israel asked. Israel commented that it was considering taking the Bush administration up on the offer, but was going to widen the request to include the costs of reparations and humanitarian aid.