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He explored the strategic reasoning behind the aid, asserting that it parallels the "needs of American arms exporters" and the role "Israel could play in advancing U.S. strategic interests in the region."

Approximately a third of the entire U.S. foreign aid budget goes to Israel, "even though Israel comprises just...one-thousandth of the world's total population, and already has one of the world's higher per capita incomes."

The economy would have collapsed in 1973 due to the balance of payments problem following the Yom Kippur War. Today it is still important to shoulder the economy from external shocks such as the Persian Gulf War and the massive flow of Russian immigrants to Israel in the past few years. If the aid were reduced or eliminated, a sharp reduction in government spending would be required. Sussman adds: "The $1.5 billion in emergency aid allocated to Israel in the mid-1980s was responsible for helping to stabilize the Israeli economy and stifle hyperinflation."6

In fact, American defense and aerospace firms reap substantial benefits from U.S. aid to Israel, for it guarantees them a $1.35 billion captive market each year. Out of $1.8 billion in grants, then, Israel receives about $450 million in cash that can be converted into Israeli currency and used either to purchase Israeli-made military products or develop weapons (such as the Arrow anti-missile system). Steven L. Spiegel, a professor at the University of California in Los Angeles, points out that Israel performs invaluable services by testing and developing weapon systems for the United States, improving American-made equipment, and providing crucial intelligence information.11 Moreover, Spiegel argues that Israel's use of American-made arms not only saves the United States money but earns it more: For example, after Israel's much advertised successes with U.S. weaponry in the 1969-70 War of Attrition and the 1982 war in Lebanon, U.S. arms sales worldwide in 1972-82 nearly tripled, from about $6.8 to $19.6 billion in constant 1982 dollars.12 And while of course it does not wish for wars to occur, the United States gains valuable information by seeing its arms perform against those of Israel's enemies, lessons that "cannot be purchased, developed, or simulated."13

Kurz: The United States and Israel—at Israel's initiative—have already developed a plan to gradually eliminate U.S. economic aid to Israel. There is an understanding that Israel's economy is doing better, its debt repayments (the justification for economic aid in the first place) are going down. If Israel had had its debt forgiven, as Egypt did, after the Gulf war, it wouldn't need economic aid at all. But that couldn't happen because of technical budgetary reasons; so instead of forgiving the debt, the United States is essentially giving Israel the money it needs to pay back its American loans. That will end in seven years. On the military side, it's anybody's guess. If the conflict ends tomorrow, if there is a real peace treaty with Syria, if Iran becomes a moderate force in the region, if Iraq no longer is a threat to Israel, if Israel is finally accepted as a permanent, legitimate state in the Middle East, then Israel will not need to spend huge sums of money for her defense and will no longer need U.S. help in doing so.

We give aid to Israel to maintain its security in a very tough region and a very important part of the world in order to advance critical U.S. interests. If that aid were reduced to a point that Israel couldn't buy the equipment it needs to defend itself and maintain the peace, that would be dangerous to us.

I do, but just as Israel's economy is doing much better, the military threats against her are much greater. Look at what's happening in the region: the nuclear threat, the missile threat, where they are coming from, the distances involved from rogue regimes like Iran and Iraq.

nd the Israeli government. Currently, in Washington, D.C., President Bush is promising aid to the Palestinians, ai

aid that they desperately need, in order for them to be able to establish good, peacekeeping forces that can rein in terrorists and serve as a police force in the region that Israel is trying to move out of.

Israel needs America’s help now more than ever.