by Howard Fienberg
December 13, 2002
Israel has cost the U.S. around
$1.6 trillion since 1973, or more than $5,700 per person (twice the cost of
the Vietnam war), according to economist and consultant Thomas Stauffer. Israel is
currently pursuing $4 billion in new aid and more than $8 billion in loan
guarantees. Stauffer's conclusions on the "hidden costs" of the U.S. relationship with Israel (detailed in the December 9 Christian
Science Monitor) could swing opinion against Israel in the corridors of power.
However, Stauffer's data only present half of the story, because Stauffer
has only done half of the necessary analysis. While inflating the costs of
American support for Israel,
he ignores or discounts the many benefits. Israel is scheduled for $2.04
billion in military assistance and $720 million in economic aid in fiscal
2003 and has average $3 billion overall a year for some time. Stauffer
contends that, adjusting the official aid to 2001 dollars, the U.S. has given Israel $240 billion since 1973.
The controversy lies in the "hidden costs" which Stauffer claims
to have discovered. For instance, he counts any loans or loan guarantees as a
cost. The U.S. has made
$10 billion in commercial loans, and $600 million in housing loans, to Israel.
economy is currently in poor shape, Stauffer has decided that the loans will
not be repaid. As the Monitor explains, Stauffer predicts "the U.S. would
end up paying both principal and interest, perhaps 10 years out." But
where does Stauffer get his information? Since Israel has never defaulted on any
loans, even a talented economist would need a crystal ball to confidently
predict a default ten years down the line.
As well, he includes "economic damage" to the U.S. Stauffer blames Israel for the Arab oil embargo, because America came to Israel's aid when Arab states
tried to destroy it in 1973. He claims the embargo caused a recession, which
cost the U.S. $420 billion of output as a result. However, it is not clear
that the oil embargo triggered the recession. There were many factors,
including a decline in American productivity. Further on the economy,
Stauffer tallies the cost to the U.S. of rising oil prices at $450
billion. Of course, it is not clear the Stauffer takes account of the benefit
of rising oil prices to domestic oil producers. Another result of the Arab
oil embargo was the creation of the U.S. Strategic Petroleum Reserve, which
Stauffer figures has "conservatively" cost $134 billion. But he
does not seem to understand what the money buys. The SPR does not discard oil, it saves it, like a bank, for emergency use.
Withdrawals have even been made recently to help with rising home heating oil
costs in the Northeastern U.S.
According to Stauffer, trade restrictions and economic sanctions reduce U.S. exports to the Middle
East by about $5 billion a year, costing approximately 70,000
American jobs. How exactly trade restrictions on the America-hating regimes
of Libya, Iraq, and Iran
fault remains unexplained. Mind you, the boost in oil prices, part of the
"cost" of Israeli support listed above,
presumably filled the coffers of Arab nations. Without that money, how could
they otherwise afford to buy all the toys and services Stauffer complains we
have not sold to them?
On the military side, Stauffer complains that the U.S. has
supported the development of Israeli military technologies, spending $2.5
billion on the Lavi fighter jet and the Arrow
missile. He conveniently ignores that these technologies, like many other
Israeli innovations in medicine and agriculture, are shared with the U.S.,
making them more of a benefit than a cost.
The most outrageous accounting twist concerns charity. Stauffer complains
that American Jewish charities and philanthropists have made grants or bought
bonds worth $50-60 billion, providing "a net drain" on the American
economy - despite those funds coming from hard-working private citizens who
chose to spend it that way.
Beyond all the dubious costs Stauffer manages to compile, there are the
many benefits of which he takes no account. He does not pause to consider
what dividends the U.S.
receives from Israel,
because they are not so easily reduced to numbers. American money supports a
ally in a hostile region. Israel
is the only country in the Middle East with
truly free elections, a free press, religious freedom, an independent
judiciary, equal rights for women, protection of
minorities and other individual rights. In the war on terror, Israel is on the front line against Islamist
terrorist groups who hate America
as much, if not more than, Israel
itself. And as the U.S.
considers invading Iraq,
perhaps we should be thankful that, thanks to Israel's pre-emptive action in
1981, Stauffer does not have to consider one more frightening cost--that of
an Iraqi nuclear bomb.
Thomas Stauffer laid out his
analysis in a lecture commissioned by the U.S.
College and delivered at a recent
conference at the University
of Maine. But who is
Stauffer? A favorite commentator for the Christian Science Monitor, he first
tackled the costs of supporting Israel in a March 20, 1990 op-ed
for the paper, where he estimated the cost at about $6.5 billion a year. He
is periodically cited in the media as an energy and water resources
consultant. Stauffer used to be an adjunct professor at Georgetown, a
visiting professor at the Diplomatic Academy of Vienna, and a research
associate at the Harvard Center of Middle East
See the original: http://www.tcsdaily.com/article.aspx?id=121302C
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