- While it is commonly reported that Israel officially
receives some $3 billion every year in the form of economic 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 lurking
beneath the surface. A recently published economic analysis has concluded
that U.S. support for the state of Israel has cost American taxpayers nearly
$3 trillion ($3 million millions) in 2002 dollars.
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- "The Costs to American Taxpayers of the Israeli-Palestinian
Conflict: $3 Trillion" is a summary of economic research done by Thomas
R. Stauffer. Stauffer's summary of the research was published in the June
2003 issue of The Washington Report on Middle East Affairs.
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- Stauffer is a Washington, D.C.-based engineer and economist
who writes and teaches about the economics of energy and the Middle East.
Stauffer has taught at Harvard University and Georgetown University's School
of Foreign Service. Stauffer's findings were first presented at an October
2002 conference sponsored by the U.S. Army College and the University of
Maine.
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- Stauffer's analysis is "an estimate of the total
cost to the U.S. alone of instability and conflict in the region - which
emanates from the core Israeli-Palestinian conflict."
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- "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, where most
of that amount has been incurred since 1973."
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- "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." The trade-aid imbalance alone
with Israel of between $6-10 billion costs about 125,000 American jobs
every year, Stauffer says.
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- 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 (2002 dollars), excluding the additional
costs incurred since 2001," Stauffer wrote.
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- 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.
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- 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 U.S. as
much as $600 billion in lost GDP and another $450 in higher oil import
costs.
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- "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.
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- As a result of the oil embargo the United States created
the Strategic Petroleum Reserve (SPR) to "insulate Israel and the
U.S. against the wielding of a future Arab 'oil weapon.'" The billion-barrel
SPR has cost U.S. taxpayers $134 billion to date. 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.
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- Stauffer's $3 trillion figure is conservative as it does
not include the increased costs incurred during the year-long buildup to
the recent war against Iraq in which Israel played a significant, albeit
covert, role. The higher oil prices that occurred as a result of the Anglo-American
campaign against Iraq were absorbed by the consumers. The increase in oil
prices provided a huge bonus for the leading oil companies such as British
Petroleum and Shell, who are major oil producers as well as retailers.
The major international oil companies recorded record profits for the first
quarter of 2003.
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- The Washington Report seeks to "provide the American
public with balanced and accurate information concerning U.S. relations
with Middle Eastern states." The monthly journal is known for keeping
close tabs on the amount of U.S. taxpayer money that goes to Israel and
how much pro-Israel money flows back to Members of Congress in the form
of campaign aid.
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- The journal's website, <http://www.wrmea.com,/>www.wrmea.com,
has an up-to-date counter at the top that indicates how much official aid
flows to Israel. While the counter currently stands at $88.2 billion, it
only reflects the minimum, as it does not include the many hidden costs.
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- "The distinction is important, because the indirect
or consequential losses suffered by the U.S. as a result of its blind support
for Israel exceed by many times the substantial amount of direct aid to
Israel," Shirl McArthur wrote in the May 2003 issue of Washington
Report.
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- McArthur's article, "A Conservative Tally of Total
Direct U.S. Aid to Israel: $97.5 Billion - and Counting" tallies the
hidden costs, such as interest lost due to the early disbursement of aid
to Israel and funds hidden in other accounts. For example, Israel received
$5.45 billion in Defense Department funding of Israeli weapons projects
through 2002, McArthur says.
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- Loans made to Israel by the U.S. government, like the
recently awarded $9 billion, invariably wind up being paid by the American
taxpayer. A recent Congressional Research Service report indicates that
Israel has received $42 billion in waived loans. "Therefore, it is
reasonable to consider all government loans to Israel the same as grants,"
McArthur says.
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- Support for Israel has cost America dearly - well over
than $10,000 per American - however the Israeli-Palestinian conflict has
been extremely costly for the entire world. According to Stauffer, the
total bill for supporting Israel is two to four times higher than that
for the U.S. alone - costing the global community an estimated $6 to $12
trillion.
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