Maybe you should read the actual agreements that place ”strings” on the money supposedly ”provided”.

First of all, the money never leaves US banks, so as long as there is an unused balance, US banks make money from it.

Second, at least 75% of the money must be used on US-made products, even if there is an alternative product offered by another seller nation at a better price.

Third, the remaining 25% of the money can not be used for non-US-made purchases without the express approval of the US government.

In this way, the US can exert control over the types and quantities of weapons the IDF acquires. By the way, I don’t see you objecting to the same kind of aid, at almost the same amount, that the US provides to Egypt (and to a number of other countries).

If the aid to Israel is so bad, in your opinion, for the US economy, isn’t the aid to Egypt and the others just as bad, from the same point of view?

Unless you include the fact that not only Israel ”benefits” from this kind of aid, your Israel-bashing becomes quite transparent.

Also, as a former employee of the Israel Military Industries (QC inspector when I was a student), I’ve seen the state of the crap that was provided and the work needed to make it serviceable. If you had seen it, you’d realize that the US conditions are no favor to anyone.

Why don’t you try actually checking the facts before you make a statement?

Ah, but there IS a ”net gain” for the US.

First, US banks hold the credit. Until the credit is disbursed to suppliers, the US banks use that money in the International Money Market and make profits from it, providing both jobs for bank employees AND taxable profit.

Second, orders for ”new” equipment, notably aircraft, are manufactured without any electronics, avionics or communications systems, and provide work for US workers, giving the US government taxable salaries and taxable profits from the manufacturers.

So we have US banks, workers and manufacturers making salaries or profits, both of which are taxable, in addition to providing jobs, meaning the welfare/social security system doesn’t pay out money to those people who have jobs.

It seems to me that the US does pretty well out of these ”Aid Deals” when you consider all the implications.

Michael... I am a fan of your articles but now you are pushing the envelop...

Israel spend over 3 billion dollars a year (of the 6 billions provided annually)-making Israel an welfare state larger than Palestine with 2.6 billion - to buy American made weapons are you claiming it is not supporting jobs in the United States?

In 2006, total arms transfer agreements were worth nearly $34.8 billion to Israel alone (16 years period). There are two primary channels through which U.S. arms manufacturers sell weaponry to Israel: Foreign Military Sales (FMS)and Direct Commercial Sales (DCS).

Foreign Military Sales: These are sales of U.S. weapons, spare parts, construction, and related services purchased by Israel via the U.S. Department of State . [Data covers actual deliveries of military equipment or services.]

FY 2001 total: $12.2 billion (deliveries)
$13.1 billion (new contracts)
FY2000 total: $10.5 billion
$11.4 billion (new contracts)[7]

Direct Commercial Sales: These transfers are negotiated directly between the U.S. manufacturing company and Israel, approved by the Department of State through the issuance of an export license.

FY2001 totals: $36.3 billion in licenses issued $821.1 million in estimated deliveries

FY2000 totals: $55.3 billion in licenses issued $477.6 million in estimated deliveries for last 24 years period.

Every year, the U.S. Congressional Research Service releases a report looking at arms transfers to the developing world.

These reports are also known as the Grimmett Report, after the author, Richard F. Grimmett. They provide insight into where the arms are going. The following breakdowns are based on this report.

The latest report covers data from the period 2000–2007 and is titled Conventional Arms Transfers to Developing Nations, 2000-2007.

What Is Sold to Israel?

Tanks and Self-propelled Guns:
This category includes light, medium, and heavy tanks; self-propelled artillery; self-propelled assault guns.

Artillery:
This category includes field and air defense artillery, mortars, rocket launchers and recoilless rifles — 100 mm and over; FROG launchers — 100mm and over.

Armored Personnel Carriers (APCs) and Armored Cars:
This category includes personnel carriers, armored and amphibious; armored infantry fighting vehicles; armored reconnaissance and command vehicles.

Major Surface Combatants:
This category includes aircraft carriers, cruisers, destroyers, frigates.

Minor Surface Combatants:
This category includes minesweepers, subchasers, motor torpedo boats, patrol craft, motor gunboats.

Submarines:
This category includes all submarines, including midget submarines.
Guided Missile Patrol Boats:
This category includes all boats in this class.

Supersonic Combat Aircraft:
This category includes all fighter and bomber aircraft designed to function operationally at speeds above Mach 1.

Subsonic Combat Aircraft:
This category includes all fighter and bomber aircraft designed to function operationally at speeds below Mach 1.

Other Aircraft:
This category includes all other fixed-wing aircraft, including trainers, transports, reconnaissance aircraft, and communications/utility aircraft.

Helicopters:
This category includes all helicopters, including combat and transport.

Surface-to-air Missiles:
This category includes all ground-based air defense missiles.

Surface-to-surface Missiles:
This category includes all surface-surface missiles without regard to range, such as Scuds and CSS-2s. It excludes all anti-tank missiles. It also excludes all anti-ship missiles, which are counted in a separate listing.

Anti-ship Missiles:
This category includes all missiles in this class such as the Harpoon, Silkworm, Styx and Exocet.

... and to conclude, none... none of the above promote job stability and profit to small American towns where the only source of income is to join the Army, national guard or work to a weaponry...

Yeah... right...

Robbie, I think you’re either reading this backwards or you got Michael and Marco mixed up.

I’m the one claiming that the US is making financial profits out of the ”aid” deals. Marco is the nay-sayer.

Whether they provide jobs in a particular location is not even mentioned, and your conclusion may be right for that particular issue.

What I do know is that somebody in the US is making money with these ”aid deals” — and not just on the one to Israel.

Think of it:

Subcontractors order raw materials, which have to be transported to their factories (jobs for the raw materials manufacturers and transporters, taxable income for the US government).

Finished parts and sub-assemblies need to be transferred from subcontractors to assembly plans - Subcontractors and transporters income (Taxable).

The primary manufacturer assembles, tests and transports finished or semi-finished products to the end user on US carriers (Taxable income from the primary manufacturer and the transporter).

The basic credit given by the US is used by banks to generate profits in the international money market until the client gives a payment order to a US supplier (Bank Profit - taxable).

The manufacturers, subcontractors, raw materials suppliers, etc. show taxable profit on their financial statements, on which the US government levies taxes.

Now whether this solves the employment problems of a particular town, city or area or not wasn’t the question in the first place. It is a fact that US workers keep their jobs by means of orders their employers might not have had otherwise (creating taxable salaries and keeping the same people off the unemployment rolls) and the factories keep generating taxable corporate income. Transport systems (rail, trucking, shipping and air transport) also benefit in the same way, also providing taxable salaries and corporate profits.

Since Israel’s 2009 budget is approximately $92 billion (according to Reuters), the figure of $3 billion in aid is not a ”make-or-break” item on Israel’s budget, bit they may be ”make-or-break” to some US manufacturers.

BTW, your figures are skewed, since the order and delivery of weapons systems rarely fall within the same calendar year and are often delivered several years after ordering.

It’s a complex calculation and the lag time between order and delivery misrepresents the real picture considerably. Just consider the amount of time it takes aeronautical engineers to make the customer-required alterations in their bacis engineering drawings– usually a matter of several months– then tooling, manufacture, testing, client acceptance and delivery... it all takes time.

If you really want to get a ”picture” of the reality, you have to take a starting point, compare delivered items against ordered ones over a long period of time (10 years or more), while deducting orders not yet delivered by the end of the period you decide on, then divide it by the number of years in the period you chose for a more or less ”real” annual figure.

I still think there’s not much to argue about the question of whether this ”aid”, which comes with all kinds of strings attached, provides jobs to US workers. Certainly it does.

I would suggest that you take all the implications I mentioned into consideration before making such a sweeping statement.

Instead of recommending ”economics in one lesson”, try researching the subject of ”economic feasibility”.

If you can prove that ”jobs are diverted” I’ll listen, but I have the feeling you can’t prove it.

The concept that ”taxes destroy jobs” is pretty Orwellian, pehaps even Kafakesque, since you’d find it hard to locate a country that charges no taxes at all (except for Dubai– most countries don’t have the luxury of their oil income).

While the US may not have a net financial gain, its loss from these ”aid packages” is far less than the face value of such ”aid”. Sometimes, in economics, you keep a financially losing business going to avoid greater loss.

Yes, I get it but securing the hegemony of Middle East region is the greatest financial gain that US could make. Israel is the watch dog for this matters.