Since 1992, the U.S. has offered Israel an additional $2 billion annually in loan guarantees. Congressional researchers have disclosed that between 1974 and 1989, $16.4 billion in U.S. military loans were converted to grants and that this was the understanding from the beginning. Indeed, all past U.S. loans to Israel have eventually been forgiven by Congress, which has undoubtedly helped Israel's often-touted claim that they have never defaulted on a U.S. government loan. U.S. policy since 1984 has been that economic assistance to Israel must equal or exceed Israel's annual debt repayment to the United States. Unlike other countries, which receive aid in quarterly installments, aid to Israel since 1982 has been given in a lump sum at the beginning of the fiscal year, leaving the U.S. government to borrow from future revenues. Israel even lends some of this money back through U.S. treasury bills and collects the additional interest.
In addition, there is the more than $1.5 billion in private U.S. funds that go to Israel annually in the form of $1 billion in private tax-deductible donations and $500 million in Israeli bonds. The ability of Americans to make what amounts to tax-deductible contributions to a foreign government, made possible through a number of Jewish charities, does not exist with any other country. Nor do these figures include short- and long-term commercial loans from U.S. banks, which have been as high as $1 billion annually in recent years.
U.S. Financial Aid To Israel: Figures, Facts, and Impact
The United States has provided Israel with $233.7 billion in aid ā(after adjusting for inflationā) since the state was formed in 1948 through the end of last year, research by TheMarker has found.
In nominal terms, total American aid was $112 billion over the years, according to data that appears on the website of the U.S. Congress.
The impression created is that the partnership between the two countries results from pressure by the pro-Israeli lobby in Washington, which expressed itself particularly strongly in last yearās U.S. elections. But the U.S. government has a clear strategic interest in strong ties with Israel, which is the largest single recipient of American foreign aid, says Moshe Arens, a former foreign minister, defense minister and ambassador to Washington.
āIn the world we live in, a partnership of ideals and values takes precedence over common interests,ā he says. āAs a democratic country, the U.S. has good relations with other democratic countries, which have economic and military importance. In the past, during the Cold War period, Israel sided with the United States and today Israel is the best partner American has in the war on terror.ā
Israel received the most aid in the 1970s between the 1973 Yom Kippur War and the 1979 peace agreement with Egypt. For signing the accord with Egypt, Israel received its largest-ever amount of aid for a single ear ā some $15.7 billion in grants and loans after adjusting for inflation ā(it was $4.7 billion at the timeā), which was used to fund the transfer of army bases in the Sinai Peninsula back into Israel.
Other years that saw particularly high levels of American assistance to Israel were in 1974, when the United States helped Israel reestablish its military standing after the losses it suffered in the Yom Kippur War. That year, in inflation-adjusted terms, Israel received $12.4 billion ā($2.6 billion in nominal termsā). In 1976, Israel received $9.6 billion ā($2.3 billion in nominal termsā).
Value of aid declined
The figures do not include loan guarantees amounting to about $19 billion that Washington has granted Israel in recent years to make it easier for it to borrow overseas. It also doesnāt include the transfer of surplus military equipment to Israel.
The value of the aid has declined as well, both because it is less extensive than in the past and because the Israeli economy has grown. Since 2004, its value has been equal to less than 2% of Israelās gross domestic product and last year was about 1.2%. This year it is likely to fall slightly due to fiscal pressures in the United States.
The first U.S. aid to Israel arrived in 1949 and was used for such basic purposes as buying food and absorbing Jewish refugees. It began to expand a decade later with the first military aid. It grew gradually from a base of $100 million ā(in nominal termsā) in 1949, before taking off after the Yom Kippur War and the signing of the Camp David agreements.
Since then, U.S. aid has been about $3 billion annually, of which $1.8 billion is military assistance with the rest for civilian purposes. In 1998 Benjamin Netanyahu, in his first term as prime minister, led a drive to convert the civilian portion to military aid, totaling $2.5 billion to $3 billion a year.
Some 70% of the aid is designated for Israeli purchases of military equipment from American companies.
āItās a giftā
āItās a gift, but not entirely a gift, because part of it has to be spent in the U.S.,ā
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U.S. aid to Israel totals $233.7b over six decades - Business