David R. Henderson  

End Military Aid to Israel and Egypt and ...

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Corinne and Robert Sauer, founders of the Jerusalem Institute for Market Studies, have taken up a proposal put forth in 2003 by Erez Raphaeli, an independent researcher. He contended that ending the nearly $5 billion in annual U.S. military aid to Israel and Egypt, as well as to Jordan, Lebanon, and the Palestinians, would actually improve the military position of Israel, the U.S.'s strongest ally in the region, and limit an arms race that the Sauers, both free-market economists, argue is essentially spiraling out of control.

If the military aid, part of $7.1 billion in grants that the U.S. awards each year in the Middle East, were to be withdrawn, the Arab countries would have difficulty replacing it, and Israel thus could downsize its military, argues Robert Sauer, who is also an economics professor at Royal Holloway, a college of the University of London.


This is from Robin Goldwyn Blumenthal, "A Farewell to Arms: Path to Mideast Peace?" in Barron's, March 16.

The article goes on to note: "The $3.1 billion in annual U.S. military aid to Israel accounts for 18%-22% of that country's annual defense budget." This sounds large and it is large. But as I pointed out in my debate with Colonel Hunt on the John Stossel show, $3.1 billion is less than 1.5% of Israel's GDP.

HT to frequent reader Tom Nagle.


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CATEGORIES: Game Theory



COMMENTS (15 to date)
Mark writes:

And isn't the Suez Canal the sole purpose for providing aid to these two countries?

Pave Low John writes:

Talk about using shotgun approach to Middle East diplomacy. A couple of thoughts:

1) Israel is the only democratic republic in the entire region, and historically a close ally in the fight against militant jihad. Why would we want to mess with that?

2) Jordan is probably our second-best ally behind Israel. They actually let us launch most of our SOF forces into Iraq in 2003. King Abdulallah hates the jihadists more than we do, and he has sent Jordanian forces to Afghanistan to help our effort there. Again, why would we mess that up?

3) Lebanon is a basket-case, but their central government really wants to get rid of Hezbollah, which pretty much owns the southern part of that nation. If we pull out all our aid, that helps Hezbollah become even more entrenched in Lebanon. Do we really want to do that?

4) Egypt and the PA are straight-up thugs, crooks and dictators, I'd cut off all aid immediately to those two "states," if you can even call them that at this point. Waste of money, if not out-right working against our own best interests. So that part actually sounds like a good idea.


I used to be a rotary-wing advisor in the USAF and believe me, 7 billion may sound like a lot, but it isn't. That 7 billion gives us access and access helps us figure out what is really going on and gives us some leverage if things get really stupid. If we just cut off Israel and Jordan, for instance, why would they help us behind the scenes (which they do, a lot)?

If you want to save money, cancel the F-35 and the MV-22 and stick with F/A-18s and CH-53s for the next 25 years, that will free up over a trillion dollars in the long run and prevent us from offending the countries that are actually helping the U.S. (still talking about Israel and Jordan here; Lebanon is iffy, PA and Egypt are a waste of time and money).


I'm down with the idea of saving money, I've seen plenty of it wasted in Afghanistan and Qatar, but some of the foreign aid does make geopolitical sense, much as it sometimes pains me to admit...

Insight writes:

Each and every one of those dollars is attached to some (perhaps nonpublic) commitment made in the past that can't be broken without wide ranging reputational consequences. Just proposing to "end" it is a non-starter. It could, perhaps, be replaced as part of some suitable negotiation, but arguments against "foreign aid" seldom include concrete and workable proposals to that end.

Ken B writes:

@Pave Low John:
Not to endorse the propoasal, but under your point 1), I think the idea is that these cuts collectively would make Israel safer.

egd writes:

If the object is peace and an end to the arms race, does withdrawing money from both sides really solve the problem, or does it simply reduce the level of the conflict?

I suspect that withdrawing foreign military aid from both sides would not affect the defense spending of both sides relative to the other. The arms race would likely continue at a slower pace.

Withdrawing aid may make things worse by lessening America's influence over military spending.

I agree with a lot of what Pave Low John wrote. This 'a pax on all their houses' idea misses a lot. The money is trivial, but our access, and the intelligence we gain thereby, isn't. Not to mention the potential value of bases to us in a conflict somewhere in that area.

And the Arab countries have security concerns against each other, as Saudi Arabia found out in 1990. So, they won't stop arming themselves. They'll look elsewhere for friends.

David R. Henderson writes:

@Patrick R. Sullivan,
"A pax on all their houses."
Great Freudian slip. I think you mean "a pox on all their houses." But in fact, the Jewish Israelis who are proposing this seem to be saying it will lead to less pox and more pax.

Pave Low John writes:

Patrick Sullivan mentions an aspect that I had forgotten about until I read his post.


What makes anyone think that the Chinese or the Russians won't simply step in and take our place if we dump all our foreign aid commitments and walk away? The Chinese were perfectly willing to modify a bunch of Israeli AWACs aircraft a few years back, until we complained and got the deal canxed at the last minute (which made us look like idiots, by the way, the Israelis had told us about the deal for at least 5 or 6 years prior).

Nature hates a vacuum and international politics takes that observation to a whole new level. If we stop supporting some of these countries, someone else will step in to fill the gap, guaranteed. The weapons will always get bought. Always, always, always.

But good luck trying to explain how the world really works to pacifists. They would resurrect the Kellogg-Briand Pact tomorrow, if they could, and stand around puzzled while wondering why everyone else is laughing at them. Nice folks, don't get me wrong, but naive as the day is long....


Mark V Anderson writes:

I am far from convinced by Pave Low John's arguments. Israel is a democracy for Jews, not so much for Arabs. As far as Israel helping us out against militant jihadis, a lot of their anti-Americanism is due to our alliance with Israel in the first place. I suspect we'd come out ahead. Besides why do we need to bribe Israel to fight militant jihadis? That is in Israel's interests too.

I would be in favor of ending all military support in the Middle East, at least as fast as we could end those commitments that Insight refers to. If we have made commitments, we shouldn't break them, but we shouldn't make any more. As long as Israel builds more settlements on Arab land (the West Bank), they are preventing peace, and the U.S. should do all it can to disassociate itself with them.

Pave Low John writes:

Yeah, those Israelis, denying Arabs any kind of democracy or voice in the government of Israel. Damn them, why can't they be more like the Egyptians or the Saudis. Wait, what's this?

http://en.wikipedia.org/wiki/List_of_Arab_members_of_the_Knesset

Wow, 12 current members of the Knesset are Arabs, with 69 total members since 1948. Including women, how about that.

But, hey, maybe I'm jumping to the wrong conclusion here. I'm sure that all of those peace-loving Muslim-majority countries would be more than willing to allow what few Jews are left in their territories to serve in their parliamentary governments. Including Jewish women, of course.

Yep, any day now (*crickets, crickets, crickets*)

Peter H writes:

1.5% of GDP is a lot!

1.5% of US GDP would be roughly $750 for each living person in the US, and given that many of those people don't earn incomes, roughly $1500 per income-earning American. That's big enough to not be a rounding error in terms of the economy of Israel.

John Smith writes:

The aid given to Egypt is commonly considered to be an US incentive for Egypt to keep to its formal peace treaty with Israel.

Removing it would be reneging on an implicit commitment with resulting consequences that USA may or may not be comfortable with. Certainly something that thought should be given to before saying off with its head.

David Henderson Author Profile Page writes:

You did read the post, right? The part where I say 1.5% of Israel's GDP. That is NOT close to $750 for every living person in America. And I never argued that it's rounding error for Israel. I argued that 1.5% of Israeli GDP is not large.

Great Freudian slip.

It was a pun, not a slip. You can't force people to be peaceful.

Craig writes:

@John Smith

"The aid given to Egypt is commonly considered to be an US incentive for Egypt to keep to its formal peace treaty with Israel."

While that may be true, that doesn't make it right. That's negotiating with terrorists, which we "don't do". Are we OK with paying Egypt a ransom so they don't attack their Israeli hostage?

I'm not. That has set a dangerous precedent and is the reason we are in the situation we have.

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