IASPS - News Behind the News

November 1, 2001

Aid in Time Saves Israel's Financial Hide 

On October 24, 2001, the U.S. Senate approved the foreign aid bill, which had been previously approved by the House of Representatives in July.  Wrangling over the appointment of federal judges had held up the bill.

Israel will get the largest amount, $2.76 billion, of the $15.2 billion aid bill.  Egypt will be in second place with $1.96 billion.

Approval of the U.S. aid package for 2002 was of great importance because the money was included in Israel's state budget for 2001.  If the aid package was further delayed, Israel might have received the money after January 2002, which would have resulted in a huge deficit in its current budget.

Stated as simply as possible, Israel's state runs its financial affairs on the presumption that U.S. taxpayers will supply several billion dollars each year in a timely manner.  Without the aid, Israel could not afford to subsidize its many money-losing, state-owned enterprises, grant unwarranted pay increases to civil services, protect inefficient domestic industry, mismanage the nation's water supply, and so forth.

As a side note, U.S. aid sustains not only Israeli socialism, but also Egyptian socialism.  It's fair to ask, then, what U.S. taxpayers get in return for sustaining Egyptian socialism? Click here to read an IASPS paper on the subject.