Ambassador (ret.) Yoram Ettinger | “Second Thought: a US-Israel Initiative” | July 26, 2026
Photo by Alexander Mils on Unsplash
*The annual US $3.8bn “foreign aid” to Israel – which is earmarked to purchase only US-made military systems – has been framed under a misleading banner: “foreign aid.” To most Americans, “foreign aid” evokes images of charity, one-way transfers, funded by hard-working Americans, serving needs in foreign lands, rather than satisfying dire US domestic needs. That framing is not just imprecise; it is a most consequential misnomer in the US budget.
*Setting the record straight on “foreign aid” to Israel, in particular, and US-Israel relations, in general, behooves one to discard that misnomer. A thorough due-diligence through a clear-eyed balance sheet, documents that the annual $3.8 billion is neither “foreign aid”, nor a handout. It is the smartest of US investments.
For example:
1. A professional auditing reveals that the $3.8bn is an annual high-yield investment, which provides the US with an unprecedent Return-on-Investment (R-o-I). Moreover, it serves as an irreplaceable force-multiplier for the US homeland and national security, and a booming dollar-multiplier for the US economy, bolstering US global dominance, economically, militarily and technologically.
2. Israel functions as the largest, real-world, most experienced and most intense battle-tested laboratory for the US defense and aerospace industries, which employ 2.5 million people. Hence, each of the dozens of advanced US military systems, supplied to Israel, benefits from Israel’s unique existential challenges, which stress-test advanced US military systems. This Israeli battle-tested laboratory yields daily lessons and improvements – operations, maintenance, repairs, mechanical and technological – which are promptly shared with the US manufacturers. These lessons are integrated, by the US manufacturers, as modifications and upgrades in the next generation of the US military products. This process saves the US many years of research and development (10-20 years in the case of the F-35, F-16 and F-15 each), which amounts to mega-billion dollars (e.g. the total research and development cost of the F-35 was $55bn).
3. The Israel-driven upgrades enhance the US competitiveness in the global competition, which generates billions of dollars in US export. Furthermore, Israel constitutes a global “Showroom” and a “Triple-A-Store” for the US defense and aerospace industries, demonstrating the superiority of the advanced US military systems. For instance, when US-made combat aircraft and other defense systems perform flawlessly, in combat, in Israeli hands, global and US demand surges, bolstering the US’ overall production and export, expanding domestic manufacturing employment (e.g., the F-35 related employment has expanded by 35% since 2018, when Israel received the aircraft for operational use), and increasing corporate and individual tax revenues for the US Treasury.
4. Over 250 US commercial high-tech giants – including Intel, Microsoft, Google, John Deere, Nvidia, Facebook, Johnson & Johnson, Dell, Intuit, General Electric and General Motors – operate research and development centers in Israel. These US giants leverage Israel’s can-do, defiance of odds and innovative spirit and brainpower, which bolsters the US technological dominance in the global market.
5. Israel’s intelligence has systematically shared with the US vital data on enemies’ and rivals’ weapon systems, proliferation networks, and operational and pre-emptive counter-terrorism that would otherwise require the output of several CIAs. The annual budget of one CIA is around $15bn (a multiple of 400% R-o-I on the $3.8bn).
6. Israel’s strategic effectiveness has deterred and weakened anti-US rogue entities, tilting the global balance of power in favor of the US. It has been demonstrated – since the Cold War era – by clipping the wings of the anti-US Sunni and Shiite terrorism, constraining the strategic maneuverability of China and Russia/USSR, while identifying the vulnerabilities of their air defenses and combat aircraft, and by enhancing the stability of all pro-US Arab regimes. Israel’s strategic effectiveness has resembled the largest US aircraft carrier, combat-ready, with no US boots on board, deployed in a critical area between the Mediterranean, Red Sea, Indian Ocean and the Persian Gulf. It spares the US the need to manufacture a few more real aircraft carriers, and deploy them to the Indian Ocean and Mediterranean, accompanied by 5-7 ground divisions. Constructing and deploying one advanced aircraft carrier costs $13bn, in addition to the $1bn required for every ground division deployed to the Middle East (a multiple of over 300%).
7. Israel constitutes an innovation center for the US Armed Forces, sharing with the US military counterparts its unique battle experience. This process has upgraded the battle tactics of the US air force, air defenses, special operations, counter-terrorism, urban warfare, naval operations, cyber warfare, combat medical care, etc.
8. While European allies frequently pivot their foreign policy stances and defense cooperation, depending on whether left-leaning or right-leaning coalitions take power, Israel’s commitment to the US is a rare common-denominator in the otherwise highly polarized Israeli society. Whether governed by the Israeli Left or Right, Jerusalem’s alignment with Washington remains rock-solid. Israel offers something increasingly rare among allies of the US: unwavering Israeli bipartisan reliability.
9. The US maintains its military bases in Western Europe at an annual cost of $35bn annually, including 80,000 American troops. At the same time,the annual US investment in Israel is $3.8bn with no large stand-alone US military bases, yielding to the US an annual Return-on-Investment of well over 1,000%.
10. The $3.8bn appropriated to Israel annually is not an expense, but a rare, low/no-risk, outsized-yielding investment. It is a windfall to the US taxpayer, and a most productive line-item in the US budget, underscoring the mutually-beneficial two-way-street US-Israel cooperation.
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