Sunday, January 30, 2011

Israel: The Third Rail and the Math

Rand Paul may be the first Senator in decades to take a serious look at government spending and propose serious spending reductions. He has already come out with a detailed proposal to cut government spending by 30%.

He wisely calls for the ending of all foreign aid, as part of his reductions. Thomas Eddlem calls this touching the third rail. How so? Rand is being attacked for including Israel as a foreign country.

Eddlem reports:
Various Israeli-lobby outlets have condemned his proposal. New York City's The Jewish Week called it a "toxic mix." The Republican Jewish Coalition rejected the proposal as "misguided." The Washington Post's Jennifer Rubin labeled Dr. Rand Paul's remarks "neo-isolationism" and said they would be "widely condemned."
Here's CNN's Wolf Blitzer giving Senator Paul the once over:
BLITZER: What about the $2 billion or $3 billion that goes every year to Israel? Do you want to eliminate that as well?

PAUL: Well, I think what you have to do is you have to look. When you send foreign aid, you actually send quite a bit to Israel's enemies. Islamic nations around Israel get quite a bit of foreign aid, too.

BLITZER: Egypt gets almost the same amount?

PAUL: Almost the same amount, so really you have to ask yourself, are we funding an arms race on both sides? I have a lot of sympathy and respect for Israel as a democratic nation, as a, you know, a fountain of peace and a fountain of democracy within the Middle East.
But at the same time, I don't [believe in] funding both sides of the arms race, particularly when we have to borrow the money from China to send it to someone else. We just can't do it anymore. The debt is all consuming and it threatens our well being as a country.

BLITZER: All right, so just to be precise, end all foreign aid including the foreign aid to Israel as well. Is that right?

PAUL: Yes.
Senator Paul has, of course, an important point here. Further, the current financial situation in the U.S.  means that cuts must be made even on the money we pay out to our favorite girlfriends.

The United States has grown into the great country that it is because of an adherence, though a slipping adherence, to free markets, respect for property rights and the rule of law. This model is the true gift we can give the people of any country: Watch how we grow and you to can do the same.

As for Israel, I have no problems with supporters of Israel sending their own private money over to the country, but if we are going to cut off foreign aid, I find it hard to understand how we are going to explain to American citizens of, say, non-Jewish African or non-Jewish Eastern European descent, that we are cutting off aid to their countries, but they must support aid to others.

Further, with supporters of Israel sending over their own money, the money is likely to be much more efficiently used. I find no comfort in thinking that U.S. government money sent to the Israeli government some how does not result in the corruption and inefficiencies that result when governments get in the middle of anything.

Lastly, I'm sure that Senator Paul's eventual goal with these spending cuts is to reduce taxes substantially. If the top tax rate can be cut from the 35% range to 25%, and a corresponding rate cut can be made at other tax brackets, then private sector funding of aid to Israel would seem to be very doable.

My very rough estimate of income in the United States by those who consider themselves Jewish, presumably the group most interested in supporting Israel, is $145 billion  (2.9 million Jewish households in U.S., average household income of $50k) . If the tax rates drop by a full 10%, this means that there is roughly an annual windfall of $14.5 billion to American Jews. This is roughly three times the amount of money sent to Israel each year as foreign aid. Thus, in the long run, American Jews would have no problem or hardship funding aid to Israel on a private basis, which I emphasize, again, would be more efficient funding. Further, even now, before tax cuts, to keep Israel funding at the same level, would only require 3% of income from private sector funding by Jewish households. One would think Jews could then decide, individually, whether to accept this burden, while America tightens its belt, and all other foreign countries see their foreign aid eliminated also.

Thus, especially given the long term positives, I would think any Jew doing the math would be in favor of Senator Paul's proposal, except, of course, those that are simply into coercion and want others to pay the bills for their favorite projects.

9 comments:

  1. The group most interested supporting Israel, at least in terms of population, is evangelical Christians.

    However, another point Paul should raise is that Israel has a European-level per-capita GDP. Should the US be sending foreign aid to France?! Of course, when you put it that way, it's completely absurd.

    Two points. I know I said in a previous comment that GDP is bogus, but it does serve a useful purpose for comparing different countries. Also, I live in Israel. The foreign is just another form of corporate welfare, as it must basically all be spent in the US. Israel is indeed a rich country and can easily take the hit. All the aid does is allow Israel to avoid its own painful and very necessary government reforms.

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  2. Robert, you've broached a horror!

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  3. And let's be honest - the aid we send to Egypt should be included in the tabulation of aid that we send to Israel, since in the end it has been used to support a pro-Israel tyrannical regime, and it's main contingency is that Egypt sustain it's pro-Israel posture amongst an otherwise hostile region.

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  4. Abolish the aid, yes.
    Then abolish all the hidden goodies Israel gets.
    A bizarre defense parity law that I don't fully grasp.
    A base over there that we pre-supply with various types of ammo, but they get to deplete at no cost to them.
    All the special trade laws

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  5. Unfortunately, "foreign aid" is just another way of saying "bribes." Various rich governments give money to small governments to get their cooperation. If the US stops giving bribes in the form of foreign aid, the US loses the cooperation of the smaller countries, and they effectively become puppets of the other wealthier nations such as Russia.

    Both Pauls are misguided when advocating this tack. It is a recipe for international disaster. This kind of self destructive thinking is why many conservatives will not strongly support Rand or Ron.

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  6. sometimes I feel as though the Pauls failed to read rothbard on criticizing the state. criticizing the state only makes it stronger. if they actually cut the spending the government can survive. however, if we just let them go they'd destroy themselves. isn't that the better rout?

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  7. Why is it "a policy for international disaster" that the US government is prevented from ludicrous foreign adventures by losing its 'coalition of the shilling' that would be good for all involved.
    And if some other major power wanted those millstones than more fools them.

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  8. Didn't Blizter use to work for AIPAC?

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  9. @anon 1/31/2011 2:04, yes.

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