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Israel Has Reached Childhood's End -- It's Time to End U.S. Aid to Israel

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"I believe that we can now say that Israel has reached childhood's end, that it has matured enough to begin approaching a state of self-reliance ... We are going to achieve economic independence [from the United States]."
Israeli Prime Minister Benjamin Netanyahu to a Joint Session of the United States Congress - Washington D.C., July 10, 1996
(Source: Israeli Ministry of Foreign Affairs )

It's been over 15 years since PM Netanyahu's speech to a joint session of Congress stating Israel's goal of economic independence. In 1997, Israel received $3.1 billion in aid from the U.S. In 2012, Israel was still receiving $3.1 billion annually in U.S. aid. We haven't made much progress towards PM Netanyahu's goal. For Israel's sake, as well as for America's, it's time to reduce U.S. annual aid to Israel -- to 0 -- over some reasonable adjustment period (perhaps 5 to 10 years), leaving open the possibility, of course, for emergency aid.

Let me emphasize that this isn't a call to end America's close and special relationship with Israel. Israel certainly isn't a perfect society. But its ideals of freedom of speech, freedom of religion, and tolerance are closer to America's ideals than any other country's in its region.

Nor is this a call for America to disengage from the vital task of keeping Iran from acquiring nuclear weapons, a common interest of both the U.S. and Israel. Israel -- as with our other close allies (such as the UK) -- should still have access to American weapons. But it should pay for them on normal commercial terms, rather than receiving them as part of an aid package. The U.S. should move to a more normalized relationship with Israel because:

A) Israel has become an affluent and developed country that can afford to pay for its own defense. Israeli GDP is about $250 billion dollars/year, and its per capita income is about $33,000/year. In other words, replacing all American aid would cost Israelis about 1 percent of their income per year, hardly an outrageous sum. Aside from the financial metrics, Israel has a well developed economy in other ways. For example, on the UN Human Development Index, Israel ranks 16th (between Denmark and Belgium). Israeli life expectancy at birth is 81 years, compared with only 79 years in the United States.

Also, as a general principle, people and institutions make better choices when they have to internalize costs. If the U.S. ends aid to Israel, Israelis may make better choices about their national defense and foreign policy.

B) Other countries/programs could better use this aid money. Although somewhat related to the above point, this matter is worth highlighting separately. To the extent the U.S. is committed to helping other countries, there are many of the world's nations in far more desperate situations than Israel. More than 20 nations have life expectancies below 60 years, and many also have appallingly high infant mortality rates. All of these countries could benefit from the aid the US directs to Israel.

Even domestically, the aid that goes to Israel could be useful. Detroit is bankrupt, and our Congress is cutting back on food stamps, and making other painful budget cuts.

C) Israel and the United States have increasingly different visions about the future of the Middle East. We shouldn't subsidize a country (even an ally) that is undermining our policy goals. The U.S. has long-term goals in the Middle East (including avoiding the humanitarian and financial catastrophe of another major war in the region). A major (bipartisan) goal of the United States has been the two-state solution to the Israeli-Palestinian conflict. Israel has legitimate security concerns, and a just peace will not be easy to achieve.

However, the current Israeli government is clearly not committed to the U.S. vision, and has done everything possible to sabotage American efforts. Israel's continued building of random settlements -- all over what's supposed to become the State of Palestine -- directly conflicts with American policy goals. As Secretary of State Kerry recently commented, the United States believes the Israeli settlements in Palestine:

"are illegitimate. And we believe that the entire peace process would in fact be easier if these settlements were not taking place. ... if you say [Israel is] working for peace and [Israel] want[s] peace, and a Palestine that is a whole Palestine that belongs to the people who live there, how can [Israel] say we're planning to build in a place that will eventually be Palestine? So it sends a message that perhaps [Israel] is not really serious."

In exchange for $3 billion dollars/year in aid to Israel, the least the U.S. should expect is that the Israeli government be serious about negotiating peace with the Palestinians.

If the Netanyahu government can afford to build additional settlements, it can afford to do without American aid.

Steven Strauss is an adjunct lecturer in public policy at Harvard's Kennedy School of Government. Immediately prior to Harvard, he was founding Managing Director of the Center for Economic Transformation at the New York City Economic Development Corporation. Steven was one of the NYC leads for Applied Sciences NYC (Mayor Bloomberg's plan to build several new engineering and innovation centers in NYC), NYC BigApps and many other initiatives to foster job growth, innovation and entrepreneurship. In 2010, Steven was selected as a member of the Silicon Alley 100 in NYC. He has a Ph.D. in Management from Yale University, and over 20 years' private sector work experience. Geographically, Steven has worked in the U.S., Asia, Europe and the Middle East. You can follow him on Twitter at: @Steven_Strauss