Is the Alliance with Israel a Burden or a Bargain, the Ledger Examined

Every bookkeeper knows that a ledger with only one column is not a ledger, it is a complaint. Debate about the American alliance with Israel is almost always conducted that way. One side holds up a number, usually a large and round one, and asks whether America can afford it. The other side holds up a feeling, usually a warm one, and asks whether America can abandon a friend. Neither is really an argument. So let us do what an accountant would do: put every entry on the page, with the arithmetic shown, and see what is left.

My claim is that the alliance is a bargain on its own numbers, and that the best objection to it, the restrainer critique, deserves a serious answer and gets one in this post. I will also list the real costs, because a ledger that hides its debits is dishonest and because the strongest case is made by a writer who has looked at them.

Let me define terms. Foreign Military Financing, or FMF, is a U.S. program that gives grants to a foreign government to buy American-made defense goods and services. A memorandum of understanding, or MOU, is a multi-year agreement setting the level of that aid. Co-production means that a weapon is built jointly, with parts or whole systems manufactured in both countries. Restrainers are those who argue that America should reduce its military commitments abroad and avoid entangling alliances.

The figure everyone cites

On September 14, 2016, the United States and Israel signed a new ten-year memorandum of understanding covering fiscal years 2019 through 2028. Its headline number is $38 billion, divided into two parts: $33 billion in FMF grants and $5 billion for missile defense programs. Spread over ten years, the arithmetic is simple:

• $38 billion divided by 10 years equals $3.8 billion per year.
• Of that, $33 billion divided by 10 equals $3.3 billion in FMF each year.
• And $5 billion divided by 10 equals $0.5 billion for missile defense each year.

It replaced an earlier agreement, signed in 2007, which provided $30 billion over fiscal years 2009 through 2018, or $3 billion a year. The new figure is $8 billion more over a decade, an increase of about 27 percent in the annual number.

Now, let me put that in proportion, using the Treasury's figures that the nation has on its own books. The total public debt was $40.56 trillion on November 5, 2026, and $38.05 trillion on November 4, 2025. The difference is $2.51 trillion, or $2,510 billion, added in about a year. One full year of the aid, $3.8 billion, divided by $2,510 billion, comes to about 0.15 percent of the debt added in that year. That is under two-tenths of one percent. If you are worried about the national debt, and conservatives should be, you can watch the debt clock and see for yourself that this line is not the one driving it. The debt is driven by programs hundreds of times larger.

I do not offer that to say the aid is free. A dollar is a dollar. I offer it because anyone who thinks that ending the aid would fix the nation's finances has misplaced the problem by two orders of magnitude.

The first entry on the credit side: where the money goes

Here is the fact that surprises most people who first hear it. FMF is not a check that Israel cashes at will. It is a grant to buy American-made goods. The money is appropriated by Congress, held in an account at the U.S. Treasury and used to pay American contractors for American-built equipment, from aircraft to munitions to spare parts.

Until the 2016 agreement, Israel was allowed to spend roughly a quarter of its FMF on its own domestic defense industry, a provision called off-shore procurement. The 2016 memorandum phased it out. Under the new terms, the share spent in Israel goes down over time and ends, so that by the final years the grants are spent entirely in the United States. That is a significant concession, and it was one that Israel made, in effect directing its aid to American factories and American jobs. The money goes, in the end, to the American defense industrial base: to the companies and workers who build the aircraft, the engines, the bombs and the interceptors.

This is where I want to challenge the phrase "foreign aid" as used in this case. It is aid in the sense that Israel gets the benefit of the weapons. It is also a subsidy to American production lines, which helps keep them open and lower the unit cost for America's own forces. The production base for some of these systems depends on steady orders. A line that builds fighters for an ally is a line that is available to build them for us. The industrial point matters especially given what has been said about the strain on American shipbuilding and munitions capacity in The Shipbuilding Gap with China Is an Industrial Story Before a Navy Story.

The second entry: Iron Dome and what it taught

The best illustration is missile defense. Israel developed the Iron Dome system, a short-range defense against rockets, and American money has helped to fund it. The American role goes beyond funding. Raytheon and the Israeli firm Rafael have partnered on American production of Iron Dome, and in 2020 they formed a joint venture to build the Tamir interceptor at a plant in the United States, which brings the production work and know-how to American soil. The U.S. Army also planned to acquire two Iron Dome batteries for its own use as an interim defense against cruise missiles, a sign that the system produced something the Pentagon wanted.

Israel has also developed other layers of missile defense, some of them with American partners. Raytheon is Rafael's American partner on David's Sling. These programs are the reason that part of the $38 billion is set aside for missile defense. For the United States, the benefit is concrete. Defenses against missiles are a priority for American forces, and a close partner that tests such systems against real attacks produces data that no laboratory can.

The third entry: what an ally gives back

Intelligence is the entry that is hardest to put a price on and, I suspect, the most valuable. Israel is a major collector of intelligence on the region that is home to the world's largest oil reserves, to several terror organizations and to Iran's nuclear program. The American government has long valued intelligence sharing with Israel, and it flows in both directions. I do not have a figure for it, and neither does anyone who writes about it in public, since the substance is classified. A fair ledger says so: this is a credit that cannot be counted from the outside. It would be dishonest to leave it out and dishonest to inflate it.

There is also a stockpile. America keeps war reserve ammunition stocks in Israel, a pre-positioned supply that Israel can draw on in an emergency, with Israel paying most of the cost of storing and maintaining it. In a crisis, what is already in place counts for much more than what is promised.

The fourth entry: no troops

This is the point that sets Israel apart from most American allies. America has no mutual defense treaty with Israel. It does not station permanent combat forces there to defend it. Israeli leaders have often said that they will defend themselves, and that they ask for the tools to do so, not for American soldiers. Compare that with the commitments under the North Atlantic Treaty, covered in Read the North Atlantic Treaty, All Fourteen Articles Take Ten Minutes, or the American garrisons in Europe and Asia. Per dollar, a partner that fights its own battles and asks for equipment, not for troops, is a very different proposition from one that requires a permanent American presence.

The 1973 airlift illustrates both sides of that arrangement. America shipped materiel to Israel, as told in The 1973 Airlift That Saved Israel and Cost America an Oil Embargo, but no American soldiers fought in the war. The war ended with Israeli forces across the Suez Canal and a cease-fire in place.

The debit side: the real costs

Honesty requires the other column, and it has genuine entries.

The 1973 oil embargo was a direct cost of supporting Israel, as the post on that airlift explains. It was paid by American consumers.

The USS Liberty. On June 8, 1967, during the Six-Day War, Israeli aircraft and torpedo boats attacked an American intelligence ship in the Mediterranean, killing 34 American sailors. Israel called it a case of mistaken identity, apologized, and later paid compensation. Debates about whether the attack was truly an accident continue. It is a painful entry, and I list it because it is part of the record.

The Pollard case. Jonathan Pollard, an American Navy intelligence analyst, was arrested in 1985 for passing classified material to Israel, and was sentenced to life in prison in 1987. It was a serious betrayal of American trust, and it damaged the relationship. I report it because any ledger that skips it is not a ledger.

Diplomatic costs with Arab states and others have been real at times, though the pattern has shifted over the decades.

Disagreements. America and Israel have not always agreed, and an alliance does not require agreement. Washington has pressed Israel on matters on which the two governments differ, and Israel has pressed back.

The restrainer case, stated fairly

The strongest critique comes from those who argue that America should reduce its commitments in the Middle East. Stated at its best, the argument runs as follows.

1. Israel is a wealthy, technologically advanced country that can afford to pay for its own defense.
2. Aid creates a perception of dependence, allows American officials to be blamed for Israeli policy and complicates relations with other countries.
3. The alliance carries a risk of entanglement: a regional war could pull the United States in, even without a treaty.
4. The same money could be spent at home or kept from the debt.

These are serious points, argued by serious people, some of them conservatives who share my respect for the Founders' warnings. Washington's Farewell Address urged the nation to steer clear of permanent alliances with any portion of the foreign world, a text that What Washington's Farewell Address Really Said About Foreign Entanglements examines closely.

The answer, on its own terms

I will take the restrainer case in its own terms, which are cost, risk and independence.

On cost: the arithmetic above shows an annual outlay of $3.8 billion, about 0.15 percent of one year's increase in the debt, with the FMF portion spent in America and the missile defense portion producing systems America uses. If the goal is to save money, there are places to look before this one, and a conservative should look at them first. The case of waste is better made against programs with a record of failure, as discussed in The Pentagon Has Never Passed an Audit, and Conservatives Should Mind.

On wealth: it is true that Israel is a prosperous country, and a fair question is whether aid should phase down over time. The 2016 memorandum itself reflects that, by ending the off-shore procurement provision. Reasonable conservatives can argue for a gradual phase-out, with a long runway, as a matter of principle. What the data does not support is the claim that the alliance is a one-way drain.

On entanglement: Washington's warning was against permanent alliances that bind us to another country's quarrels. An arrangement by which America sells and grants equipment, and keeps its own forces at home, is just about the least entangling form a partnership can take. It is the opposite of a mutual defense treaty. The alliance ties our hands less than a treaty would.

On independence: the argument works best when it is turned around. American security depends on keeping the most dangerous weapons out of the hands of the most dangerous regimes. Israel's willingness to bear that burden, as in the case told in Israel Bombed Osirak in 1981 and the World Later Thanked It in Private, saves American troops from having to do it.

There is a further point. Allies are not charity cases. They are partners whose interests overlap with ours, and the test of an alliance is whether it serves both countries. The ledger above suggests it does. If it ever stopped, a Congress that appropriates the money every year has the power to change it, since Article I, Section 9 says no money can be drawn from the Treasury except in consequence of appropriations made by law. That is how the Founders set it up: the purse belongs to the people's representatives, not to a memorandum. You can see how a representative votes on such items through the scorecard.

Where the ledger stands

A one-column ledger made a good slogan. A two-column ledger makes a better judgment. The aid is real and large in absolute terms, and small in proportion to the problems it is blamed for. The money is spent mostly in America, for goods America needs. The partner asks for no troops. And the costs, from the embargo to the Liberty to Pollard, are on the page where honest readers can see them. If you want to examine the same question for other kinds of aid, Foreign Aid Is Not a Quarter of the Budget, and Other Myths Tested and PEPFAR and the Marshall Plan, When Conservatives Defended Foreign Aid test it.

And one last wry note. The people who say the alliance costs too much and the people who say it should never be questioned have something in common: neither has opened the Treasury's own books. They are arguing about a number neither has divided by ten. Try it. It is a short division, and it takes the heat out of the room.

The case in brief

1. The 2016 memorandum provides $38 billion over fiscal 2019 to 2028, which is $3.8 billion a year, made up of $3.3 billion in FMF and $0.5 billion for missile defense.
2. One year of that aid equals about 0.15 percent of the $2.51 trillion added to the debt between November 4, 2025 and November 5, 2026, so it is not what drives the debt.
3. FMF is spent on American-made goods, the off-shore share is phased out, and systems like Iron Dome are co-produced in the United States.
4. Israel asks for equipment and not for troops, which makes it among the least entangling alliances America has.
5. The debits are real, including the 1973 embargo, the USS Liberty and the Pollard case, and the restrainer critique deserves an honest answer, which this ledger supplies.

What you can do: look up the foreign operations appropriations bill on Congress.gov, read the actual line items for Israel, and ask your representative to explain their vote.