That is a load.
US aid to Israel has largely been paid by single lump sum payments. There are particular defense contractors that offer lines of credit but these credits do not nearly consume the whole of US aid to Israel. And even so, paying Israels debts to contractors still means borrowing money we don't have to pay them.
This is just the MILITARY aid we have given them. We have given them wads of cash for domestic use too. All in cash grants.
WRMEA: U.S. Aid to Israel
Your main point being that what I said about US military aid to Israel creating tens of thousands of US jobs and much needed tax revenues to state and local governments is 74% accurate and that 26% of the money may be spent on military hardware from Israeli companies. I stand corrected.
It seems that in the past, the US agreed to allow Israel to use some of this money to develop weapons especially suited to its needs that US companies did not make and to buy the weapons from Israeli companies, but this had been done on a project by project basis, and as I now understand it, it was not until the 2007 agreement that Israel was allowed to use a fixed percentage of the aid for purchases from Israeli companies.
The process is as I described it. The money is transferred from the Treasury to an account at the Fed and as Israeli requests for purchases are approved by DoD (technically by Congress, but effectively by DoD) and the products delivered, payment is transferred from the Fed to the seller. If the sales are not approved, the money stays in the account at the Fed, but this rarely happens.
So if I understand you correctly, what rankles you is not the 74% that creates tens of thousands of American jobs and tax revenues to state and local governments, but the 26% that Israel spends with Israeli companies, $624 million in 2008. In the age of Obama when multi trillion dollar deficits are expected to become commonplace, $624 million is mere chump change, but perhaps you're right and Israel should be required to spend all the money with US companies.
You are not accounting for NON MILITARY AID. 76% of their MILITARY aid is spent with us. Just last year, 2008, we finally phased out ESF payments, which Israel has recieved in billions since 1971. At the same time we pulled the ESF, we began increasing the military aid.
One of the biggest "spit in your face" moves, is that the money that we do not give directly to israel is indeed placed into an account here, with the Federal Reserve, AN INTEREST BEARING ACCOUNT. They collect interst FROM US, using money WE GAVE them. That is INSANE.
Anyway, there is still money that we give Israel for cash assistance to immigrants. They fly in Jews from all over the world, give them language and job training, housing and cash assistance, on the US taxpayer.
Further, we extend loan guarantees that exceed our aid package and we regularly send special assistance in addition to the regular assistance.
To assert that all of the aid is spent with US contractors, or even 76% of the total aid, is a flat lie. And whatever amount they spend with US contractors does not make a difference in the amount of money we give away. And to rub a little salt in the wound, we allow them to collect interest on the money, from us.
It's all in the report.
http://www.fas.org/sgp/crs/mideast/RL33222.pdf