Israel would lose its military edge (where all the US money goes to), but they would still remain a strong industrialized Western style democratic country.
Israel might be poor in resources, but they have achieved a lot! They went from 0 to an developed industrial western style powerhouse faster than any country ever! She maintains a diversified mixed economy with substantial state ownership and a rapidly developing high-tech sector
(1) Israel is considered one of the most advanced countries in Southwest Asia in economic and industrial development. The country is ranked 3rd in the region on the World Bank's Ease of Doing Business Index. Which is an amazing feat given her surrounding enemies
Rankings - Doing Business - The World Bank Group
(2) It has the second-largest number of startup companies in the world (after the United States) and the largest number of NASDAQ-listed companies outside North America
NASDAQ Newsroom
(3) In 2007, Israel had the 44th-highest gross domestic product and 22nd-highest gross domestic product per capita (at purchasing power parity) at US$232.7 billion and US$33,299, respectively.
Report for Selected Countries and Subjects
(4) Israel is part Organisation for Economic Co-operation and Development, which promotes free trade between many countries.
Organisation for Economic Co-operation and Development - Wikipedia, the free encyclopedia
(5) Intensive development of the agricultural and industrial sectors over the past decades has made Israel largely self-sufficient in food production, apart from grains and beef.
(6) Israel is a world leader in: (a) Argicultural developments and produce, (fruits, vegetables), (b) pharmaceuticals, (c) software, (d) chemicals, (e) military technology, (f) diamonds, (g) water conservation (h) geothermal energy, (i) Solar energy and (j) its development of cutting-edge technologies in software, communications and the life sciences have evoked comparisons with Silicon Valley; in 2006, Israeli exports reached US$42.86 billion
https://www.cia.gov/library/publications/the-world-factbook/geos/is.html
Israel keen on IT tie-ups
(7) Israel's Silicon Valley: Israel has want Warren Buffet and Bill Gates calll the "The Silicon Valley in the Desert!" Both have moved many operations over to Israel
(8) Israel's Economy remains strong:
$205.5 billion GDP in 2008 (which grew 4.5% from the previous year) that is $185,883 (or 55th in the world) in GDP PPP. She had a 5.9% unemployment rate in 2008 (put has surely gone up). And in 2008 only 10.8% of the population lived under the poverty line.
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
Israel's media household income is $37,000 which is 7th highest behind, Switzerland, US, Canada, New Zealand, UK and Austrialia!
http://www1.cbs.gov.il/www/publications/households06/pdf/t03_1.pdf
(9) Israel has one of the most advance education systems in Asia. It has the 2nd highest school live rate and the highest literacy rate in Asia.
http://web.archive.org/web/20070702184520/http://hdr.undp.org/reports/global/2005/pdf/HDR05_HDI.pdf
Israel's seven research universities (excluding the Open University) have been ranked in the top 500 in the world.
ARWU2006-Top 500 World Universities
Israel ranks third in the world in the number of citizens who hold university degrees (20 percent of the population).
Israeli Consulate, NYC - Economic Mission
(10) Scient: Israel has produced four Nobel Prize-winning scientists and publishes among the most scientific papers per capita of any country in the world.
Chemical & Engineering News: Science & Technology - Globalization Of Science Rolls On
(11) Israel has embraced solar energy, its engineers are on the cutting edge of solar energy technology and its solar companies work on projects around the world. Over 90% of Israeli homes use solar energy for hot water, the highest per capita in the world.
They are also rolling out the electric car.
http://www.environmentcalifornia.org/uploads/at/56/at563bKwmfrtJI6fKl9U_w/Solar-Water-Heating.pdf