Why Aid to Israel Hurts . . . To bail out or prop up every money-losing socialist institution in the country. Free money is the scourge of Israel s economy. It is the difference between a free, prosperous Israel and a statist, dependent Israel. Free money consists of unilateral transfers in the national income accounts.
Free money is first and foremost U.S. aid to Israel.
It reached its present proportions during 1984 1985. In addition to official U.S. aid, free money includes German reparations, individual remittances, and institutional remittances. During the past decade, free money has supplied between 10 and 15 percent of Israel s gross domestic product and has amounted to the equivalent of some 20 percent of government spending. This sum is sufficient to bail out or prop up every money-losing socialist institution in the country, provide hefty pay raises for government employees, and even leave some money left over for investment. The single best indicator of economic development and growth is the annual increase in per capita income.