In the arena of US alliances, no relationship delivers the outsized return for the American taxpayer that the US-Israel partnership does.
Conventional wisdom often frames the annual $3.8 billion US credit to Israel (spent on the acquisition of military systems only in the United States) as solely foreign aid – a one-way handout at the expense of American taxpayers. Formally, it is foreign aid. However, due diligence reveals that this is a low/no-risk, high-return investment for the United States.
Since 1967, Israel has functioned as Washington’s premier dollar and defense multiplier, the most effective battle-tested laboratory, the most sophisticated commercial and defense research and development center (for over 250 US high-tech giants and the US defense and aerospace industries), a unique intelligence powerhouse, and a geopolitical force amplifier with no American military bases on its soil.
The Two-Way Street
In fact, US-Israel cooperation has been mutually beneficial, generating an annual Return-on-investment (RoI) of more than 1,000 percent on Washington’s foreign aid to Israel. This has yielded the United States billions of dollars in research and development savings, bolstered economic output and export, expanded employment, increased tax revenues, technological edge, and enhanced US national and homeland security. No other ally can deliver such benefits.
At the heart of this multiplier effect lies Israel’s role as a real-time, combat-proven showroom and innovation hub for the US defense and aerospace industries. For example, in 2018, Israel was the first country to receive the F-35 combat aircraft for operational use. At the time, leading US experts considered it a failed program.
However, by 2019, the combat-experienced Israeli Air Force, together with Lockheed-Martin, had solved practically all software/technical and hardware/mechanical glitches. This transformed the F-35 into the flagship of the US Air Force’s future fighter fleet and the premier project of the US aerospace industry. The Israeli experience and resulting upgrades have been shared daily with the US manufacturer, saving 10 to 20 years of research and development and perhaps tens of billions of dollars. These battle-tested refinements have dramatically enhanced the aircraft’s reliability, maintainability, electronic warfare capabilities, weapons integration, and survivability. As a result, since 2019, the uniquely intense use of the F-35 by the Israeli “showroom” has yielded a surge in global demand. More than 1,200 F-35s have been exported since 2019 to US allies, including Britain, Canada, Australia, Japan, South Korea, Germany, Italy, and others. By late 2025, Lockheed-Martin reported a staggering $173 billion to $179 billion backlog and $72 billion in annual US economic output, including $40 billion in exports.
Currently, the F-35 project supports 290,000 jobs (a 35 percent expansion since 2019). It contributes about $3 billion in annual corporate and personal income tax revenues to the US Treasury. This almost completely offsets the $3.8 billion annual investment in Israel from this single platform alone.
This role of Israel as a unique dollar and defense multiplier for the US applies to dozens of advanced military systems, enhancing the fortunes of American US defense and aerospace industries, which employ 2.5 million people. For instance, Boeing’s Apache attack helicopter and Lockheed Martin’s Black Hawk utility helicopter have benefited from Israel’s intense operational tempo since the 1990s. Israeli combat use has resulted in upgraded avionics, survivability features (including advanced missile warning, electronic warfare, and countermeasures), and combat networking for the helicopters.
These improvements, validated in real-world conditions rather than simulations, have slashed research and development timelines and costs. For the Apache the figure is $16 billion; for the Black Hawk, $21 billion in today’s dollars. Moreover, Israel’s track record has propelled American exports, such as recent Apache deals with Poland, South Korea, Britain, and others, in excess of $20 billion. Black Hawk sales to Greece, Australia, Sweden, Brazil, and others totaled $8 billion to $10 billion for 2023–2026 alone. Similar dividends flowed from F-16 and F-15 combat aircraft, and from US-made precision munitions, drones, and air defenses.
Israeli Innovation
Beyond hardware, Israel serves as the US armed forces’ premier innovation center for battle tactics and training. Israeli operational lessons—drawn from thousands of hours in high-intensity, do-or-die environments—have reshaped US doctrine in air-to-air combat, radar suppression, urban warfare, counter-IED (improvised explosive devices) operations, special forces raids, and hostage rescue. In addition, US Special Operations battalions on their way to Iraq and other countries spend a few weeks in Israel, trained by Israeli experts in facing car bombs, suicide bombers, and the deadly IEDs.
US urban warfare units have adopted a training program based on the Israeli daily experience in facing Islamic terrorism in Lebanon, Syria, Judea, Samaria, and the Gaza Strip. Furthermore, the 1976 Entebbe (Jonathan) Operation directly inspired US counter-terrorism in general and creation of the Delta Force in particular. The 1982 “Operation Mole Cricket 19” destroyed 20 advanced Soviet surface-to-air missile batteries (which were perceived by the US to be impregnable) and downed 82 Syrian (Soviet) MiGs without Israeli losses, remains a cornerstone of US Air Force training programs and battle tactics.
More recently, Israel’s systematic sharing of maintenance, repair, and performance data on the F-35, F-16, and F-15 in the war against Iran has provided the Pentagon with priceless insights into the vulnerabilities of Chinese and Russian air defenses, aircraft, and ballistic missiles, which are deployed throughout the globe. These insights have impacted the global balance of power by eroding China’s and Russia’s deterrence posture, while bolstering the US’s own deterrence. No other ally provides the US with such an intensive, high-quality volume of national and homeland security support.
Intelligence Cooperation
Intelligence cooperation delivers a most staggering RoI due to Israel’s demography, which includes many people who could easily blend into every Muslim country, as well as Israel’s daring, innovative, can-do, defiance of odds, and out-of-the-box state of mind. Former US Air Force Intelligence Chief, General George Keegan, stated in an interview with the New York Times that the scope of intelligence provided by Israel would require the US to maintain “5 CIAs.” The annual budget of one CIA is around $15 billion, which amounts to a 400 percent annual RoI on the $3.8 billion annual investment, and probably three to five times as much. Senator Daniel Inouye, who served as the chairman of the Senate Intelligence Committee, assessed that Israel shares with the US more critical intelligence on enemy and rival military systems and counterterrorism than all NATO countries combined.
For example, in 2017, Israeli human and signal intelligence exposed a Syrian ISIS unit, which developed the means to insert explosives into laptops, bypassing US civic airport security. Upon receiving the information from Israel, the US upgraded its airport security systems, which prevented a catastrophic loss of human lives, severe cost to US airliners, and a grave blow to public morale and the US’s deterrent posture. Israeli tracking aided the elimination of key Shiite and Sunni Islamic terrorists.
Moreover, Israel has delivered Soviet-era advanced military hardware, such as the MiG-21 and MiG-23, the T-72 tank, the SA-6 missile, and the P-12 radar to the US. These were leveraged for reverse-engineering, radar-jamming techniques, and battle-tactic refinements that tilted the Cold War balance of power. Recent contributions include detailed profiles of Iranian drones, North Korean ballistic missiles, and Hezbollah networks in the Middle East, Africa, Latin America, and on US soil. This directly enhances US homeland security, the safety of US installations in the Middle East and worldwide, and the stability of all pro-US Latin American and Arab regimes.
Strategic Value
Strategically, Israel serves as the largest US military beachhead with no American troops on the ground. This is equivalent to several unsinkable aircraft carriers and multiple ground divisions in the Mediterranean-Red Sea-Indian Ocean-Persian Gulf theater. During the 1970s and the 1980s, Admiral Elmo Zumwalt, who served as Chief of Naval Operations, and General Alexander Haig, who served as NATO Supreme Commander and US Secretary of State, contended that Israel’s experience and potential replaced the need to manufacture and deploy a few more aircraft carriers to the Indian Ocean and Mediterranean Sea and deploy a few ground divisions to the Middle East. The cost of one advanced aircraft carrier is $10-$13 billion (more than 300 percent RoI), and the cost of deploying one ground division to the Middle East is $1 billion.
This region serves as the source of 48 percent of global oil reserves, the intersection of critical shipping lanes between the Far East and the West, and the epicenter of global anti-US Islamic terrorism. Israel’s deterrent posture has minimized the instability of pro-US Arab regimes (especially Jordan), facilitated six Israeli-Arab peace treaties, and constrained the maneuverability of Russia, China, and anti-US Sunni and Shiite Islamic terrorists. Contrast this with the $35 billion annual cost of US military bases in Western Europe, in addition to 80,000 US servicemen stationed there.
Historical Precedents
Israel’s 1967 victory aborted the Soviet-backed Egyptian offensive to assume pan-Arab leadership, while toppling all pro-US Arab oil-producing regimes. That would have dealt the United States a historic economic and national security setback, while boosting the global strategic stature of the US. In 1970, pro-Soviet Syria invaded Jordan, aiming to topple the pro-US Hashemite regime and trigger ripple effects, toppling pro-US Arab Gulf regimes. This was averted by Israel’s deployment of military forces to the Golan Heights (the tri-border area of Israel, Syria, and Jordan) at a time when the US was bogged down in Southeast Asia. The 1973 Yom Kippur War victory convinced Egypt to realign itself from pro-Soviet to pro-US. The 1981 Israeli destruction of Iraq’s nuclear reactor snatched all pro-US Arab oil producers from the jaws of pro-Soviet Saddam Hussein, and spared the US a potential nuclear confrontation during the 1991 First Gulf War.
Israel’s 2007 destruction of Syria’s nuclear reactor averted the first civil war in a country possessing nuclear weapons, (Syria). The 2024 Israeli offensives against the Iranian-backed Hezbollah in Lebanon sparked the toppling of Syria’s Assad regime. That in turn opened the door for the US to replace Russia as Syria’s major influencer. The June 2025 Israeli air offensive against Iran’s Islamic revolutionary regime devastated Tehran’s air defenses and air force, enabling the US air force to bomb the three leading Iranian nuclear sites unimpeded. This exposed the vulnerabilities of Chinese and Russian air defenses and tilted the global balance of power in favor of the US.
Israel’s Reliability
Israel presents zero “zig-zag” risk, unlike other allies of the US, like regimes in Iran, Libya, Egypt, Iraq, and Yemen, which have flipped from pro-US to anti-US overnight due to coups, revolutions, or ideological shifts. Qatar hosts the massive Al Udeid base, yet bankrolls Hamas and the Muslim Brotherhood, anti-US Sunni terrorists, while on-again off-again cozying up to Iran’s anti-US regime. European allies’ support of US action is often conditioned upon domestic politics or multilateral approval, earning the quip “NATO = No Action Talk Only.” Realistically, Western Europe is not willing to flex a muscle against Islamic terrorism and additional threats, if – given shrunken military establishments – there is substantial muscle left. Israel, by contrast, maintains a rock-solid, cross-spectrum pro-US domestic consensus (Left and Right, secular and religious, hawks and doves). It does not wish US bases on its soil; it almost fully funds and fully mans its own military forces, and acts preemptively against mutual threats. Since joining the CENTCOM (Central Command) in 2021, operational integration has surged dramatically, enhancing CENTCOM’s preparedness and battle tactics.
Israel’s multiplier-effect extends beyond defense into commercial high-tech. More than 250 US firms such as Google, Intel, Nvidia, Microsoft, Apple, John Deere, Johnson & Johnson, and General Electric maintain R&D centers in Israel, leveraging its brainpower, defiance-of-odds culture, and frontier mentality to pioneer dual-use breakthroughs in artificial intelligence, cyber, communications, medicine, agriculture, irrigation, and financial technology. These innovations sustain US global technological supremacy, boost exports, and create high-value jobs.
The Bottom Line
Israel is to the US what Michael Jordan was to Nike—a transformative global ambassador and performance enhancer—but on a vastly larger, strategic scale. It is a self-funded, battle-hardened, democratic partner whose contributions to the US economy, national and homeland security, and power projection dwarf the annual investment (misperceived as “foreign aid”) of $3.8 billion.
In an era of peer competition and persistent threats, this mutually beneficial alliance remains indispensable. Elected officials and constituents alike would do well to recognize it as one of Americas most astute investments—delivering the American taxpayer unmatched financial and defense returns that help secure freedom, prosperity, and deterrence.
In a world of costly uncertainty, a compact, capable ally that translates battlefield lessons into market-ready solutions is not merely valuable—it is indispensable.
Amb. Yoram Ettinger (ret.), served as Israeli consul-general in Houston, Texas and chief congressional liaison at the Israeli Embassy in Washington, D.C.
