Furies of concerned and critical commentaries across Malaysia
Israel’s war debts, USA merchant of war profiteers
Collective on Foreign Affairs
23/11/23
PREAMBLE
According to the Center for Responsive Politics, in the United States of America, individuals and political action committees associated with the “defence” sector contributed nearly $24 million to political candidates and committees during the 2008 campaign cycle, split evenly between Democrats and Republicans. While Republicans have been favoured in the past, ultimately contributions are made to whoever is in power.
It is believed that during the last two decades, the Military Industrial Complex (MIC) had contributed a total of US$150.8 million, with 57 percent going to Republican candidates.
The Center for Responsive Politics further states that this defense sector also has a formidable federal lobbying presence, having spent US136.5 million in 2009, down from a high of US$150.8 million the previous year.
In 2009 alone, there were more than 1,100 lobbyists represented nearly 400 clients. The amount spent on “defence” lobbying and the number of lobbyists has steadily increased during the last two decades.
In fact, financial capitalism that has supported the MIC’s biggest companies include Lockheed Martin, Boeing, General Dynamics, Northrop Grumman, and Raytheon. Allowing these companies to make donations to politicians means that the weapons manufacturers can secure government “defence” contracts, which are often lucrative. It also means they influence the budget by targeting House and Senate members who sit on the armed forces and appropriations committees overseeing military and “defence” spending.
While both Republicans and Democrats recruit representatives across the country to guarantee the Pentagon’s billion dollar contracts, it is the American taxpayer that underwrites the large weapon manufacturing plants across the country. Many lobbyists, retired service men and women, negotiate billion dollar contracts using insider information they obtained while employed at the Pentagon.
TheWar , which the Israeli Finance Ministry estimates is costing the economy around $270 million every day, will come with a fiscal price tag estimated at 180 billion shekels (US$48 billion) in 2023-2024, according to an Israeli financial advisory: Leader Capital Markets, (Bloomberg ²³/¹¹/²³).
Cited by Al-Jazeera, are estimations that Israel could lose anywhere between US$51 to US$60 billion if the war continues for eight months. This represents nearly 10 percent of the total GDP of Israel.
Moody’s estimates that the Israeli economy will shrink by 1.5 percent next year; that the budget deficit will widen to 3 percent this year while The Financial Times argued that Israel’s economic woes will extend to next year’s budget, predicting that the fiscal deficit will double three times by next year, (palestinechronicle 23/11/23).
Indeed, Israel’s $48 Billion War Bill shall leaves its fate with the Bond Markets and respective merchants of death profiteering entities.
Israel has borrowed billions of dollars in recent weeks through privately negotiated deals to help fund its war against Hamas but is having to pay unusually high borrowing costs to get the deals over the line.
Since Hamas’s attack on October 7, Israel has raised more than $6bn from international debt investors. This has included $5.1bn across three new bond issues and six top-ups of existing dollar and euro-denominated bonds, and more than $1bn of fundraising through a US entity.
Investors said recent bonds had been issued in so-called private placements, a process through which the securities are not offered to the public market but instead sold to select investors.
The final pricing of the deals was not disclosed.
However, bankers said they had priced in line with what they would expect from a public deal. Of two dollar bonds issued in November, Israel is paying coupons of 6.25 per cent and 6.5 per cent on bonds maturing in four and eight years’ time. That is much higher than benchmark US Treasury yields, which ranged between 4.5 and 4.7 per cent when the bonds were issued.
The deals were arranged by Goldman Sachs and Bank of America respectively. In contrast, Israel issued a 2033 dollar bond in January with a coupon of 4.5 per cent, a much smaller spread — or gap — above Treasury yields, which were 3.6 per cent at the time.
Israel’s bond issuances to help fund the war are viewed as controversial in some parts of the debt market. While some investors, for instance in the US, have been keen to lend to the country following the October 7 attacks, others view the fundraising as anathema, given the humanitarian cost of Israel’s invasion of Gaza. Investors and analysts noted that the bumper issuance was done through private placements rather than via open syndications and roadshows, which are usually carried out when new bonds are launched. The reason for this, they said, could be to raise funds for the war effort quickly or without attracting unwanted attention, and could be a sign of how nervous some investors had grown about buying Israel’s debt.
“The reality is that, for a lot of investors, Israel at the moment carries too much ESG [environmental, social and governance] risk, especially for some emerging market investors where Israel is off benchmark,” said Thys Louw, emerging market debt portfolio manager at fund manager Ninety One…
Investors note that Israel’s debt, which has a double A minus credit rating from S&P, is trading at a chunky discount to countries with similar credit ratings such as South Korea … Brazil, which has a triple B minus credit rating from S&P, six rungs lower than Israel, issued a seven-year dollar paper this week in its first-ever foreign currency sustainable bond with a yield of 6.5 per cent.
Israel has also turned to individuals and municipalities to raise debt. Israel Bonds, which is registered in the US but affiliated to Israel’s finance ministry, has sold more than $1bn of bonds since October 7, almost doubling the amount it had raised for the year. … More than 15 US states have invested in Israel Bonds since the war broke out including Florida, New York, Texas, Alabama, Arizona and Ohio.
“We have never faced such huge support, in terms of the numbers or the scope of investments, by so many people,” said Naveh. “It allows the ministry of finance in Israel to raise billions of dollars of additional debt to fulfil all its special missions following the war.”
Israel’s war against Hamas (readWider MENA War and Widening MENA War Part II) is costing the economy around US$260 m. every day, with payouts to ultra-orthodox schools and other causes championed by right-wingers in the ruling coalition have set off a reckoning for Prime Minister Benjamin Netanyahu.
For example, the cost to insure Israeli sovereign bonds against a default is more than double what it was before the war began. And the risk premium, or spread, investors demand to hold Israeli dollar notes over US Treasuries remains about 25 basis points higher.
(see also the article Demilitarising Gaza tunnel ecosystemwhere the credit spread is defined as the difference between a risky bond and the risk free treasury bond with greater risk demanding a greater risk premium as compensation.
It has to be noted that Israeli capitalism was brought into being by the Labor Zionist movement (today represented by the Labor Party) and that the Oslo process was a key step in its formation. The unlikely roots in idealistic socialism at its foundation on socialism is all but gone, replaced by neoliberalism and financialisation capitalism. The irony is not lost when one of Israel’s biggest banks used the slogan “Bank Hapoalim: habank shel ha’asakim” – which, paradoxically, translates as “The workers’ bank: the bank of business.”
The Palestinian society as a whole has a highly distorted class structure — a compradore- capitalist class dependent on its privileged relationship with Israeli capital and a working class that has little strategic praxis in the national economic developmental struggle. As a consequence, the Palestinian economy is one that is destabilised with de-development (refer Sara Roy, The Gaza Strip: A Case of Economic De-Development). No doubt about the economic situation but that Israel has become a classic example of settler colonialism in contemporary times, as also a model picture of apartheid, (Prabhat Patnaik, 18/11/23).
Since Israel’s war against the Palestinian people today is the logical extension of this process, aimed at creating a Palestinian canton-state over the last ten years, Israel has progressively delinked itself from reliance on cheap Palestinian labour while strengthening the dependence of the Occupied Territories on the Israeli economy. The politico-economic resultant outcome is a Palestinian society with a highly distorted class structure — a capitalist class dependent on its privileged relationship with Israeli capital and a working class that has little strategic weight in the national struggle.
Still, the country is dependent on foreign aid, having received some $263bn between 1946 and 2023, to sustain a monopoly-capitalised economy emboldened to the Global North economies, (brookings 2016).
see alsoCongressional Research Service, “US Foreign Aid to Israel”, 2023.
Again, it needs to be acknowledged that foreign aid to Israel is unconditional – and 300 US legislators had even recently signed a letter demanding it remain so.
As human rights lawyer Zaha Hassan, told Al Jazeera: “When you’re sending $3.8bn per year, how can you say you don’t want to have any knowledge of how that money’s being spent? It becomes sort of a really ridiculous discussion because it becomes clear that any questioning of US assistance to Israel – any kind of tracking, tracing, monitoring or accountability – is going to be fought tooth and nail.”
In April, US Congresswoman Betty McCollum introduced a bill that aims to ensure the $3.8bn that the US gives to Israel every year is not used in rights abuses against Palestinian children, the destruction of Palestinian property, the removal of Palestinians from the occupied West Bank, or Israel’s attempts to further annex Palestinian land.
Aside the financial assistance, grants and preference economic loans, since 1983, the United States and Israel have met regularly via the Joint Political-Military Group (JPMG) to promote shared policies, address common threats and concerns, and identify new areas for security cooperation, inclusive of the Qualitative Military Edge (QME) program. The US and Israel have a longstanding Military “Partnership” as well as (Jerusalem Post) a “Signed” Military Agreement (classified) regarding Israel’s attack on Gaza. There is a much broader “signed” military-intelligence agreement (classified) with Israel which no doubt includes the extension of the Israeli-US bombing of Gaza to the broader Middle East, (M.Chossudovsky, Global Research, November 17, 2023).
Also, since 1992, the United States has provided Israel with $6.6 billion worth of equipment under the Excess Defense Articles program, including weapons, spare parts, weapons, and simulators; more military assistance, grants and military-resource deployments are documented HERE on a quasi-alliance agreement where Singapore models such US-security arrangements, too.
What’s the impact of the war on Gaza on the Palestinian economy?
A program from Al Jazeera, featuring an interview with Raja Khalidi, explores a question too often seldom asked:
The UN warns the war on Gaza could set back development in the Palestinian territories by as much as 16 years. The Palestinian territories are dependent on Israel for their labour and goods markets and for basic services like water and electricity.
They are locked in a cycle of underdevelopment caused by decades of Israeli restrictions and occupation. Palestinian GDP stood at just over $20bn last year. By comparison, Israel’s economy is worth nearly $500bn.
Therefore, to repeat, Israel is no modern state but a classic example of settler colonialism in contemporary statehood because it has all the elements in the model of an apartheid nation.
Lebanese authorities have scrambled to develop an emergency plan in case the conflict does spill over, though residents and local authorities say the cash-strapped nation is ill prepared, (France24); it’s scary, (al Jazeera).
These figures exclude how much the genocidal outreach has impacted upon Lebanon’s economy which is being affected by the cross-border spillovering incursions by Israeli armed forces in this conflict.
World Bank head Ajay Banga warned at a conference in Saudi Arabia this week that the war puts economic development at a “dangerous juncture ” that would be affecting further worsens the financial health and political stability of Egypt, Jordan and Lebanon and creates problems well beyond. The IMF (International Monetary Fund) gave a warning in a September report that they could lose their “sociopolitical stability.”
Imperialism in the age of globalisation (Patnaik and Patnaik), creates The Triad endowed with the colluding complexity of financialisation capitalism and integrated commodity suppIy chains can now link labour and resources from the Global South to the Global North. The system requires constant nurturing – and prolific violence to suppress – the costs of labour, resources, and non-monopoly-protected manufactures from the Global South, (RogerStoll, Resumen 20/11/23). It is also imperative that The Triad keep the vast majority of the world’s population from becoming affluent enough to compete for essential commodities to share common prosperity on One Earth’s economic wealth ecologically.
Today the U.S. is the prime enforcer of this system, with at least 800 military bases encircling the globe, (Vines, 2025).
III] MICGains
Former British diplomat Alistair Crooke has some fine words on Israel’s Moral Justifications in light of the Middle East Eyearticle exertingthat Israel’s claim of ‘self-defence’ has zero legal legitimacy. It comes about whether, one day presently, will the Scorpion Sting the U.S. Frog? It may dawn upon POTUS that Israeli operations against Hamas are not getting anywhere due to the Zionist state’s recalcitrant refusal to confront its guilt and shame or accept a two-state solution to the Palestine issue because it is regarded as currently unviable, (Haaretz)
Every year, the defense industry donates millions of dollars to the campaigns of members of Congress, creating pressure on the legislative branch to fund specific weapons systems, maintain an extremely high Pentagon budget, and add ever more military spending. This upwards pressure is a constant, no matter what figure is requested by the president for the Pentagon, even though nearly 50% of the current annual Pentagon budget already goes yearly to private contractors.
Members of the House and Senate Armed Services Committees are especially targeted by defense contractors. These committee members determine the amount of money authorized for the Pentagon when the committee marks up the annual Pentagon policy bill, the National Defense Authorization Act.
Owing to this exceptional position, the defense contractors pour money into the reelection campaigns of these members, creating a self-fulfilling feedback loop that many call the “military-industrial-Congressional complex.”
This year, the armed services committees voted to increase the Pentagon budget beyond the President’s $813 billion request for the Pentagon for the coming fiscal year, a $31 billion increase from the previous fiscal year, by an additional $37.5 billion in the House and $45 billion in the Senate.
The analysis in the report has shown that, in the current election cycle, the military-industrial complex gave $10.2 million to members of the House and Senate Armed Services Committee prior to their votes this June to increase overall defense spending for FY23; see Table 1 below.
The report relies on campaign finance data from OpenSecrets.org and includes contributions from defense sector employees and PACs to lawmakers’ reelection campaigns and leadership PACs.
Table 1. Defense sector contributions to Armed Services Committee members who voted to increase defense spending, 2022 election cycle.
The vast majority of these campaign contributions went to members who voted to increase the Pentagon budget above the president’s $813 billion recommendation. Specifically, House Armed Services Committee members who voted “yes” to increasing the FY23 Pentagon budget by $37.5 billion on June 22, 2022, received a total of $3 million from the defense industry in the 2022 election cycle. Senate Armed Services Committee members who voted “yes” to increasing the FY23 Pentagon budget by $45 billion on June 16, 2022, received a total of $7.2 million from the defense industry in the 2022 election cycle.
Notably, the average campaign contribution from the military-industrial complex to a member of the House or Senate Armed Services Committee who voted “yes” to increase military spending for FY23 is more than triple the average campaign contribution from the military-industrial complex to those who voted “no.” Those who voted “yes” received averagecontributions of $151,722. Those who voted “no” received average contributions of $42,967; see Table 2 below:
Table 2. Defense sector contributions to Senate and House Armed Services Committee members.
If the FY23 Pentagon budget ultimately enacted indeed reaches the amount approved by the Senate Armed Services Committee – an outcome that is likely given the trajectory of the budget in previous years – the defense contractors will have clinched a return on its $10 million investment of nearly 450,000%. The military-industrial complex maintains a potent political influence machine that extends far beyond campaign spending, and there’s no reason to doubt that the supporters of more Pentagon spending believe in what they are doing. But nor should anyone doubt that military-industrial complex campaign contributions both reward and encourage Congress to shovel money at the Pentagon – even as so many human needs and non-military security interests (like addressing pandemics or climate chaos) remain desperately underfunded.
Table 3. Defense sector contributions to House Armed Services Committee members who voted to increase defense spending, 2022 election cycle (campaign committee and leadership PAC contributions combined).
The top gainers:
The top 8 gainers:
And, these are the Republican and Democratic House Committees which gained the most from budgetary allocations:
In short, weapons makers and merchants of death have spent $2.5 billion on lobbying over the past two decades, employing, on average, over 700 lobbyists per year over the past five years. That is more than one for every member of the United States’ Congress.
EPILOGUE
The United States led the ranking of countries with highest military spending in 2022, with 877 billion U.S. dollars dedicated to the military. That constituted nearly 40 percent of the total military spending worldwide that year, which amounted to 2.2 trillion U.S. dollars.
Even this amount is nowadays regarded as highly under estimated, (monthlyreview, 01/11/2023); it could well be US$1.537 trillion! (or nearing three-quarters of global military expenditure).
The U.S. bases abroad cost American taxpayers an estimated $55 billion annually; each construction of military infrastructure abroad has cost taxpayers at least US$70B since 2000.
Since 1776, fighting for 228 of the last 245 years, the U.S. has only been at peace for 17 years. American colonists took up arms against Britain to win independence. Then, to expand territories when European settlers wipe out North America’s resistance of indigenous people in order to expand westward. Secondly, to dominate and control business without constraint because warfare is profitable to the American capital class. This include economic sanctions as proxy wars.
PROFITS of WAR
The U.S. war-machine manager Pentagon has spent over $14 trillion since the start of the war in Afghanistan, with one-third to one-half of the total going to military contractors alone.
Between 1995 and 2019, the National Consortium for the Study of Terrorism and Responses to Terrorism(START) calculated that 3,455 U.S. citizens were killed in terror attacks. In contrast, the Costs of War data has shown that the U.S. post-9/11 wars have directly killed over 929,000 people on planet Earth.
Yet, at the same time, between 2001 and 2021, the U.S. poured more than US$8 trillion into counterterrorism warfare.
The Pentagon war machinery is just one core element in an ever more expansive and expensive American warfare state. Together with other military, intelligence, and internal-security expenditures to the Pentagon’s endowment. The U.S. national security hegemonic imperialism budget equates a mind-boggling US$1.4 Trillion.
The military industrial complex and a plutocratic governance ruling class, (Kishore Mahbubani) encased in their narrow self-interests pursue warfare as profiteering merchants of death whilst indebting nations globally.
Entrapped by manufacturing processes and entrenched financial capital interests, these are The Dirty Dozen as merchants of death:
Firestorms 