The High Cost of Free: Why Ending US Aid is Israel’s Strategic Win and America’s Loss

January 10, 2026

by Avi Drori                                        

Prime Minister Benjamin Netanyahu recently dropped a geopolitical bombshell in an interview with The Economist, declaring his intention to taper US military aid to Israel to zero over the next decade. While framed as a move toward "independence," this declaration is also a calculated political maneuver designed to silence a growing chorus of detractors in the American Right. Influential pundits like Tucker Carlson have increasingly argued that Israel is a "burden" on the American taxpayer—a charity case that offers nothing in return.

This narrative, however, is fundamentally flawed. It ignores the "rational school" of thought which has long understood that the $3.8 billion annual aid package is not a gift, but a strategic bargain for the United States. By ending this arrangement, Israel stands to gain sovereignty and economic power, while the United States risks losing its most cost-effective "aircraft carrier" in the Middle East, along with billions in guaranteed domestic revenue.

The Myth of Charity vs. The Rational Reality

To understand why ending aid is a loss for Washington, one must first understand what the aid actually is. It is not a blank check handed to Israel; it is effectively a coupon that must be redeemed within the US military-industrial complex.

The "rational argument" for aid has always been clear: Israel functions as a forward operating base for US interests. Former Secretary of State Alexander Haig famously described Israel as "the largest American aircraft carrier in the world that cannot be sunk," carrying no American soldiers and costing a fraction of what a real carrier group costs to build and maintain.

Furthermore, the Return on Investment (ROI) regarding intelligence and R&D is astronomical. General George Keegan, a former chief of US Air Force Intelligence, once estimated that the intelligence Israel shares with the US is worth the equivalent of "five CIAs." By cutting the financial cord, the US loses the leverage that ensures this flow of information continues "pro bono."

What "Zero Aid" Means for Israel: Unshackled Independence

For Israel, the removal of US funding is less about losing money and more about gaining freedom.

• Military Sovereignty: Currently, US aid comes with strings attached. It creates a dependency on American supply chains and, by extension, American political whims. By self-funding its military, Israel inoculates itself against diplomatic pressure. If a future US administration threatens to withhold shipments to force a ceasefire or a policy change, Israel can simply point to its own diversified supply lines.

• Industrial Liberation: The current Memorandum of Understanding (MOU) requires Israel to spend the vast majority of aid funds on US-made weapons, effectively outsourcing Israeli defense jobs to states like Alabama and Texas. Ending this requirement means those billions will stay in Israel, fueling a domestic renaissance in defense manufacturing.

• Export Freedom: Perhaps most critical is the freedom to sell. When the US funds a system, it often holds a veto over who Israel can sell it to. Without US taxpayer money involved, Israel becomes a fully independent competitor in the global arms market, free to sell its battle-proven technology to Europe, Asia, and South America without seeking Washington’s permission.

The Cost to the United States

The irony of the "America First" argument against aid is that ending it will hurt the American economy.

• Loss of Jobs: The $3.8 billion in "aid" is actually a subsidy for US defense contractors like Lockheed Martin and Raytheon. When Israel stops taking this money, it stops being forced to buy from them. The US defense sector will face a direct loss of guaranteed revenue, threatening thousands of American manufacturing jobs.

• The End of the "Quid Pro Quo": Currently, the US enjoys access to Israeli military technology (such as the Iron Dome, Trophy active protection system, and arrow missile defense) largely because it helps fund them. In a post-aid relationship, the US becomes just another customer. If the US Army wants Israeli tech, it will have to pay full market price, likely exceeding the cost of the original aid.

• Loss of Operational Data: There is no testing ground like the battlefield. The US military benefits immensely from real-time data on how American weapons perform in Israeli wars. Without the leverage of aid, this data sharing becomes a transaction, not an obligation.

Conclusion

Netanyahu’s declaration is a masterstroke that solves two problems at once: it placates the isolationist wing of the Republican party and matures Israel’s economy into a self-reliant powerhouse.

However, for the United States, this is a strategic divorce. By saving $3.8 billion a year, the US surrenders its leverage over a key regional ally, creates a new competitor in the global arms market, and hurts its own defense industry. The "burden" was never a burden; it was a subscription fee to the world’s most advanced military laboratory—and America just cancelled its subscription.