*Contrary to conventional wisdom, US-Israel relations do not constitute a one-way-street, but a mutually-beneficial two-way-street. Israel is not a beneficiary of foreign aid, but a game-changing ally of the US, benefiting from an annual US investment, which has transformed Israel into a unique force and dollar multiplier for the US defense and aerospace industries and Armed Forces, as well as for the US Treasury (as documented below). Thus, Israel saves the US many years of research and development (mega-billion dollars), enhances the global competitiveness of US defense products, bolsters the global leadership of the US’ defense and commercial technologies, expands US export and the US’ employment base, increases US income tax revenues, and bolsters the US national security.
*Israel was the first country (in 2018) to use the Lockheed-Martin F-35 combat aircraft operationally. In fact, Israel has been a game-changing, battle tested laboratory and the research and development center for Lockheed-Martin, as it has been for dozens of US defense industries, which supply Israel with highly-appreciated advanced military systems. Israel’s Air Force, jointly with Lockheed-Martin, overcame critical technical (software) and mechanical (hardware) glitches – which almost doomed the program – transforming the F-35 from a high-risk venture into a mega-billion-dollar bonanza for the US taxpayers and US national security.
*The uniquely intense Israeli experience in multiple combat theatres and over many thousands of hours – including long range precision strikes – has upgraded and highlighted the F-35’s combat effectiveness. It has dramatically enhanced the F-35’s reliability, maintainability, electronic warfare, weapons integration, countermeasures and overall survivability.
*The Israeli experience has showcased and underscored the US advantage over the Chinese, Russian, British and French competition; thus, playing a key role in the substantial increase in F-35 exports since 2018,and especially during the last two years.
*Over 1,200 F-35 combat aircraft have been exported since 2018 to Britain, Canada, Australia, South Korea, Japan, Germany, Italy, the Netherlands, Belgium, Denmark, Norway, Poland, Romania, Greece and the Czech Republic. In late 2025, Lockheed-Martin reported a $173bn–$179bn backlog of its F-35, with Britain, Italy and Australia expanding their fleets.
*The F-35 production ramped from 91 units in 2018 to higher rates annually thereafter. The export of over 1,000 F-35s is planned through 2035. The export growth has been driven by multiple factors, including the Russia-Ukraine war and Indo-Pacific concerns, as well as the Israeli validation of the effectiveness and superiority of the F-35.
*According to Lockheed Martin, the F-35 program generates approximately$72bn in annual U.S. economic output ($40bn is export-driven), supporting 290,000 jobs and resulting in significant tax revenues through personal and corporate income taxes. The F-35’s US workforce has grown 35% since 2019.
According to Lockheed-Martin, the cumulative economic impact of the F-35 program is projected to exceed $1 trillion over the program’s life, generating anticipated annual federal, state and local tax contribution, factored into state and local fiscal benefits, of $10-15 billion.
Assuming that only 50% of the export was induced by Israel’s game-changing use of the F-35 in combat, then $20bn of the annual economic output is Israel-related, generating two forms of taxes. The first is $4bn in taxable income, predicated on 20% pre-tax profit margins, which when taxed at 30% federal and state tax rates yields $1.2bn to Treasury taxes, attributed to the Israeli battle tested laboratory. The second is employment income, that could be estimated at $10bn, which would yield $2bn of employment-related taxes. Thus, F-35-driven taxes amount to roughly the scope of the annual investment in Israel ($3.8bn),which is misperceived as foreign aid. The F-35 is one of dozens of US-made military systems employed, and enhanced, by Israel, benefiting the US’ economy and defense.
*The magnitude of the Israeli contribution to the US economy and defense is highlighted by the fact that the Israeli battle-tested-laboratory has, also, bolstered the battle-performance, export, employment and the tax-derivatives of Lockheed-Martin’s F-16 and Black Hawk helicopters, Boeing’s F-15 and Apache helicopters, as well as dozens of additional military systems, ammunition and military vehicles, manufactured by the US defense and aerospace industries, which employ about 2.5 million people.
*The aforementioned facts highlight Israel’s role as a unique game-changing, dollar and force-multiplier ally, which bolsters the US national security and the US Treasury’s tax revenues. In addition, Israel serves as a leading innovation center for the US commercial high tech sector (250 US high tech giants maintain research and development centers in Israel). Israel is a battle-tested laboratory for the US Armed Forces (formulating battle tactics on the basis of Israeli battle experience), saving the defense and aerospace industries mega-billion of dollars in research and development, a show-room demonstrating the superiority of US military systems over global competition, a ground-breaking source of intelligence (equal to 5 CIAs according to a former Chief of the US Air Force Intelligence), and the largest US military base with no need for US soldiers.
This article was published at The Ettinger Report
The views expressed in guest columns are not necessarily the views or positions of the CCNS or its members.
