Loan guarantees are not grants; rather the United States is merely co-signing loans for Israel in the event that Israel were to default. This results in better terms on the loans for Israel, but has come at a price. Israel sends most of the money directly back into the US economy. Additionally, a condition of the guarantees is that the money may not be spent on development in any of the areas Israel liberated in the 1967 Six Day War, meaning Judea, Samaria, and half of Jerusalem. In addition, whatever amount of government funds Israel decides to spend in those areas is deducted from the guarantees.
So far, Israel has used US $4.6 billion of the US $9 billion in US loan guarantees, which were first extended until 2008 and now until 2011. The Act benefits the United States as well, doubling the funds allotted to the existing program whereby America stores arms and equipment in classified US facilities in Israel, called War Reserve Stockpiles (WRS). A WRS is a collection of war materials held in reserve in pre-positioned storage to be used, if needed, in wartime. America maintains war reserve stocks around the world–mainly in NATO countries, but in some major non-NATO allies as well. The bill still requires the signature of US President George W. Bush. This is not expected to be a problem, as the move was initiated by his administration.
(By Arutz Sheva, IsraelNationalNews.com, December 13, 2006)
• Praise God for this strategic and timely move to enhance Israel’s security. Yet, pray that Israel will not trust in man’s provision, but in God’s. • “And Asa cried out to the LORD his God, and said, ‘LORD, it is nothing for You to help, whether with many or with those who have no power; help us, O LORD our God, for we rest on You, and in Your name we go against this multitude. O LORD, You are our God; do not let man prevail against You!.” (2 Chronicles 14:11)
[Reported by: Bridges for Peace]