US Economic Storm Clouds: What Israel Must Prepare For
As the American economy shows signs of deep internal strain and public fury, Israel faces a quiet but significant economic blow. The frustration of ordinary Americans is not just a domestic issue; it is translating into hostility toward Israel and threatening the strategic alliance that has long served as the Jewish state's international bulletproof vest. With the Iranian nuclear threat pushed to the sidelines of Washington's priorities, the Israeli economy could be left vulnerable and exposed without the traditional protection it has come to rely upon.
The Volatile Whims of the World's Largest Economy
The United States, the world's largest economy, currently appears to be driven by volatile political whims. Donald Trump is perceived as a capitalist businessman on one hand, yet on the other, he forces himself as a partner and takes percentages from private companies that received support, sowing panic among CEOs. This economic zigzag raises a critical question: who ultimately pays the price?
The possibility that the US government would demand percentages or shares in private companies in exchange for subsidies, tax benefits, or investments is not unfounded. While these steps raise concerns about the corruption of the system, it should be remembered that this is an industrial policy with historical precedent. In an era of vast economic disparities, the argument is gaining strength that the broader American public should also enjoy the fruits of stock market gains.
Wall Street vs. the Real Economic Reality
Bernie Sanders, the clear left-wing marker in US economic discourse, proposes a similar approach to resolving the artificial intelligence issue. Sanders contends that since AI systems are based on collective historical human knowledge, their profits should not be concentrated among a select few. He proposes transferring a significant chunk of shares in AI companies to the public, not the government, to prevent political exploitation. While these moves draw criticism from neoliberal elements claiming harm to free market principles, they may not be the most problematic aspect of Trump's policy.
Trump treats stock market gains as the sole measure of his success, but the reality is far more complex. A median home costs $434,100. Financing that with an interest rate of around 6.5% requires an income of $110,000 to $120,000 a year, far above the median income of approximately $87,500. This obsessive focus on Wall Street proves that the administration is detached from the real economy.
Ninety percent of stock market wealth is concentrated in the hands of the top decile. The general public holds few investments, leaving them outside the Wall Street celebration. The president's detachment from this reality explains why his approval ratings have dropped below those of George W. Bush. While citizens groan under economic burdens, his preoccupation with showcase projects like renovating the White House illustrates the gap from the ground far more than any dry statistic. Confidence indices are at historic lows reminiscent of the days following the 2008 crisis, and food prices have spiked and remained high. This is the true engine behind the public rage.
Soaring Deficits and Unchecked Corporate Spending
From January 2025 to August 2026, the national debt surged from $36.2 trillion to $39.8 trillion, while the real economy registered growth of just 1.5%. This gap raises an obvious question: where are these massive budgets flowing, and does the taxpaying public really enjoy this investment?
The problem with the deficit is not just the debt itself, but what the money is wasted on. It is not being directed toward education, public housing, or lowering the cost of living. The money is being sucked into two main pits:
- The healthcare system, where funding is often public but control lies in the hands of predatory private corporations, moving massive capital from the taxpayer's pocket to corporate coffers
- Defense, into which roughly $1.5 trillion is poured
When citizens suffocate from the cost of living on one hand, and understand that state coffers are being sucked upward to corporations, defense, and a small handful of elites on the other, you get a powder keg of public rage. When frustrated American citizens look for someone to blame for this economic robbery, where is that anger directed?
Economic Frustration Translates to Hostility Toward Israel
Of course toward the corporations, but not only them. This frustration often connects to the Israeli issue. Many Americans are convinced that their tax dollars fund universal health insurance in Israel. It is complete nonsense, but it shows how the two worlds collide. The economic frustration of the ordinary American translates into anger over aid to Israel, creating a direct pipeline to antisemitic tropes. When economic gaps widen and people are suffocated, they look for a scapegoat, and instead of blaming the corporations milking them, there are those who blame Jews. For the frustrated crowd, the Jeffrey Epstein affair encapsulates the entire story, confirming conspiracy theories about who really pulls the strings.
The Islamic Specter: A Vanished Shared Threat
In the past, the alliance between Israel and the US relied heavily on a shared threat of terrorism and radical Islam. Does the American public still share this existential fear of the Iranian axis with us? The gap is huge, and this threat has almost vanished from the American radar. Recent polls show that only about 2% of Americans place Islamic terrorism at the top of their priorities. America has changed; today there are strong Muslim communities and Muslim representatives in key positions in local and national politics.
When we talk to them about a danger from Iran, it simply does not scare them. The average American citizen asks themselves: What have the Iranians actually done to us directly in recent years? The classic Israeli argument that if we don't stop them here, terror will reach your homes no longer resonates. America's focus has shifted elsewhere entirely, both in domestic politics and foreign policy. The shared fear that once connected us has simply evaporated.
Israeli Policy and the Loss of Liberal Support
The disconnect and hostility are not an unavoidable fate of antisemitism. This is a direct result of Israeli policy. It started from the decision to identify Israel completely with Republicans and rely on the support of Evangelicals. These are conscious decisions that we made, and because of them we lost the support of large segments of the liberal camp. The message coming today from broad parts of Israeli society that it doesn't matter what we do, they will hate us anyway is simply a comfortable stance meant to shirk responsibility, and it is nonsense.
Mainstream America hates what it sees in Gaza, and hates the perception that Israel is warmongering. They even blame Israel for rising gas prices, because in their view Netanyahu is dragging Trump into escalation. This approach of I will do whatever I want because they hate me anyway is dangerous and destructive, because the reality is not like that at all.
The Bottom Line: Israel's Economic Exposure
The isolationist approach of America First, in which the administration sheds traditional global commitments, is reaching us too. Everyone talks about the fear of cuts to defense aid, and it is clear that would be a harsh blow to the budget. American military aid is about to shrink dramatically, creating a massive budget hole. But the damage does not stop there.
The real long-term danger is that if the US administration signals that America is no longer interested in the global order and largely removes the defense umbrella over Israel, the economic consequences could be dramatic. We currently have exceptional, unique free trade agreements with Europe that no country outside the bloc possesses, and they rely significantly on American backing. Once the US steps back, the Israeli economy is left completely exposed and vulnerable.
For Israel, the path forward requires strategic clarity and self-reliance. As the prophet Isaiah taught us, For the Lord God of Israel has promised: I will not forget you. Our resilience has carried us through millennia, and it will carry us through this challenge. But we must prepare, and we must take responsibility for our own destiny rather than relying on the shifting winds of American politics.
As the Talmud teaches, Ein somchin al hanes (we do not rely on miracles). Israel must strengthen its own economic foundations and strategic independence.