The article argues that the Federal Reserve's recent rate hike decision, while justifiable on inflation grounds, highlights a critical lack of an underlying, transparent policy framework. The core problem is that the Fed's decisions appear discretionary, leading to market uncertainty because the committee's judgment, rather than clear data, dictates policy shifts. The author proposes that the Fed adopt a formal monetary policy rule—an algebraic formula linking the target rate to indicators like inflation and unemployment—to replace subjective guidance. Implementing such a rule would provide market predictability, enhance transparency, and shield the Fed from political attacks by making deviations from the standard easily quantifiable.
Reducing US Military Aid to Israel: Economic Feasibility Versus Strategic Cost
English Summary
INSS argues that Israel can economically absorb a gradual reduction in direct U.S. military aid, but the strategic and political value of the aid framework remains significant. It notes that aid now equals only about 0.5% of Israel’s GDP yet still funds roughly 15% of the defense budget, while stricter aid terms increasingly route spending to U.S. procurement and reduce direct support for Israeli industry. The paper also stresses that aid functions as a strategic anchor for U.S.-Israel ties and access to advanced U.S. systems, even as bipartisan support in the United States has weakened and aid has become more politically contested. It recommends replacing the current model with a formal transition toward defense-industrial partnership, avoiding full dollar-for-dollar budget replacement, and using the shift to drive efficiency, prioritization, and domestic capability building.
中文摘要
INSS 主張，以色列在經濟上可承受美國直接軍事援助逐步縮減，但該援助架構的戰略與政治價值仍然重大。報告指出，援助金額目前僅約占以色列 GDP 的 0.5%，卻仍支應約 15% 的國防預算；同時，日益嚴格的援助條款正使支出更多流向美國採購，並降低對以色列本土產業的直接支持。論文亦強調，援助是美以關係與取得美國先進系統的戰略錨點；然而，美國兩黨支持度已走弱，援助議題也更具政治爭議。報告建議，以正式的防務工業夥伴關係轉型取代現行模式，避免以完全「一美元對一美元」方式補足預算缺口，並藉此推動效率提升、資源優先排序與國內能力建構。
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