Hi Nick, what most Americans do not realize is that the biggest defense subsidies go to the allies in which the US places troops--today that would be Germany, Turkey, Japan, and Korea. It is much more expensive to keep troops on foreign territory than it is to subsidize weapons. That said, the bigger question is should the US provide security assistance around the world. If the answer is yes, than Israel is a bargain, if the answer is no, you can make much bigger savings elsewhere.
from the article: U.S. allocates $205 million for Israel's Iron Dome anti-rocket system