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1. Kobi Haber

He knows all the tricks. Kobi Haber, the Budget director at the Finance Ministry, reached his lofty, powerful position at the top of the Budget department, after having been in charge of the defense budget. He knows the open and hidden sections of the defense budget better than anybody else. He knows all about the waste, the pork, the disgusting dissipation, the megalomaniac projects of no use to anybody, and the outrageous and unsustainable employment terms.

Haber knows the power of the lobby of generals, and all the methods the defense system wields against anybody who dreams of imposing efficiency upon it.

But Haber is a nice guy, a man of compromises, and the finance minister above him is a weakling. The prime minister is totally occupied with his own survival and nobody means to arise and warn the public about the brewing scandal: of how the defense budget is being inflated out of proportion, about how the efficiency reforms in the army have ground to a halt.

The defense budget in 2007 will be the highest in Israeli history: more than NIS 50 billion. The official excuse is that the army needs the budgets on a one-time basis, to replenish inventories exhausted in the second Lebanon war.

Just ask Yossi

But ask Yossi Strauss, the Finance Ministry auditor sent to the Defense Ministry two years ago, to supervise the defense budget. Ask him if he, and his colleagues in the budget department, really understand where the taxpayer moneies are going, when it comes to the defense budget.

Yossi won't answer, of course: it's all top-secret, and the last thing he needs is to trip up the junta of generals controlling the defense budget.

The bloated defense budgets for 2007 and 2008, while about it, are the biggest macroeconomic disgrace in years.

The combination of a prime minister fighting for his life and a Defense minister who is sadly misplaced has freed the military to ram its well-oiled hand even deeper into your pocket.

The boom in financial markets here and abroad this year, and giant deals such as the sale of Iscar to Warren Buffett for $4 billion, created a convenient background for Defense to raise the stakes. Superficially, one might think the economy can handle the gargantuan sum that Defense demands. But the bill will come due one day.

The jump in tax revenue this year created a rare opportunity to dramatically reduce Israel's national debt. But did our leaders learn from past mistakes? No, they are repeating a mistake dating from 2000, the last year in which Israel had surplus revenue.

After 2000 came the black years of 2001 and 2002, and the weakness of the Israeli economy with its mountainous public debt was exposed in all its nakedness. And the government and Bank of Israel stood helplessly by as economic activity imploded and financial meltdown loomed.

Last week the Bank of Israel wrote, in its macroeconomic review, that increasing the defense budget could reduce economic growth next year by 3% to 4%.

One might think that any action cutting even 1% from economic growth would trigger lively debate. But not here, no. Bank of Israel governor Stanley Fischer is not the man to wave a red flag: he's busy with the internal squabbles at the central bank.

Our leaders seem determined to miss the opportunity created in the last two years to cut Israel's debt, slash flab from the public sector, and route more resources to the needy. Or as the IMF put it, Israel's economic management is opportunistic. (Just like the people shaping it.)

2. Boaz Okon

If you're say 40 or 50, try this. Phone your insurance company or pension fund, and ask how much you've accrued to date.

If your rights are more than a million dollars, email us at guy.rolnik@themarker.com, and if it's more than $2 million, call and we'll come to you.

Yet I doubt I'll get many emails of calls, because the number of salaried workers who've built up sums like that is miniscule.

Now cast your mind onto a clever lawyer named Boaz Okon, until recently the manager of the courts. Last week TheMarker reporter Anat Roeh reported that Okon is entitled to NIS 27,000 a month in pension, for the rest of his life, from the age of 48.

Assuming the average lifespan for a man, his pension will cost us taxpayers between NIS 6 million to NIS 9 million.

OK, he was a civil servant  all his professional life and this is his reward, you say. In the private sector he'd have earned more than the NIS 44,000 a month he got in his last job, you say.

But Okon had only been in the public sector for ten years. Before that he was a lawyer at the law firm of S. Horowitz, and he retires with a good 20 years of work before him in the private sector.

This is not a story about Okon, who got what the law said he should get. It is a story about the law, about the system, about the politicians and paper-pushers who shape the system.

Annoyed? Wait till your insurance company tells you how much you have accrued. If you feel sick by now, stop reading. Stop. Because this is about to get worse.

Okon is a special case in the legal system, but in the defense establishment, there are hundreds and thousands of people who get the same or better terms, at ages younger than 50.

As a top lawyer, Okon can claim that in the private world, he'd have earned much more. But in the defense system there are thousands upon thousands of people doing purely civilian jobs, from potato peeling to printing pay slips, to fixing uniforms, who get profligate wage and pension arrangements at double, triple and quadruple the terms available in the private sector.

But the taxpayers do not arise. They do not bellow their outrage. They get up in the morning and go to work.