A specter is haunting the Israeli free market: How should the government respond to declining tax revenues and rising unemployment? It is not a simple math problem, but rather an issue that affects people's lives. All the options are difficult, but only a few of them will also help protect the fabric, humanity and morality of Israeli society.
Bank of Israel governor Stanley Fischer has opted for the go-for-broke approach that worked in the U.S. during the Great Depression: Massive government investment in infrastructure aimed at jump-starting the economy. Although one can question whether an economic panacea that worked 70 years ago will work in the 21st century, it is clear that such a measure will help reduce unemployment and prevent a moral collapse of society.
However, some prefer an ostensibly easier solution: Last week TheMarker revealed that the treasury has put forward a shocking proposal that would target specific parts of the economy. In its sights is the soft underbelly of Israeli society, including physicians and educators.
No doubt, we shall regret harming these vital professions long after prosperity returns. Schoolteachers, university lecturers and physicians make a decent living, no more. Those who choose to pursue these professions rather than the private sector are idealists who seek to educate future generations, to heal the sick and to improve society as a whole.
Cutbacks will sentence them to the same fate as other important and doomed sectors of society. Dozens of state-employed psychologists will soon be dismissed, along with art teachers and driving instructors, whose professions the Ministry of Education has deemed nonessential.
It's more than a mere mathematical equation. It's a question of what Israeli society decides is important. Obviously, the deep recession demands serious cutbacks. But is instruction in schools a luxury? Is higher education "fat" in the budget? Is adequate medical care something that can be pared to the bone and even beyond?
Idealists or not, doctors will soon find jobs in the private sector or abroad. Lecturers, especially those in practical fields, will find similar solutions. Good teachers will offer their services on the "gray market" - where parents fund teaching hours outside the school's budget - or focus on private tutoring.
The long-term harm is plain to see. Less education means less development once the economy stabilizes. Less health care means the disadvantaged will have to pay huge costs for years to come.
Then there's the short-term damage: Students whose parents are unemployed or in financial distress will not get assistance from the shrunken welfare system. Who will help expand their horizons? Certainly not the art teachers, who'll all be sacked by then.
The ease with which we are willing to sacrifice the salaries of the superficially comfortable academics conceals the significance of the act. College and university teachers will continue to give and to receive the services needed to advance in life. But those at the bottom of the socioeconomic ladder will remain defenseless. Their education and health will decline. When prosperity returns, we will learn that cutthroat capitalism cuts even deeper in a recession.
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