Subscribe to Print Edition | Fri., November 21, 2008 Cheshvan 23, 5769 | | Israel Time: 02:48 (EST+7)   Back to Homepage web haaretz.com Haaretz Toolbar Diplomacy Defense Jewish World Opinion National Print Edition Car Rental Books Haaretz Magazine Business Real Estate GA 2008 Travel Week's End Anglo File

Stimulus package / Even Houdini couldn't have pulled this off By Nehemia Shtrasler Even the great magician Houdini couldn't have pulled this one off. Not only did Roni Bar-On present a gargantuan NIS 21.7 billion plan - he did it without increasing the budget by one shekel. Not one. How did he do it? Sleight of hand? Illusion? First of all, he put together all the brilliant minds at the Budget Department at the Finance Ministry. They labored and slaved for weeks, harnessing their greatest powers of invention in order to sate the lion while leaving the lamb alive and kicking. Meaning, they had to give the politicians demanding that "something be done" their pound of flesh, while on the other hand, they didn't want to increase the government's targeted deficit for the year 2009, which is already large and dangerous enough. Advertisement The Budget Department people pulled off the trick with the help of several gambits. 1. That amount, "NIS 21.7 billion," isn't the right amount. Most of the projects in question were already incorporated in the 2009 budget. The actual increase is about NIS 4 billion, maybe NIS 5 billion, which is another (and much more reasonable) story entirely. 2. Part of the amount is merely fleshing out "under-execution" of the 2009 budget, which hasn't passed the Knesset yet, not is it likely to. 3. Another part consists of "permits to charge," which means, carry out works today, pay tomorrow, without any actual expenditure in 2009. 4. Part is based on spending by government companies such as the Airports Authority and Israel Electric Corporation, which isn't in the budget anyway, but Bar-On counted in his economic Stimulus plan. 5. And one more trick: Bar-On is using the NIS 1.5 billion reserve for coalition agreements. That action diminishes the room parties have to extort the government when negotiating to join the coalition. The bottom line is that the NIS 245 billion budget for 2009 stays NIS 245 billion. No increase in spending even though Bar-On himself said yesterday that his plan is "unprecedented in scope." Actually, it's a small plan that won't pull the economy out of the big hole. It won't reverse our track from down to up. It doesn't even address the acute problem of the credit crunch weighing on the business sector. Bar-On's plan is a political one intended to gag critics. That won't happen. But the plan does have two important upsides. One is that it didn't breach the 2009 budget despite populist efforts by Knesset Finance Committee chairman Avishay Braverman and Histadrut labor federation leader Ofer Eini to do that very thing. And it also sustains the important process of tax cuts. What should have been done, though? Taxes should have been brought down much more. Corporate tax, today 27%, should have been lowered to 20%, while marginal income tax should have been cut from 47% to 40%, while spreading the tax brackets for the middle class wider. Those would be steps that stimulate economic activity. Those would be steps that prevent job losses. Those would be steps that increase tax revenues. The 2009 budget priorities should have been completely changed, turning it into an emergency budget that supports growth. More should have been allocated to roads, to water and sewage systems, to telecommunications, to research and development, to professional training, and to a platform to grant credit. This should have been financed by slashing the Defense Ministry budget, reducing the Education Ministry's excessive overhead. Allowances and public-sector wages should have been frozen. But no such great program was presented yesterday. The crisis evidently isn't grave enough. The treasury will now try to push through its little plan, and that will be hard enough in our political jungle, where each is a law unto himself, running alone in the primaries, and happy to gobble up Little Red Riding Hood, Granny and anybody else in his way. Bookmark to del.icio.us   The King is dead Archeologists find new evidence for King Herod's tomb site. Al-Hasbara Israel launches Arabic YouTube channel to bypass Arab media.

Read & React Israel to boycott 'Durban II' anti-racism conference Responses: 154 Latest poll gives Likud big edge over Kadima Responses: 84 Peres: Evacuation of settlements may lead to civil war Responses: 69 IAEA: Syria site bombed by Israel bore features of nuclear reactor Responses: 101 Defense Min. turns blind eye as Israelis sell arms to enemies Responses: 28 More Headlines 00:10 Hebron settler mob caught on video clashing with IDF troops 23:25 Experts argue: How close is Iran to its first nuclear weapon? 23:41 Livni vows Kadima won't 'sell' Israel to the ultra-Orthodox 20:42 IDF troops foil attempted stabbing attack near Nablus 23:57 Arise Sir Shimon: Peres receives honorary knighthood from Britain's Queen 19:18 Qassam hits Negev as Ashkelon residents protest Gaza rockets 20:52 Record Number of Jews slated for next U.S. Congress 02:43 Restoration of Lebanon synagogue in danger despite rare Hezbollah support 18:49 Barak: West must unite with Russia, China against Iran 22:02 Hezbollah to Iraqi lawmakers: Reject 'damaging' U.S. pact 23:52 Tel Aviv stocks suffer sharp losses; TA-25 sheds 4.9 percent 22:38 Revealed: Police used mole to probe sex for favors case at gov't ministry 17:17 Nobel laureate Maguire: UN should suspend Israel membership 21:01 Michael Jackson to testify over Bahraini sheik's $7m lawsuit 23:08 IDF envisions army of animal robots for rescue missions, military ops Previous Editions Select Day 20 nov 19 nov 18 nov 17 nov 16 nov 14 nov 13 nov 12 nov 11 nov 10 nov 09 nov 07 nov

Special Offers Advertisement Living in Israel Studying in English Click & Meet our students from all around the world Dan Boutique Jerusalem New Dan Hotel in Jerusalem Young, Fun & Distinctively Dan Book Now Online! Fattal Hotel Chain Perfectly located hotels on best resorts of Israel. Car rental in Israel Shlomo Sixt Receive $15.00 from our low rates. Dial 013 for your long-distance calls and get all your money back US CITIZENS Vote for real change. Request your ballot today! Eldan Rent a Car Israel's leading car rental company offers you a 20% discount on all online reservations Jewish Singles Personal Ads Find the love of your life on JDate.com Israel's Premier Real Estate Website www. israel-property.com Hebrew Summer courses From $39.95 Junkyard Junk a car - get free towing nationwide and a tax-deductible receipt

Home | TV | Print Edition | Diplomacy | Opinion | Arts & Leisure | Sports | Jewish World | Underground | Site rules |

Real Estate in Israel | Travel to Israel with Haaretz | Hotels Israel | Restaurants Israel | Tourist attractions Israel | Shops Israel

birthright Israel | Search engine marketing

Haaretz.com, the online edition of Haaretz Newspaper in Israel, offers real-time breaking news, opinions and analysis from Israel and the Middle East. Haaretz.com provides extensive and in-depth coverage of Israel, the Jewish World and the Middle East, including defense, diplomacy, the Arab-Israeli conflict, the peace process, Israeli politics, Jerusalem affairs, international relations, Iran, Iraq, Syria, Lebanon, the Palestinian Authority, the West Bank and the Gaza Strip, the Israeli business world and Jewish life in Israel and the Diaspora.

© Copyright  Haaretz. All rights reserved