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Defrauding the public
By Haaretz Editorial
Tags: Benjamin Netanyahu 

Prime Minister Benjamin Netanyahu is thought to understand economics more than other politicians. He was not only a successful finance minister, but also an ideologue with a clear economic doctrine that he reiterated every chance he got. Netanyahu viewed the private sector as the economy's growth engine, and therefore supported lowering taxes to free up resources to increase private consumption. He supported decreasing the public sector ("the fat man") to reduce the government's share in the national pie in favor of the private sector ("the thin man").

Because of Netanyahu's image as an economic leader, his pronouncements were taken very seriously in this year's election campaign, which took place against the backdrop of the global recession. In December he said: "Because the economy is in a period of crisis in which it will be impossible to keep the budget deficit where it is, we should take advantage of this period to reduce taxes more quickly." Netanyahu scorned experts who proposed increasing government spending and raising taxes.

Those who believed in Netanyahu's promises were disappointed by his decisions when he became prime minister. He has ignored the principles he ran on, as well as his policies as finance minister that extricated the economy from the previous recession. He has thrown budgetary restraint to the wind by filling the cabinet with unnecessary ministers, and by forging agreements with Shas and United Torah Judaism to restore child allowances and finance ultra-Orthodox institutions. He also made a quick deal with the Labor Party to maintain the defense budget.
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Netanyahu knew that the extravagant spending he approved would have to be financed by raising taxes, so he surrendered his second economic principle. According to figures published by Zvi Zrahiya in TheMarker on Friday, the public's tax burden will rise by about NIS 10 billion a year, including increased VAT and taxes on fuel, cigarettes and health, and canceling the deduction for child-care expenses. The cutting of income tax and corporate tax as envisioned in the Economic Arrangements Bill has been put off for the coming years.

The prime minister certainly understands that the public will have to pay more for goods and basic services, and the poor will especially feel the crunch. Such denial of his basic positions and election promises - only to survive in power - defrauds the public.
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