What was Standard & Poor's smoking when it affirmed Israel's A + debt rating last week and termed its outlook Stable?

It admitted to inhaling some natural gas, revenues from which will start filling the country's coffers in the next few years, giving S&P reason to think the country's finances will be considerably strengthened. But it seems the real cause for its glowing report on Israel's finances was a few too many tokes on some nostalgia weed, the one that looks back on the good old times and just assumes they will continue.

After all, for years Israel has enjoyed an era of fiscal rectitude and relative peace that saw it through the worst global economic crisis of the postwar era. Why would anyone like the prime minister - the founder of fiscal rectitude to begin with - want to change anything?

Of course, S&P didn't quite speak in those terms; rather it played a more dangerous game of assuming that what was will be, despite the evidence mostly tilting to the contrary.

"While the government has been forced to revise its original budget deficit targets in light of revenue shortfalls, we believe the political consensus for containing public debt remains intact," S&P averred. "We could consider raising our ratings on Israel if it makes material progress in defusing external security risks, as such progress would have positive repercussions on domestic stability, economic growth, and investor confidence." What's wrong with this picture?

Isn't this the government that has been doing virtually nothing about the 2013 budget except delay? Isn't this the government that has been running huge deficits over the past year at a time when the economy is growing fairly strongly? Isn't this the government that seems to prefer early elections and all the policy uncertainty it entails? Isn't this the government that, far from putting out security flames, is fanning them with threats against Iran?