Both the dopes who want everyone to be drafted into the army, and the supporters of the social-justice protest movement, who oppose the government's economic measures, planned a big demonstration in Tel Aviv on Saturday night. But behind the scenes, they're squabbling over what's more important: equality in sharing the military burden or the economic burden.

The thing is, they think these are two separate issues but they're really one. When the ultra-Orthodox don't serve in the army and don't work, they put an unbearable burden on the secular majority that has to serve more years in the army and pay more taxes to cover the costs of the yeshivas and their students.

But there's more to it. Behind the two struggles stands one key element that neither camp likes to talk about because it's not politically correct. It's the correlation between peace and our economic situation.

For three and a half years, Benjamin Netanyahu's government has refused to talk with the Palestinians. It has adopted three nos - no to negotiations, no to compromise and no to agreements.

In March 2002, ten years ago, 22 Arab countries presented the Arab Peace Initiative. They proposed a comprehensive peace with Israel including the normalization of relations and a just and agreed-on solution to the refugee problem. In return, there would be a withdrawal to the 1967 borders - and later a formula for land swaps was included. But because of its great fear, the Israeli government chose to ignore the proposal, which is still sitting embarrassingly on the shelf.

In effect, it rejected it. In this way, we turned from a peace-seeking nation into a peace-fleeing nation - a nation that considers every proposal for negotiations a threat that must be shaken off.

This policy has a tremendous economic price, not merely in the size of the defense budget and the need to constantly cut civilian programs to pay the Moloch, but for the overt and covert boycotts of us by organizations and companies throughout the world. More and more international companies don't want to invest here because of the "Israel risk." This harms growth and employment and forces us to make cuts and impose more taxes.

But since it's obvious that none of this will change tomorrow, we have to tread water and deal with what there is - the plan for taxes and cuts that was announced last week. No one is arguing over whether the present government is to blame for the crisis. In the past two years, it wasted money without caring and now it's time to pay up.

It's true we could have executed a better economic program. We could have combed the state budget and found all the duplications, waste and unnecessary spending, including in the army, the settlements and the Haredi community, before taxes were increased and growth and employment were hampered.

In addition, the tax exemptions for people with connections should have been canceled, like the tax exemption for the keren hishtalmut continuing education funds, the ridiculous (6 percent ) tax paid by large exporters like Teva, Iscar, Intel and Check Point, and the exemption from value added tax on fruit and vegetables, tourist services and Eilat.

But since I know we have a weak government and a prime minister who gives in to pressure and isn't willing to fight against the Histadrut labor federation, the large workers' committees, the giant conglomerates, the agriculture lobby and others with vested interests, we have no choice but to support the cuts and tax measures that reached the Knesset last week.

We cannot continue with a populist opposition campaign. MKs have to put the primaries to the side and overcome their natural desire to star in the media. Just last week, the rating agency Fitch warned that Israel's credit rating could be downgraded if the plan is not accepted verbatim.

That's exactly what happened in Spain. Parliament refused to approve any of the government's proposals for cuts and taxes. The result was a bad crisis and economic collapse. We don't want to be Spain.