The self-destruct mechanism has been activated. It is now ticking away at full speed under the floor of Israel's economy and society. Not a day passes without bad news about another capitulation by the Knesset or another concession by the prime minister, whose entire goal is survival.

The government decided this week to exempt seven state housing companies from having to use tenders offered by the Housing and Construction Ministry. That opens the door wide to governmental corruption, in which work will be contracted out at exaggerated prices, without a tender, to government companies primarily headed by political activists. The proposal was made by Housing Minister Meir Sheetrit and Prime Minister Ehud Olmert. It will be implemented in practice by Prime Minister's Office Director General Ra'anan Dinur. Only three righteous people could be found in the governmental Sodom: Tzipi Livni, Avigdor Lieberman and Daniel Friedmann, all of whom voted against this terrible decision. One can only hope that Accountant General Yaron Zelekha will simply refuse to authorize the exemption until the government comes to its senses and returns to the high road.

Meanwhile, the judges, who are supposed to stand for justice and integrity, understood that they are dealing with a weak, frightened government and began to press for a back-door restoration of their budgetary pensions, which departed from this world in 1999. They are proposing a maneuver that stinks to high heaven, under which they would be able to retire at the age of 60, and the state would finance an "interim pension" for them until 70. Why? Because they are above the nation.

The next day, it emerged that a committee headed by Dinur has decided to destroy the Wisconsin Plan. The panel capitulated to pressure from Industry Minister Eli Yishai and decided to exempt new immigrants and anyone over the age of 45 from having to participate in the welfare-to-work program. These elderly citizens, 45 and up, will now be handled by the Government Employment Service, even though it is known that this service has never succeeded - and will not succeed - in finding them work.

And if all this were not enough, the prime minister (who is also finance minister) is trying to circumvent the rules of proper administration and sign a special wage agreement with the Bank of Israel governor that would give extraordinarily high salaries to 70 senior officials, comprising one-fifth of the central bank's professional staff. The only thing that is keeping Olmert from this new capitulation is fear of a petition to the High Court of Justice by the country's mayors, who would certainly be supported by Attorney General Menachem Mazuz. After all, many senior officials in the local authorities have been forced in recent years to return NIS 1 billion (!) in excess wage payments to the treasury. Why are similar refunds not being demanded with regard to the astronomical excess wage payments at the Bank of Israel?

To all this must be added a crumbling coalition, which is not managing to block expensive private member's bills in the Knesset, and negotiations over a new public-sector wage agreement. The Histadrut is demanding a 10 percent raise for the 700,000 public-sector workers, while treasury officials say there is no reason for any raise, since public-sector workers have already received raises of 1.5 percent a year over the past few years due to seniority payments and grade rises.

All of these problems are now converging on the 2008 budget, which will soon be brought to the cabinet for approval. Everyone knows that in order to keep the economy growing, a deep budget cut is needed. But everyone also recognizes the government's weakness and is trying to bite off another chunk of the pie for their own benefit.

It is possible to be nice to everyone: to exempt government companies from the tender requirement, give the judges excessive benefits, destroy the Wisconsin Plan, decide on eye-popping salaries at the Bank of Israel, pass private member's bills in the Knesset, and give raises to all public-sector workers. The only problem is that the self-destruct mechanism, which has already been armed and is ticking away, will then accelerate its march toward the inevitable explosion - which will liquidate growth, increase unemployment and send us backward into another economic crisis. It seems that we are incapable of enjoying long-term economic success.