Well you can blame terrorism for that. There is not one country in the world, save for America, that would rather spend money on armaments than social aid. Do you really think Israel wanted to build separation fences and walls because of any other reason than to protect themselves from terror attacks. the spiritual doom that you talk about comes from Arab society. even in this article look at the over representation of Arab youth kicked out of their societies. Get a grip on yourself and stop blaming the victim for efforts Israel uses to protect itself.
High Court: Illegal West Bank homes to be demolished (Haaretz)
from the article: The midnight cowboys of Tel Aviv