The people are stupid
The big question is whether the election economy, which has already been launched, will blind the people. Will Netanyahu and Steinitz pull the wool over our eyes?
By now it's clear that the next elections won't take place when they're supposed to. They'll be brought forward to the beginning of 2013, to February or March. This means we're already in an election year, and from the prime minister's point of view, everything is allowed in order to remain in power.
The sad result is that Benjamin Netanyahu and Finance Minister Yuval Steinitz are going to ply us with election bribery in the coming months. They think we're idiots they can sell colored beads to as if they were expensive diamonds.
Officials in the Finance Ministry's budgets division are acting as if it's business as usual. They're working on the 2013 budget even though there's no chance the prime minister will accept the proposal. It includes cutbacks amounting to many billions of shekels. But Netanyahu wants to be "good." He wants to be "social." He wants people to love him and vote for him. So if we have to break all the rules of proper administration, we will.
Only after the elections, when a new government is set up, will the other shoe drop. There will be deep cuts in everything that moves - from child allowances to free education from age 3 to the defense budget, and they'll impose VAT on fruit and vegetables. All the little beads will melt; only the huge damage wrought by an election economy will remain.
But this chopping and changing (first they give, then they cut ) is avoidable. It's not a law of nature. Had Steinitz and Netanyahu stuck to a responsible policy over the past three years, they would have been able to greet 2013 with their heads held high. But they chose a different path. They chose to hand out checks without enough money in the bank, and this kind of check bounces.
Already when they presented their budget for 2009 to 2010, they made their first mistake by submitting a two-year budget with an excessive spending increase. We also got Israel's largest cabinet ever - 30 ministers and nine deputy ministers. Steinitz boasted that our situation was excellent and conveyed a sense of "I have plenty to dole out." The result was that the pressure groups and the big unions stood in a long line outside his door with giant demands.
In those halcyon days, Steinitz and Netanyahu opened the budget so they could spend another NIS 7 billion to NIS 8 billion annually. I tried to persuade them that someone who wants to be good will end up being bad, but I failed.
In the first two years, 2009 to 2010, things went on somehow with the help of postdated checks. But in the 2011-2012 budget, the dams were breached and government spending grew fantastically - by NIS 18 billion in 2011 and NIS 15 billion in 2012.
The government was good. It signed generous wage agreements. It handed out billions to higher education. It increased defense spending and gave liberally to the railways. It gave supplements to all the ministries and coalition parties. And when the social protest movement broke out in the summer of 2011, it drove the prime minister so crazy he agreed to hand out millions that he didn't have.
Now the reckoning has come: It turns out that this year our deficit is much higher than originally planned. And that's nothing compared to the abyss that's awaiting us in 2013.
Steinitz recently asked the credit rating agencies to raise Israel's rating. They must have though he was joking. Because when every European country is making drastic cuts, firing people from the public sector and cutting salaries, only Israel is living in a wonderland. Only Israel has reduced the gasoline tax, and only Israel is increasing wages and public spending without room in the budget.
The big question is whether the election economy, which has already been launched, will blind the people. Will Netanyahu and Steinitz pull the wool over our eyes? If the answer is yes, well, as the song goes, "The people are stupid so the people will pay."