Analysis: Limit the Budget to Spur Growth

Economics professor MK Avishay Braverman says the budget should be increased by 2.5 percent instead of 1.7 percent, because Israel has many problems that need solving.

Braverman was commenting on the 2008 budget presented by Finance Minister Roni Bar-On yesterday.

But if it were so easy to increase the budget by 2.5 percent, then why hasn't the prime minister done so? Doesn't Olmert like giving gifts? After all, a 2.5 percent increase means that instead of increasing expenses by 3.8 billion, they could be increased by 5.6 billion.

The army is demanding billions to bolster its strength, and the Education Ministry is demanding more money for reforms and teachers' wages. Then there's the universities, the elderly, Holocaust survivors, polio victims, the medicine basket, children at risk and minimum wage earners, to name just a few.

But if we want stability and growth, we must limit the budget. The Western world has long grasped that to achieve stable long-term growth, it must reduce the government's role in the economy. This leaves more room for the private sector to expand its activity and produce employment and growth. That's the proper solution for poverty and social gaps. And when there's growth and tax income rises, then the government can take care of the sick, the old and anyone who cannot work.

But perhaps we should put aside all the logical arguments and explain to the public that an irresponsible budget policy would encourage the continued stock market crash. The public would understand that immediately, because it applies to each person's own pocket.