With Israel's Huge Deficit, Comes a Huge Opportunity for Avigdor Lieberman

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Avigdor Lieberman arrives for a meeting with Yair Lapid at the Knesset, this month.
Avigdor Lieberman arrives for a meeting with Yair Lapid at the Knesset, this month.Credit: Emil Salman

This week, Bibi managed to score a spectacular own goal. His failed attempt to appoint Ofir Akunis, his Sancho Panza, as minister of justice, while expressing his contempt for the attorney general and the High Court of Justice, clarified to Naftali Bennett and Gideon Sa’ar that there’s nothing for them in that corner. A scorpion doesn’t change its character. It matters not what he promises them and what he signs, in any case he’ll sting them and break any agreement; he’ll undermine them, humiliate them and make their lives miserable, even if he’s appointed as minister for environmental protection while they serve as prime minister.

Indeed, Bennett responded to the stormy cabinet meeting, stating that “Israel is approaching an abyss of anarchy,” continuing to a meeting with the United Arab List’s kingmaker, Mansour Abbas. Sa’ar announced that “the saga around the appointment of a justice minister is further testimony to the urgent need to replace the government,” before going into a long meeting with Bennett. Thus, through his frenzied conduct, the “magician” only managed to aid the attempts to form an alternate government.

One of the important issues this new government will need to deal with is the economy. There is already a consensus in the “change bloc” that Avigdor Lieberman will be the new finance minister. This is a huge opportunity for Lieberman, since “Herod,” aka Yisrael Katz, is leaving behind scorched earth: a huge deficit, an enormous debt, high unemployment and low growth. From such a nadir, one can only go up.

Lieberman describes himself as a follower of Ze’ev Jabotinsky. He believes in a free economy with a socially-oriented approach. He believes in five principles laid down by Jabotinsky, including helping people who can’t earn a living on their own through subsidized food, housing, clothing, education and medical care.

He intends to attain fast growth through extensive reforms involving new initiatives in infrastructure and transportation, with funding coming from the private sector and institutional sources such as pension and provident funds. To encourage investment, Lieberman wishes to reduce bureaucracy and regulation, and to achieve cooperation he wants to reach a package deal with the Histadrut labor federation and employers, such as the one reached in 1985 as Israel was emerging from hyperinflation.

Regarding high unemployment, now standing at half a million workers, including people on unpaid leave, Lieberman believes that unemployment benefits to the latter should cease, since they are creating a culture of idleness or unreported work. This is precisely the opposite of “Herod’s” plans, which include a continuation of these payments beyond June. Among the parties in the “change bloc” there is already agreement that the next budget, which will only be approved in July or August, will cover two years, 2021 and 2022. The budget is to include a multiyear plan for reducing the large deficit and debt left behind by Bibi and “Herod.”

Lieberman is telling his associates that his goal is to reduce the deficit to 2.5 percent of the GDP within two to three years, which will allow a reduction of the national debt. He doesn’t intend to do so by raising taxes, since this impedes growth and leads to a flight of capital, as well as to the departure of good people from the country. In any case, the very wealthy will not pay high taxes. That’s what they have lawyers for.

Lieberman knows he won’t be able to fulfill all his wishes in the realm of state and religion, but he tells his associates he won’t concede on the military draft bill, on cancelling the rabbinate’s monopoly on kashrut, on allowing conversion by municipal rabbis and on introducing core subjects to the curriculum of the entire school system.

This is an unconventional politician who may surprise us, first with the appointment of Rabbi Haim Amsalem as Sephardi chief rabbi. Amsalem advocates moderate Judaism, integration of Torah study with earning a living, equality in sharing the burden of military service, and reform of the Chief Rabbinate, so this is already quite revolutionary.

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