The Cricket Dances and So Do We

The finance minister has been spinning webs around the public's eyes, while we hesitate to react, and when we do, its too late.


Finance Minister Yuval Steinitz has yet to learn the first law of political economy: A "good" finance minister is a "bad" finance minister. That's it in a nutshell, and the rest is details.

Steinitz must understand that the finance minister has to play the role of the evil treasurer. He must say to everyone: "I don't have any." He has to grab a microphone and shout: "Get real!" And then one day everyone will understand that he is a good finance minister who saved the country.

But Steinitz is not prepared to be the bad guy. The 2010-2011 budget is a good example. The first and basic mistake is Steinitz's consent to increase the budget by 2.7 percent a year. Unfortunately, the Finance Ministry's budget director, Udi Nissan, supports this irresponsible expansion, so he also stands accused.

This basic mistake led to another macroeconomic mistake: a deficit that is too high, 3 percent of gross domestic product, which will prevent the speedy reduction of the public debt and expose the economy to shocks in the event of a security crisis. We're partying and dancing like the cricket in Krylov's fables, ridiculing the ant (Britain, Spain, Portugal ), which is laying in supplies for the winter, and believing that someone (the United States ) will save us on a rainy day.

The continuing mistake was reflected in the "battle" over the defense budget. Steinitz claims he achieved a budget cut, but the truth is there was no cut. He merely reduced slightly the huge increase in the defense budget. And even this small reduction will not be carried out.

What's more, on Friday, Steinitz gave up the only tool with which he could have monitored the reduction. The clause stipulating that the Finance Ministry's accountant general will monitor the Israel Defense Forces' salaries, pensions and tenders was erased from the Economic Arrangements Law.

The other "achievement" - raising the retirement age for career soldiers - never happened. For years the Finance Ministry has been trying to make a change in this area. In May 2009 it was agreed that Chief of Staff Gabi Ashkenazi would submit within four months an agreed plan to raise the retirement age, but no such plan has been submitted.

At that time, the Finance Ministry demanded the bare minimum - that the minimum retirement age for those serving on the home front, some 75 percent of career soldiers, would be raised from 42 to 57, because why should an economist at army headquarters receive a pension for 40 (! ) years at the public's expense? The ministry also demanded that the minimum retirement age for those serving in combat units, who constitute 25 percent of all career soldiers, would be raised from 42 to 46.

And then on Friday, Steinitz bombastically announced: We've finally succeeded in raising the retirement age to 50. But our investigation showed that it was only the "average" retirement age of non-combat career soldiers that was raised. There was no agreement on raising the minimum retirement age, or on a timetable. Because in our world there are three kinds of lies: an ordinary lie, a white lie and statistics. That's why the talk was about an "average" that can't be enforced and can be used to juggle numbers.

Even without this absurd agreement, the average retirement age of non-combat career soldiers naturally rises every year, because life expectancy is increasing and conditions in the army are excellent. That's why the average will reach 50 even without any agreement.

It should also be noted that the IDF has defined non-combat careers soldiers as people who never served in field units or in the army's technology branches - which means that it's not 75 percent of the army as the Finance Ministry wished, but a mere 20 percent. In short, smoke and mirrors.

I asked treasury officials how it was possible that they did not set a new minimum retirement age, but only a meaningless "average." They replied with some embarrassment that they will have meetings about this with the army.

I'm reminded of the story about the man who faced a harsh verdict in court and shouted to the judge: "Just a second, I'm ready to reach a compromise with the prosecutor." But it's too late. The verdict was given on Friday, when the army once again ran circles around Steinitz and us all.