Sacrificing long-term benefits for short-term gains

Lapid is caving on vital reforms. But it’s Netanyahu who maneuvered him into a job he can’t handle

May 6, 2013 18:15
Histadrut chair Ofer Eini at Labor Court

Histadrut chair Ofer Eini at Labor Court_311. (photo credit: Marc Israel Sellem)

Finance Minister Yair Lapid rightly took flak last week for seeking to increase the 2013 deficit target from 3% to 4.9% (he subsequently retreated to a still excessive 4.65%). Yet his critics overlooked two important points. First, if leaks emerging from the Finance Ministry are correct, that wasn’t even Lapid’s worst move of the week. And second, though he is certainly responsible for his own mistakes, the blame rests at least as much, if not more, with Prime Minister Binyamin Netanyahu.

The deficit fiasco alone would raise grave doubts about Lapid’s fitness for his post. A higher deficit means billions of shekels out of all our pockets, because the more the government borrows, the more interest it must pay on its loans. Even at the same interest rate, payments on, say, NIS 45 billion would be 1.5 times those on NIS 30 billion. And often, the rate rises when you borrow more, swelling the payments even further.


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