The pros and cons of the coronavirus aid plan

The move to distribute money to all citizens – including many who don’t really need it – smells of cheap populism and probably is just that.

Israeli Prime Minister Benjamin Netanyahu sits next to foreign minister Israel Katz during a cabinet meeting (photo credit: REUTERS)
Israeli Prime Minister Benjamin Netanyahu sits next to foreign minister Israel Katz during a cabinet meeting
(photo credit: REUTERS)
The economic plan that Prime Minister Benjamin Netanyahu and Finance Minister Israel Katz unveiled Wednesday night began to receive criticism even before it was officially announced.
The plan will give families with one child NIS 2,000; families with two children, NIS 2,500; families of three or more, NIS 3,000; and individuals over the age of 18 will get NIS 750.
“Why do we give out this money? Because we have to get the economy moving,” Netanyahu said, in announcing the plan. “People are sitting at home. They do not make purchases. When we give them this money, they will buy. It encourages consumption – they will go to buy. And once they go to buy, businesses expand, they have to hire workers.”
While the plan provides an immediate injection of cash to the people who need it most – those that lost their jobs and businesses due to the pandemic – the blanket payments also mean that money will be handed out to many Israelis who have not been affected financially by the country’s economic crisis.
Many senior Treasury officials opposed the plan for that reason, including director-general Keren Terner Eyal, who according to Channel 13 said it was like “throwing suitcases of money that we don’t have into the sea.”
Criticism emerged even from within the coalition, with Labor, Social Affairs and Social Services Minister Itzik Shmuli of Labor suggesting that “it would be better for helicopters to take that cash and scatter the money where they really need it instead of throwing it from the clouds.”
Netanyahu cited the urgency of giving out the money quickly as the reason for bypassing a screening process that would determine eligibility based on income and other criteria – a process that could take weeks and get mired in bureaucracy.
Other critics called the plan populism at its worst, and claimed that it was a flagrant attempt by Netanyahu to buy off the public amid flagging poll numbers over his handling of the corona crisis and just before the resumption of his fateful trial for corruption and bribery.
Although there are certainly grounds for cynicism, and the plan to give grants to every citizen is certainly not the panacea that will jump start the economy, there is some validity to the viewpoint of Meretz MK Tamar Zandberg, whose party focuses on the population that is most affected by the economic crisis facing the country.
 “The grant is right – and it’s right that it’s universal. It will give money to families to spend in the shrinking economy and at businesses that need it. Those who ‘do not need’ are a very thin layer, and creating tests for receiving the grant will cause more harm than good for everyone,” said Zandberg, crossing partisan political lines to accept the plan for its benefits, not its flaws.
It is also true that it is easy to complain and to criticize, but sometimes it’s the result of a knee-jerk aversion to anything that emerges from the Prime Minister’s Office. 
In this case, and despite its problematic aspects, the grant plan might prove to have logic during this unprecedented time and place we find ourselves in.
Nevertheless, it is difficult to shake the feeling that something else is at play. Netanyahu revealed a sweeping economic relief plan just last week. Checks to all citizens was not mentioned there. So what changed? The increasing demonstrations outside his Jerusalem home? The fact that his bribery trial resumes on Sunday? The drop in his approval ratings in all polls and the rise in popularity of his arch rival Naftali Bennett?
The move to distribute money to all citizens – including many who don’t really need it – smells of cheap populism and probably is just that.
Netanyahu is a gifted politician and has had success in the past as finance minister but he is now in political trouble and giving away money is a way to distract the people from his trial, the mismanagement of the coronavirus and more. In addition, when the entire Finance Ministry staff comes out against the plan and warns of burning cash that Israel doesn’t have, the public should pay attention.
It is not too late to reconsider the way to distribute this money based on need. Too many people are suffering. Let’s find a way to get it to them.


Tags economy