Opinion: While the new finance minister will start their term clutching an open checkbook, it is our children who will end up paying for loans to assist the institutions that will surely require financial aid amid the biggest crisis the country has ever known
We have barely finished learning the importance of swabs or the difference between quarantine and self isolation, but now we suddenly have another tsunami of jargon to contend with.
After the doctors come the economists with talk of fiscal extensions and monetary streams.
Truth be told, whether they were merely bickering over whether to print money or buy bonds, we still wouldn’t understand what it is that they are saying. Suffice to say, the fight over how to deal with the economic crisis is now in full flight.
If a solution to the coronavirus is not found soon, we will have to deal with a serious and painful economic crisis on a scale we have never know before – and the first symptoms of such a crisis can already be seen.
So while we navigate the argument of whether it’s better to save businesses or give money directly to the workers, we should try to focus on the bottom line.
All the suggestions, ideas, initiatives and plans ultimately boil down to one question: the size of the loan the country is about to drop on your children without ever asking them their permission.
Truthfully, we are past the stage of the debate about whether it is fair to drop a debt of this magnitude on the next generation and on are now pondering the number of years they will have to work to pay off said debt.
Israel’s government is about to spend a lot of money, and while it seems it will be less than the oft-mentioned NIS 80 billion, it will still be a vast amount.
The first tranche is being spent trying to fight the epidemic, the next will go to help those facing financial collapse and finally a lump sum will go on giving the economy a push after its stagnation.
It seems there is no way out. An economic crisis usually occurs where there is a shortage of supply, when factories cannot produce enough goods, or a shortage of demand, when the public cannot afford to purchase said goods.
This time, both supply and demand are collapsing at the same time. The public cannot afford to spend and the factories cannot afford to produce. This is truly a precarious situation and so most experts agree now is the time to pour budgets on the fire.
Under such circumstances, the only thing we can still be concerned about is where will the money be spent.
The next finance minister will start their term holding a fat, open checkbook and all those guarding the country’s expenditure from the Bank of Israel to the Treasury, will give the green light for an enormous loan, whether from the Israeli public, other countries or even the central bank itself.
This encouragement to spend as much money as possible could cause the new finance minister to spin out of control. The outgoing minister Moshe Kahlon lost control when only a few institutions sought financial aid. This time, everybody will need it.
Hospitals will say they need to prepare for the winter, in case a stronger, more violent strain of the coronavirus shows up. Workers, the unemployed, charities and small businesses will also place themselves on the minister’s doorstep.
They will all fight tooth and nail for one of the minister’s financial ventilators. And not unlike in the hospitals, there are a limited number of those as well.
Even worse, Prime Minister Benjamin Netanyahu’s political partners will come calling for the benefits he promised their voters.
“We stuck with the political bloc that got you re-elected,” they will surely say to him. “Now is the time to pay what was promised.”
This will be the moment at which we will all need speak out and make just one thing very clear to the new minister: Don’t try to butter us up with superfluous aid programs and wean yourself from political promises made to already privileged sectors.
Because this time we already know that when the cash is handed out, it is our children who will eventually need to pay it back.
As reported by Ynetnews