Israel: Writing Checks with Your Mouth Your Butt Can’t Cash, Part One

It is hard to figure out how this is happening when you take into account several factors:

• The level of foreign aid received by the country.
• The level of tax revenues collected by the state (income, utilities, gasoline, business taxes, real estate – to name a few).
• The level of charity received from outside sources (Christian, Jewish, Muslim groups).
• Expatriate remittances sent to loved ones still residing in Israel .
• Tourism dollars brought in as the result of cities like Jerusalem being the home of three major faiths (hotels, restaurants, souvenirs, tax services, airport taxes, extra film, special charter services, additional packages sold on site for additional visit locations).

By all accounts if you think about this, the country on a whole should be doing much better than compared to its neighbors. If you take into account the 2000 intifada, then yes, there were lean times that impacted the revenues in some cases, but not all. For instance, the intifada wouldn’t have reduced gasoline taxes.

Wars have a strange impact on budgets. They strain them. Funny how that happens…that is, unless you’re in the defense industry, then you love war because it lines your pockets. When Prime Minister Ehud Olmert was “goaded into war”, it seems he didn’t have a conversation with the Finance Minister Abraham Hirchson, which in retrospect, might have been a wise first move.

“Do we have the cash?”

“Nope.”

“ USA , we’ve taken your plan under advisement and have decided a war with Lebanon does not appear to be appropriate at this time.”

If news reports in this case are credible, the Israeli finance ministers did look at the budget and they concluded there was an NIS 8 billion surplus ($1.82 billion) with a one percent growth in the economy. A surplus is always a good thing, but let’s face it – $1.82 billion is chump change jingling in your pocket when you’re sporting a big stick and looking to clock your neighbor with it. A military conflict is much more than the immediate needs of weapons and ammunition rounds:

• Replacement of damaged military hardware.
• Replacement of stock shells post hostilities.
• Salaries of average workers lost
• Lost revenue of businesses.
• Damage claim payouts to businesses .
• Infrastructure repairs.
• Emergency first responders in the affected areas – their equipment, salaries, replacement of damaged equipment (through overuse, improper or poor maintenance, or enemy shelling).
• Lost payroll and other business taxes in areas of intense conflict
• Control of wild fires set off by enemy shells – planes, gasoline to fly them, chemical retardant sprays to treat areas, and water which is always in short supply in the Middle East .
• State aid in evacuating, feeding, medical care, and housing a segment of the displaced population. Evacuating the most vulnerable of the population: children, elderly, the disabled

Animal control (or removal of dead animals to prevent the spread of disease) of all the abandoned animals left behind by owners unwilling or unable to take them along during an exodus .