The economic policy that Shas chairman Aryeh Deri is expected to lead, if he receives the finance portfolio, is very far from the approach of the economic right.
The right-wing voters, who support a free liberal economy, apparently did not imagine that the finance portfolio would be received by the Shas party, which advocates the economic leftist policy.
19 years ago, when he served as finance minister, Prime Minister-designate Binyamin Netanyahu cut child allowances to encourage the ultra-Orthodox to enter the job market.
At that time, he used to use the image of "the fat and the thin", to describe the productive private sector, which carries on its back the expanding public sector - the concept of the economic right.
The ultra-Orthodox coalition's demands amounting to several billion shekels per year, which include doubling the allowances of the fatherless, the distribution of food cards and increasing the funding of the ultra-orthodox institutions without the condition of core studies - are in complete contrast to Netanyahu's economic policy, at least the one he had then when he was finance minister.
Netanyahu's image regarding the fat and thin person is still relevant today, since the financing of the ultra-Orthodox will be done through an increase in the government budget.
Therefore, Netanyahu's political situation and the fact that he needs the ultra-Orthodox to return to power, caused him to abandon at least some of his economic views in favor of promoting his political interests.
Will Netanyahu appoint Deri to the position of Minister of Finance?
(archive), photo: Oren Ben Hakon
And some will say that another 2-3 billion shekels per year is not an astronomical amount and not something that the state, with a budget surplus of 30 billion shekels from the beginning of the year, will not be able to meet.
However, the real economic cost of increasing the pensions of the youths is measured by the indirect economic effects - encouragement of not going to work in the ultra-Orthodox sector.
So from an economic point of view, the problem is not in the extent of the budget that the ultra-Orthodox will receive under the government that will be established - indeed it is not about sums that will collapse the economy - but that these funds do more harm than good.
Doubling the reduction in marriages and the distribution of food stamps create a negative incentive for the ultra-Orthodox sector to enter the labor market, perpetuate its poverty and support the differentiation of the sector.
If the same amount were dedicated to improving the infrastructure in Bnei Brak or creating training programs for the ultra-orthodox sector, it would be a legitimate economic investment that would contribute to the economy.
Smotritz, Deri and Netanyahu - which direction will the government go?
(archive), photo: Oren Ben Hakon
The meaning of the non-integration of the ultra-orthodox sector in the employment market is a ticking time bomb.
As the sector grows, and according to the forecasts it will reach about a third of the population in about 40 years, it will be necessary to impose taxes at a higher rate on the productive sector in order to continue to finance the non-working population.
The long-term meaning is the spillover of poverty to the general population and a decrease in the standard of living.
Also, the budget demands of the ultra-orthodox parties are unprecedented, even though in the past they achieved similar political achievements (11 Shas mandates) and were in Netanyahu's coalitions. The current timing works in their favor - this is their money time to present high demands and with a high probability of receiving them. The problem It is that if the integration of the ultra-Orthodox population in the employment market continues to be low and may even deteriorate (only about 50% of ultra-Orthodox men work), in a few years we will all pay the price.
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