It used to be common to wear suits on the street. Why? Because everyone was wearing suits. Those who did not wear a suit were not part of civilized society. People gave up meals to buy suits, people borrowed suits to get to job interviews or dates—all just so as not to look poor or lower-class.
When most people had suits, they didn't give anyone an advantage. If a lower-class person can accompany a suit to a job interview, the upper-class suit owner has lost his relative advantage. In economics, this situation is called suboptimal equilibrium, or "the prisoner's dilemma." Everyone has to get suits, but because everyone gets them, no one enjoys the advantage they give.
Suboptimal equilibrium exists in many areas – inflation of academic degrees that should have given an advantage in employment has created an unnecessary lower bar in many areas; Shopuni culture, relationship behaviors, work and business relationships. But there is, in my opinion, no area in which all the actors are more imprisoned in the prisoner's dilemma than in Israeli politics. Dealing with coalition finances, for example, benefits all sides except the public. The left can claim that it is fighting for the secular, and the ultra-Orthodox can claim that they are "bringing money home." Without the coalition funds, it may turn out that the parties have no way to justify their existence. The cost of coalition funds is high, and the damage from them is higher, because most of them are directed to unproductive activities. But the two important points in the coalition funds have nothing to do with the damage.
The first problem is the refusal to understand the source of the coalition demands, which is actually the opposition of the other side to political compromises in return for their cancellation. If the left was willing to support a more moderate budget in exchange for canceling the coalition funds, they could easily be canceled. But the opposition needs these funds as a tool to bash the right no less than the ultra-Orthodox parties need these funds for votes. The only case, by the way, in which the state managed to get out of this prisoner's dilemma was when the left prioritized the good of the state over the desire to rule: in 2003, when Tommy Lapid's Shinui joined the Likud government.
The second problem is that the media's obsessive preoccupation with coalition funds diverts the discussion from several deep problems, which can and must be addressed if a rapid recovery and return to growth are desired. The largest budget item in Israel is not at all a section, but a few regulations of tax benefits. Israel gives more tax benefits than it collects income tax. Had the tax benefits been a budget item, it would have been NIS 80 billion – higher than the education or defense budget. From benefits for huge pensions to tax exemption on gambling and "encouragement of capital investment," tax benefits are mainly a method of transferring money from citizens to the upper deciles. The war and its damage can be financed within a year if only the tax benefits are canceled, without changing anything in the priorities.
The largest budget item in Israel is not at all a section, but tax benefits. Had the tax benefits been a budget item, its value would have been NIS 80 billion, larger than the education or defense budget
In the two big budget items, there are many billions in fats. The Ministry of Education is budgeted at NIS 30,30 per student, but not a single student in Israel enjoys an education worth NIS <>,<>. Improving the quality of teachers and linking wages to student achievements will propel Israel forward. The product of future students will easily cover the investment. In the Ministry of Defense, it turned out, billions are going to the wrong things, and even at the end of the war, when the generals demand money, it will not be for guard posts and equipment for the soldiers.
The Histadrut can also go under the stretcher: freezing public sector wages for those earning more than NIS 15,<> for three years will lead to savings of billions, the same goes for raising management fees in budgetary pensions. It is possible and necessary to fight "coalition budgets," but we must not forget that the big and important money is not there.
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