Israel's slowing economy may pose trouble for Netanyahu

[bemildred]

JERUSALEM — Israel's once-envied economy, which dodged the recent credit crunch and grew even amid the international recession, is heading toward choppier waters.

The government is taking steps to avert a slump, and is already facing criticism over the moves.

After assuring Israelis for nearly three years that their economy was outperforming the rest of the world, Prime Minister Benjamin Netanyahu surprised many this month by abruptly pushing through a platform of austerity measures, including higher income taxes for top earners, new levies on cigarettes and beer, and raising the VAT, a kind of sales tax, from 16% to 17%.

"Israel's economy has handled the crisis pretty well up to this point, but there is a significant risk that things are not going as well as the government has tried to convince us," Hebrew University economist Omer Moav said.

http://www.latimes.com/news/nationworld/world/la-fg-israel-economy-20120825,0,4162252.story

[Ken Burch]

1. Hopefully, Bibi will fall before he impoverishes his country and starts World War III.

It's not as if there's any reason to KEEP the guy in power.

[holdencaufield]

2. Or unleashes ...

... Cthulhu, or gives birth to the son of Satan, or causes Coca-Cola to re-release New Coke

[Ken Burch]

3. If he hits Iran, there could be massive blowback, and it's folly to assume

that the superpowers wouldn't end up getting involved.

The only sane choice is NOT to attack Iran.

[holdencaufield]

4. I wonder ...

... why the superpowers never ended up getting involved all the times Israel has been struck from her neighbours?

[azurnoir]

6. why haven't the super powers gotten involved when Israel is struck by its neighbours? really never?

perhaps you should review the 1973 Yom Kippur war

[Ken Burch]

10. The USSR basically caused the Six Day War, by telling the Arabs Israel had nukes.

n/t.

[holdencaufield]

12. What is your definition of "massive blowback"?

Is it -- as I assumed -- involvement of foreign fighting in the Middle East on the ground or an escalation of hostilities outside of region? Specifically, an escalation of a Iran-Israel conflict that would involve troops from outside the region?

Or -- is it the same arming of both sides / general interference that outside parties do regularly, with our without a conflict?

Because one might easily be interpreted as "massive blowback" where the other would simply be a continuation of the silly buggers games that the Europeans and the US engage in every single day in the Middle East and have been for decades.

There have been -- to date -- four attempted full-fledged invasions of Israel, three local conflicts there was no attempt (or capability) of invading Israel, two surgical strikes by Israel on the nuclear facilities of another country and roughly 65 years of low-level conflict -- without ANY escalation outside of the region or the threat of foreign forces being drawn into the conflict.

It would seem that your fear of "massive blowback" is either a gross over-exaggeration of the potential consequences or very optimistic wishful thinking on your part.

I'll leave it to you to say which.

[Ken Burch]

13. I'm talking open and extended war between Iran and Israel

with the U.S. and Russia both getting involved.

And you know perfectly well I don't WISH for such a thing...don't ever accuse me of wishing that kind of harm on any country again.

[oberliner]

5. Who would you like to see take his place?

Are there any leading candidates you would support?

[Ken Burch]

9. the woman who's leading Labor now seems ok

The Kadima guy would be tolerable as a caretaker until an election.

[azurnoir]

7. well it's not so bad

only one guy has died because he immolated himself due to homelessness

[bemildred]

8. Cheer up:

Israel's three biggest banks report falling profits

Israel's gas and VAT set for back-to-back rises

Russia says Iran's nuclear power plant fully operational

[Purveyor]

11. Hold on to your purses and wallets US taxpayer. We all know where this is going... eom

[King_David]

16. Tell us nt

[shaayecanaan]

14. I hate to say this, but I agree with him...

Israel is fiscally in a better position than the US (public debt in Israel is 74% of GNP vs 104% for the US), but its still in a fairly unenviable position particularly when you look at demographics going forward.

You have to also factor in that the main reason why Israel did not go into recession was because of its high immigration rate (about 2% a year). On a per capita basis, Israel *did* go into recession.

[bemildred]

15. Well, it's a question of current assets vs long term asset flows, so to speak. nt