The Corona crisis exacerbates public spending at a time when prudent economic steps are required. As explained by Ori Katz and Michael Sarel from the Kohelet Forum, the situation can remain with us for months, and even years, it is therefore important to resist and not give in to the pressures.
This pandemic is unknown to all of us, an extremely high level of uncertainty makes it impossible to estimate the future needs of the country. If the government decides to give right now subsidies to El Al or the Hotel Association, it will probably be a massive mistake in the allocation of public resources.
The government doesn't have an infinite amount of money to distribute around. The State is already heavily indebted; the taxpayers are the ones who will pay the bill, either now or in the future if the government increases its budget deficit.
What if the money we give now to the big corporations and special interest groups could have been used in six months for helping struggling families or produce mass vaccination?
No past data to rely on to even begin an economic forecast. No one today knows what the total cost of this pandemic will be nor how the world economy will operate in its aftermath.
Faced with this level of uncertainty, individuals and the government should refrain from swift decisions and adopt a very frugal attitude. This way, if things get worst, a little is left for emergency expenditure.
If the government decides now to pick the one too big to fail, it will delay the start of future recovery and cause grave harm to every citizen.
Resisting to the temptations of saving the "too big" might aggravate the immediate impact, people losing their jobs, small companies, and self-employed going bankrupt. But, eventually, as human history has shown us, better technology will appear, more productive businesses will open, employment will pick up, and the economy will recover.
During the transition period, individuals, not big corporations and special interest groups, are going to require the most urgent help. How revolting that the Histadrut, one of the most prominent worker unions, advocates giving unlimited subsidies for firms and special industries in total opposition to its member's interests!
As in the fight against the virus, the solution is the individual, not the State. It's much more likely that the recovery will emerge from private creative minds and not from obsolete public economic models.
Let's all keep healthy :)