The government’s economic policies were criticized by both Labor and Likud members of the Knesset’s Finance Committee today. The debate was occasioned by the Cabinet’s approval yesterday of a 16.5 billion Shekel supplementary budget of which 9.3 billion Shekels will go toward paying for the war in Lebanon. The additional budget was presented to the Knesset this morning.
Dr. Moshe Mandelbaum, Governor of the Bank of Israel, warned the Finance Committee that Israel could suffer from the some unemployment now endemic in most of the Western world if real wages continue to rise. He urged a special effort to reduce the national deficit and to prevent any further increase in the number of civil servants.
Labor MK Adi Amorai compared the government’s policies to those of certain Latin American countries which tried to fight inflation by borrowing from their foreign currency reserves. The result of such policies was total economic collapse, yet Finance Minister Yoram Aridor tried to do the same thing before the 1981 Knesset elections, he said.
Yigal Cohen-Orgad of Likud, acting chairman of the committee, warned against “addiction to American economic aid.” He objected to recent attempts by the Treasury to curb inflation by slowing down the devaluation of the Shekel. That only encourages “short range delusions,” he said.
JTA has documented Jewish history in real-time for over a century. Keep our journalism strong by joining us in supporting independent, award-winning reporting.
The Archive of the Jewish Telegraphic Agency includes articles published from 1923 to 2008. Archive stories reflect the journalistic standards and practices of the time they were published.
