Student leaders offer dialogue, not ultimatums

Former Bank of Israel Avia Spivak deputy governor: The government uses the name of economics in vain.

"I am offering Prof. Trajtenberg dialogue, not ultimatums or demands, but things that I think the public ought to know. His visit to the tent protest was important, but not the most important thing. A real national action plan backed by action and budgets is what is important," protest leader National Union of Israeli Students chairman Itzik Shmuli said today in response to Rothschild team leader Prof. Manuel Trajtenberg's visit to the Rothschild Boulevard protest site last night.

At today's press conference, the Think Tank, chaired by former deputy governor of the Bank of Israel Avia Spivak, which is advising the protesters, presented models and real options for solving the problems behind the protest. The press conference was organized in response to Prime Minister Benjamin Netanyahu's establishment of the Rothschild team.

Spivak said, "Our teams will offer alternatives for the struggle for social justice. The government appointed the Trajtenberg team, but economics isn't everything. We bring a broad range of expertise and many years of experience. Anyone who thinks that the free market alone can solve society's illnesses doesn’t understand what really happens. We still don’t know what the Rothschild team's mandate is, or what it will do. The government must improve all the areas which resulted in social gaps.

"The public is telling the government, 'Start correcting things. We've had it with your disfunction.' The government is not telling the public the truth. It claims, for example, that spending should not be increased to prevent instability. It is possible and necessary to change tax policy, and cut all of Netanyahu's indirect taxes. If we roll back all of his indirect taxes, billions will be discovered. The government uses the name of economics in vain. As an economist, I can tell you that extra spending comes at the expense of higher income, but the government should retreat from its basic principle of tax cuts, lower government as a share of the economy, and cancelling the biennial budget. The government should reopen the 2012 budget."

Spivak added, "It is impossible to ignore the global storm around us. In Europe, there are riots and protests that reflect the lack of confidence in free markets. We need a change in thinking, and to change the government's tune. The people demand social justice."

Yesterday, Trajtenberg told the tent protesters, "Every economic decision has economic significance for better or worse. I will do everything I can so that the report will include change. I won't seal your fate; only you can decide your fate. You will bring about change."

Trajtenberg said that the government will not bury his report. "The protest is so great that no government can ignore the committee's recommendations, especially not the government that appointed it."

He added, "Israel is not in a recession. The issue of the optimal use of taxes, including changes in the tax mix is at the core of the committee's discussions."

Published by Globes [online], Israel business news - www.globes-online.com - on August 15, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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