For nearly five decades now, Israel has been an independent nation. The Israeli people have been proudly committed to maintaining that independence. They have held on dearly to the liberty which their independence affords, standing up time and time again to external forces that would wrest that liberty from them.
But today, it is the internal forces as much as the external threats that are compromising and endangering Israeli independence and liberty. Israel has become inordinately dependent on foreign aid. Not only has this situation created an unhealthy dependence on foreign government, the "free" nature of these revenues has led Israeli citizens to become overly dependent on their own government.
Soaring public sector wages, inflation, the choking of the private sector, the almost complete lack of foreign investment in Israel, unemployment, an oppressive bureaucracy, confiscatory taxes, the unfulfilled promise of aliya (immigration), and the never-ending yerida (emigration) prevent the Israeli people from achieving and enjoying the full fruits of their labor. Israel confronts the paradox of an apparently fast-growing, aid-fueled, economy in which people find it increasingly difficult to provide for themselves and their families.
If Israel is to remain a truly independent nation, if Israelis are to enjoy a liberty in which each can share a part, then Israel must reverse the economic policies that fetter abilities and resources. The situation calls for nothing short of comprehensive economic and regulatory reform.
We developed the Jubilee Plan for economic prosperity, in the spirit of the year of Jubilee. It rests on the premise that the prevailing economic values and ideas are self-defeating. Israel must develop a whole new perspective. It is imperative that Israel’s policies begin to reflect the economic reality that land, assets, opportunities and decisions are better invested in the hands of the people than in the hands of the state.
This does not mean that Israel needs to abandon its traditional values. It means that Israel must finally acknowledge that current policies do not fulfill those values — that indeed, they are self destructive of the values Israelis cherish most dearly.
Israel is not alone in its struggle to come to grips with this reality. The United States faces a similar confrontation with economic reality. For example, Felix Rohatyn, one of the best known financiers in the United States, and a traditional Democrat, recently called upon his political party to give up its failed conventional wisdom about how to achieve prosperity and fairness for all. In a recent article in the Wall Street Journal (11 April 1996) Rohatyn calls upon the leaders of his party to reject the depression-era dogma of the 1930s.
Israeli leaders too can benefit from Mr. Rohatyn’s insights:
"As a traditional Democrat, I have always believed that freedom, fairness and wealth, basic to a modern democracy, required an essentially redistributionist philosophy of wealth, that a fairly steeply graduated income tax was required as a matter of fairness and that lower deficits would guarantee adequate growth and a fair distribution of wealth. The experience of the last two decades, with the advent of the global economy, has very much shaken that view. Fairness does not require the redistribution of wealth; it requires the creation of wealth. . ."
Mr. Rohatyn was undaunted in facing up to the fundamental truth that the steps required to raise everyone’s standard of living in absolute terms are not likely to reduce the present degree of income and wealth differentials. In fact, he acknowledged that a continued striving for economic leveling will defeat efforts to improve the plight of the poor.
The Jubilee Plan for real independence begins, therefore, with a critical examination of current policies to rout out the forces that undermine our productivity and profitability. It proceeds from a recognition that the Israeli people have come to be dependent on their government much in the same way their government is dependent on foreign governments.
The objective of the Jubilee Plan is to set forth a long-term economic strategy to overcome this dual dependency that is eroding the very foundation of the nation. This report goes on to suggest specific libertarian, growth-sustaining remedies to the problems exposed and it seeks to do this on every economic front. For example:
Taxes: The current tax structure is stunting the economy and discouraging individuals from working, saving, and investing. It should be replaced by a 26% flat tax on all income.
Privatization: State-owned lands and enterprises are sitting fruitless in government's possession. They could be put to far more productive use in the hands of private citizens and businesses. They should be sold back to the people or privatized by other means. Monopolies create a market environment in which higher prices are attached to low-quality goods and prevent Israeli's from being able to compete in the global marketplace. State subsidizing and protection of monopolies should be put to an end.
Transportation: Public transport is an invaluable mechanism for increasing economic opportunity. This advantage should not be confined to only a few companies but opened up, so that prices can fall while service improves. And taxes should not prevent the average Israeli from owning a car.
Industry and investment: Subsidies benefiting one well-connected company over another, smaller family-owned or privately-operated businesses, ultimately do not serve the best interest of the nation or its trading partners. Foreign and local investors should be free to invest and profit in an environment unencumbered by government preferences.
Pensions: Government's unprofitable funding of bankrupt funds should end. If Israelis are given the freedom and responsibility to choose a savings plan best suited for them, then those institutions with the best record of actuarial solvency will adequately serve their needs without help from the government.
Health care: The national health law, which has never actually been enacted in full accordance with the law, should be repealed and Israelis given the freedom to choose the health care they want.
Housing and land: Government control of the land business distorts pricing and unnecessarily taxes landowners. People should be allowed to decide where they want to live at reasonable prices.
Foreign aid: While it has helped in the past, foreign aid now feeds the overgrown bureaucracy and perpetuates a cycle of dependency. It should be cut back with the nation’s solemn commitment to end the receipt of all foreign aid within two years, specifically on July 4, 1998.
Education: Education is an economic and spiritual asset to the nation. Educational systems which fail to provide a quality education are not. Israel's collapsing educational system should be privatized to allow schools, teachers, and students to reach their full potential (see separate Jubilee Education plan).
In the end, we cannot maintain our independence if it is anchored to an economic foundation that makes it impossible for the people and the government to be self-reliant and self-ruling. The time has come for Israelis to make a fundamental choice: will we perpetuate the cycle of economic diminishment and dependency or will we move boldly and resolutely toward our long-promised inheritance and become a truly free and independent people?
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