Israel's Fischer urges continued tax cuts

Pretty soon Israel is going to be more capitalist than America
Nov. 21, 2008

I love Stanley Fischer, governor of the Bank of Israel. He said something yesterday so logical as he was commenting on the economic stimulus package before the parliament: Cut taxes, stimulate the economy, give the public disposable income. And, to practice what he preaches, Fischer cut interest rates here to 3 percent.

Such logic, however, appears to be lost on the United States of bailouts and NYC’s Mayor Taxman Bloomberg, allegedly trying to “save” the American economy.

It is vital that all possible measures be taken, within the budgetary framework, to encourage real activity in the economy, and to give the business sector, especially small and mid-size businesses, easier access to credit facilities,” Fischer said. “It is important to move forward with the planned reduction in tax rates alongside these measures.”

This is the opposite direction in which the U.S. is moving. Israel’s government and economy has its roots in socialism. But between Benjamin Netanyahu as finance minister and now Fischer, the country is reducing government regulation and has broken up government-run monopolies, trying to increase competition.

Don’t get me wrong: Israel still has a national health care system, and it is not recommended. And the banks here still charge 70 fees for services, down from 300! Israel is far from capitalist. But Fischer seems to know a lot better how to simulate the economy as opposed to the bailout Senate and Congress in D.C.