The News Behind The News
February 13, 2001
How Israelis Can Live Beyond Their MeansEach month, the Central Bureau of Statistics reports import and export figures for Israel. In January, imports were $3 billion, while exports were a much smaller $2.4 billion, resulting in a trade deficit of $554 million.
A trade deficit of $554 million is not a one-time event. In fact, Israel runs trade deficits every month, year-in and year-out. At January’s pace, the trade deficit for 2001 will come to about $6.6 billion.
How can Israelis afford to import $6.6 billion more than they export? Where does this money come from?
The answer is simple. U.S. aid provides $3-4 billion every year. Several billion dollars more arrive in the form of German reparations, institutional remittances, individual remittances, and other transfers. The rest of the world makes up the difference in free money.
Despite an economic slowdown, Israelis keep importing consumer goods and cars as if there is no tomorrow. Perhaps there is no tomorrow. But it helps if others kick in $7 billion or so a year in free money.
If welfare reform was good for Americans, perhaps it might also be good for Israelis. Two years and off the dole
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