Steinitz in Message to Obama? ‘Costly Stimulus Slows Recovery'
Finance Minister: “Never sacrifice the future of your economy in order to save it in the present because you will kill both.”
By Gil Ronen
First Publish: 6/20/2011, 8:03 PM / Last Update: 6/20/2011, 8:27 PM
“Never sacrifice the future of your economy in order to save it in the present because you will kill both,” Israel’s Finance Minister Yuval Steinitz said Monday, at the Israel Democracy Institute’s annual Caesarea Conference.
In what some might see as hinted criticism of United States President Barack Obama’s method of dealing with the financial crisis in his country, Steinitz said: “If you give incentives or stimulus plans that are unsustainable for too long, they won’t work. On the contrary, if people realize that in two or three years [they] are going to pay for it, and recovery will be very slow because of this, this will be counterproductive.”
“When most countries reduced taxes in order to [stimulate] the economy in the middle of the crisis,” he explained, “we raised taxes temporarily. But at the same time we committed ourselves to seven years of tax reduction – starting now.”
Citing new investments by Intel and Barclays Bank, Steinitz said that in a crisis or following one – the most important thing is “not just to go to speedy recovery or to a nice growth tempo but to bring back investments in the real economy.”
The conference is being held at the College of Management Academic Studies at Rishon LeZion.