March 14, 2010

THE AMERICANIZATION OF ISRAEL:

In Israel, business takes the lead: Market reforms and a high-tech push have boosted business in Israel, reducing the role of government. (Stefan Karlsson, 3/14/10, CS Monitor)

[I]srael's economy has boomed since 2003. Between 2003 and 2009, GDP growth averaged 4% per year, far more than in just about all other Western economies. Even if you adjust for Israel's high population growth, per capita GDP growth was a impressive (Since it includes the crisis years of 2008 and 2009) 2.2%.

Because of the boom, the reduced need for military spending and a deliberate policy of reducing the role of government, government spending has dropped significantly as relative to the size of the economy. Between 2003 and 2009, government consumption fell from 27.8% of GDP to 24.2%. Military spending in particular fell, from 8.6% of GDP in 2003 to 6.5% in 2009, but non-military government consumption also fell, from 19.2% to 17.7%.

Government spending and tax rates are now lower than in most Western European countries, even including military spending, and even more so excluding it. And after the Bush tax cuts expire next year, the top income tax rate (at 45%, scheduled to be reduced to 44% in 2012 and 39% in 2016) will be lower than in many American states, including California and New York. And the corporate income tax rate will be lower than in all American states.


The benefits of Bibi having been in DC during the Reagan era.

Posted by Orrin Judd at March 14, 2010 7:12 AM
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