Even if the euro bloc is miraculously saved, it is still likely that Israel will have to deal with the economic crises of countries to which we export. With half of Israel's national product stemming from exports, the economic crisis in Europe will lead to shrinking economic activity and unemployment. There is also some fear about the stability of international currencies, for which we must prepare nationally and individually. The Finance Ministry and the Bank of Israel are, of course, both preparing a plan in the event of a crisis, but that is not enough. These institutions are not prepared for essential reforms in the anti-manufacturing structure of the Israeli market. They are too preoccupied with preserving the status quo. This bloated government needs to be reformed; it is the source of most of the problems in our economy, including the misallocation of credit, unstable labor relations and a lagging construction sector. To deal with the impending crisis, we will have to improve our country's competitive edge in the exports market. Only a comprehensive effort to increase economic efficiency, which will significantly reduce production input, can achieve this. Here are few essential steps we must take: A reduction in the bloated government's spending will lead to billions of shekels in savings. This would allow for a reduction of taxes during the crisis, instead of raising taxes and strangling economic growth. The government must ease cumbersome bureaucratic regulation, which wastes resources and harms mostly small businesses. The government must also open the market to competitive imports. A combination of increased competition and steps to increase efficiency can lead to a quick reduction in expenses and strengthen our competitive abilities. Prices in Israel today, including employers' labor costs and the price of raw materials and services, is much higher than abroad. There are also national projects whose acceleration could be beneficial, like moving army training bases, their command staffs and security establishment facilities to the Negev Desert, for example. With respect to coping on an individual basis: Israelis believe that the government will not only ensure wealth and happiness, but will also protect them from all evil. This is despite the fact that successive Israeli governments have created and a preserved a political-economic-social method that transformed a talented people (note the number of Israeli start-ups) into a nation that is lagging economically. Skilled workers here often earn a meager salary. Public systems, including security, education, law and health, don't function properly; there are massive and widening gaps between the rich and the poor, and corruption abounds. It would serve us best not to trust the government, but rather to take responsibility and deal with the impending risks ourselves. Today there is an abundance of accessible and trustworthy information on how to insure our savings, from investing in relatively safe bonds to investing what is customary during a crisis: gold coins and precious metals (or their investment funds). These have traditionally protected our savings from rampant inflation, the likely result of minting massive amounts of new money.
