In 2005, for example, some NIS 33 billion – 15 percent of the total government budget – was to cover debt interest payments, and this is the second largest item after defense spending. The smaller the debt, the lower the interest payments become and the government can direct more money to those other needs of the economy, social problems and all.
We are very proud, and rightly so, of the impressive advance made in reducing the government budget deficit in recent years, but the actual budget situation is not as good as we think. And when I say that I refer to a problem of definition and measurement of the budget deficit. What exactly do I mean?