In midst of worst Budget deficits since WWII.... Twenty F-35s to not build a trailer park for 3 months?
Israeli settlement
THERE are some well-recognised problems with paying people not to do things, as opposed to paying them to do things. These problems crop up, for example, with carbon offset programmes, as James Bushnell explained in a recent paper for the NBER. Paying people not to emit carbon requires determining a baseline of how much carbon they would have emitted if you hadn't paid them anything. The payments create an incentive for them to inflate these baselines. If developing countries get paid for every ton of carbon they don't emit, their best strategy is to put together a credible estimate showing that absent the payments, they would be cutting down their tropical rainforests, dousing them in crude oil, piling empty aerosol cans on top and setting the whole thing on fire. Fortunately, this is pretty close to what many developing countries are doing, so the baseline estimates probably aren't too far off.
The United States doesn't have an official system of mandatory (as opposed to voluntary) carbon offsets. But Haaretz's Amos Harel reports we've decided to apply similar logic to the Middle East peace process by paying Israel not to build settlements on the West Bank.
The list of defense-related and other gifts the U.S. administration is willing to offer to Israel in exchange for three months of construction freeze in the settlements raises suspicions that someone has gone mad. An additional extension of the freeze, which he has previously rejected out of hand, may spell a political and ideological headache for Prime Minister Benjamin Netanyahubut the offer by U.S. President Barack Obama is very enticing. The addition of 20 F-35s to the package discussed two months ago tips the balance very clearly. From Israel's point of view, it is an offer that cannot be refused.
The extra aid is worth $1.3 billion, but the medium of payment adds an extra element of piquancy. Paying for peace negotiations in fighter planes is a bit like paying for carbon offsets in Hummers. In any case, the perverse incentives are obvious, particularly given that Israel's end of the deal here seems to be a promise to refrain from building more settlements on the West Bank...for three months. At 20 F-35s for three months, the Israelis must figure if they just drag these negotiations out for as long they've already gone on, their Air Force will be bigger than ours. And just imagine what the Americans will give them not to bomb Iran!
http://www.economist.com/blogs/democracyinamerica/2010/11/israeli_settlements
Israeli settlement
THERE are some well-recognised problems with paying people not to do things, as opposed to paying them to do things. These problems crop up, for example, with carbon offset programmes, as James Bushnell explained in a recent paper for the NBER. Paying people not to emit carbon requires determining a baseline of how much carbon they would have emitted if you hadn't paid them anything. The payments create an incentive for them to inflate these baselines. If developing countries get paid for every ton of carbon they don't emit, their best strategy is to put together a credible estimate showing that absent the payments, they would be cutting down their tropical rainforests, dousing them in crude oil, piling empty aerosol cans on top and setting the whole thing on fire. Fortunately, this is pretty close to what many developing countries are doing, so the baseline estimates probably aren't too far off.
The United States doesn't have an official system of mandatory (as opposed to voluntary) carbon offsets. But Haaretz's Amos Harel reports we've decided to apply similar logic to the Middle East peace process by paying Israel not to build settlements on the West Bank.
The list of defense-related and other gifts the U.S. administration is willing to offer to Israel in exchange for three months of construction freeze in the settlements raises suspicions that someone has gone mad. An additional extension of the freeze, which he has previously rejected out of hand, may spell a political and ideological headache for Prime Minister Benjamin Netanyahubut the offer by U.S. President Barack Obama is very enticing. The addition of 20 F-35s to the package discussed two months ago tips the balance very clearly. From Israel's point of view, it is an offer that cannot be refused.
The extra aid is worth $1.3 billion, but the medium of payment adds an extra element of piquancy. Paying for peace negotiations in fighter planes is a bit like paying for carbon offsets in Hummers. In any case, the perverse incentives are obvious, particularly given that Israel's end of the deal here seems to be a promise to refrain from building more settlements on the West Bank...for three months. At 20 F-35s for three months, the Israelis must figure if they just drag these negotiations out for as long they've already gone on, their Air Force will be bigger than ours. And just imagine what the Americans will give them not to bomb Iran!
http://www.economist.com/blogs/democracyinamerica/2010/11/israeli_settlements
