Menachem Begin's government did not finally collapse in Israel this past week as it might have done, but there was no longer much doubt that the Begin policy of building a greater Israel had reached the end of its road.
The evidence was in the statistics.
Israel's inflation rate has reached 134 percent, the highest known in the world today.
Unemployment is rising; up from 2.8 percent three years ago to 4.1 percent at the turn of the year.
Immigration is down. Emigration is up.
Result: a Cabinet crisis decisive enough to indicate an early election and an almost certain change to a new government that must find a way to some alternative to the Begin policy of tacit annexation.
The specific cause of the political crisis was a dispute over teachers' salaries and their impact on the already raging inflation. But still more serious in the background was the question of population flow.
The Cabinet clash followed by a week the disclosure by a semi-autonomous agency that the number of Israeli Jews who have left Israel is now somewhere around a half million persons. This set-off a debate in the Knesset during which Deputy Prime Minister Simcha Ehrlich called the exodus of Jews from Israel "the most important national problem facing the country."
The implication is that Israel, which is theory has over 3 million Jews, probably has more nearly 2.5 million. There are nearly 2 million Arabs in the occupied territories and Israel. How long could policies survive that point toward financial bankruptcy and accelerate the time when Arabs could outnumber Jews?
Here is the population story in more detail.
Previous to 1973 roughly 95 percent of all Jews getting out of the Soviet Union went to Israel through an Israeli-controlled refugee center in Viewnna. The turn of that tide came in October 1973 when, following a terrorist attack, the Austrian government took over control of the refugee center. The refugees were then free to choose. A rising number chose New York. By 1977, 58 percent of the new arrivals chose any place but Israel. In 1980, 65 percent were going elsewhere, mostly to the United States.
Prime Minister Begin sought to stem that tide by asking Jewish organizations in the US to fund travel to the US only for Jews with first degree relatives living in the US. The majority of new arrivals continued to prefer refuge elsewhere than in Israel.
More significant was the official disclosure by Israel's Jewish Agency, a semi-autonomous agency for immigration and resettlement, that somewhere between 300,000 and 500,000 Jewish citizens of Israel now live in in the US.
There are no reliable statistics on the outflow of Jews from Israel. Israle's Central Bureau of Statistics puts the rate now at 16,000 per year, although it may have reached 18,000 during 1980. That compares with an official immigration of 21,000 during 1980. But many of the emigrants are people who announce a trip somewhere -- and don't come back.
Some US government officials believe that the outflow is now actually greater than the inflow and that Israel in fact is already experiencing a decline in Jewish population. The Arab population continues to increase.
The implications are clear. The Begin policy of expanding Israel's frontiers by de facto annexation of occupied Arab territory is straining Israel's resources to the breaking point. There simply is not enough money coming into Israel from exports, plus overseas Jewish contributions plus the annual US support now running at about $3 billion per year, to keep Israel's economy afloat.
Besides, the Begin policy means the possibility of another Arab-Israel war. This requires heavy military expenses. about one-third of Israel's budget goes to the armed services.
The prospect of more war is the reason why so many Jewish refugees from the Soviet Union choose to go elsewhere. And it is also a reason for the migration of jews out of Israel. Some in this new outflow are young persons of military age. Some have given the desire to avoid military service as the reason for their migration.
While making peace with Egypt under Camp David formula, Mr. Begin also has annexed the Arab community of east Jerusalem, has steadily planted ever more jewish settlements through Arab west Bank lands, has expanded existing Jewish settlements, and has avoided any commitment to home rule for the Arabs of the West Bank and Gaza.
Such a policy could be viable -- provided the US would underwrite the costs. But the Carter administration balked at anything over $3 billion for the annual US support in grants and loans. And there is no assurance that the incoming Reagan administration would be more generous at a time when the US economy still depends heavily on Arab oil.
There has been a change in the US attitude toward the Middle East. Mr. Begin's political crisis is occurring when US preoccupation with Middle East affairs has gone through a change of perspective. A decade ago Israel was the main Middle East fact in US thinking. Today, access to oil is the main Middle East fact in US thinking.
Israelis argue that US government plans for military deployment in the Middle east require bases in Israel. But in actual Pentagon practice the search is for bases in Egypt, Somalia, Kenya, and Saudi Arabia rather than in Israel.
The result over this past week of unstemmed inflation, rising unemployment, and a second exodus of Jews from Palestine, was yet another Cabinet crisis. The minister of education demanded higher wages for teaches. The minister of finance insisted that the economy could not stand another wave and wage rises. Mr. Begin sided with the minister of education. The minister of finance resigned.
The probable result is a June election, a new Labor government, and a gradual and tacit withdrawal from Begin policy. But there can be little doubt that this is the end of the road for that policy.
The only thing that could revive it would be a massive new US subsidy to Israel. Is Mr. Reagan likely to approve that subsidy at a time when he wants to cut the federal budget and give his camp followers the tax cut they ha ve been promised?