Austerity kills

http://thebodyeconomic.com/

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Politicians have talked endlessly about the seismic economic and social impacts of the Great Recession, but many continue to ignore its disastrous effects on human health—and have even exacerbated them, by adopting harsh austerity measures and cutting key social programs at a time when constituents need them most. The result, as pioneering public health experts David Stuckler and Sanjay Basu reveal in this provocative book, is that many countries have turned their recessions into veritable epidemics, ruining or extinguishing thousands of lives in a misguided attempt to balance budgets and shore up financial markets. Yet sound alternative policies could instead help improve economies and protect public health at the same time.

In The Body Economic, Stuckler and Basu mine data from around the globe and throughout history to show how government policy becomes a matter of life and death during financial crises. In a series of historical case studies stretching from 1930s America, to Russia and Indonesia in the 1990s, to present-day Greece, Britain, Spain, and the U.S., Stuckler and Basu reveal that political mismanagement of financial crises has resulted in a grim array of human tragedies, from suicides to HIV infections to West Nile Virus and tuberculosis epidemics. Yet people can and do stay healthy, and even get healthier, during downturns. During the Great Depression, U.S. deaths actually plummeted, and today Iceland, Norway, and Japan are happier and healthier than ever, proof that financial shocks do not inevitably wreak havoc on public health.


Full of shocking and counter intuitive revelations and bold policy recommendations, The Body Economic offers an alternative to austerity—one that will prevent widespread suffering, both now and in the future.

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It's actually a pretty easy connection to make: you hurt both your available workforce by cutting costs in social welfare and you increase total costs due to the higher costs incurred by stuff like increased numbers in the ER, epidemics previously not possible (just look at the rising numbers of TBC in Russia) and so on (unless you believe in Eugenics, that is).

http://www.sueddeutsche.de/gesundhei...et-1.1713150-3

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Besonders peinlich wird es immer dann, wenn sie nachweisen können, dass der IWF, der ja nur so um sich wirft mit vermeintlich unumstößlichen Zahlen, Quoten, Prozentangaben, immer wieder irgendwelche Zaubervariablen in sein vermeintlich glasklares Kalkül hineinmischt: Wer hat festgelegt, dass Griechenland nur noch sechs Prozent seines Bruttosozialprodukts für den Gesundheitssektor ausgeben darf? Die Zahl ist reine Willkür, kein Arzt, kein Gesundheitsexperte wurde vom IWF bei der Festlegung zu Rate gezogen.

"Hätte man an die Austeritätsprogramme dieselben strengen Standards angelegt, mit der klinische Studien betrieben werden, wären sie längst ausgesetzt worden", schreiben die beiden Autoren am Ende. "Die Nebenwirkungen der Behandlung sind katastrophal und oftmals tödlich. Es konnte kein positiver Nutzen festgestellt werden."

Anfang Juni hat der IWF in einem Bericht eingestanden, dass die "bittere Medizin" in Griechenland extrem bittere Folgen hatte: Zwischen den eigenen Vorhersagen und der eingetretenen Realität gebe es einen "sehr großen" Unterschied, schrieb der IWF. Man habe für das Jahr 2012 fest mit einem ex gerechnet. Tatsächlich geht es weiter bergab, Griechenland befindet sich das fünfte Jahr in Folge in der Rezession.

Translation: The report becomes especially embarrassing when they can prove that the IMF, which throws quite a lot of numbers, quotas and percentages around, frequently mixes magic variables into its seemingly transparent calculations: Who exactly decided that Greece may only use six percent of its gross national product for the health care sector? This number is purely arbitrary, no doctor, no health expert was involved in setting this rate by the IMF.

"If you had applied the same strict standards to the austerity program which you normally use for clinical studies, you would have had to stop them quite a long time ago," both authors write at the end. "The side effects of the treatment are catastrophic and quite often lethal. No positive effect could be determined."

At the beginning of June the IMF had to admit that the "bitter medicine" had quite extremely bitter effects in Greece: There's a "huge disparity" between forecasts and actual reality, wrote the IMF. One expected an economic expansion in 2012. Instead, it's all downhill, Greece is in a recession for five years straight.

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What claptrap. I see nothing there about the fact that austerity is caused by mammoth overspending by the State or what alternatives there are. Apparently an alternative is there though its not mentioned: my alternative would be don't be so stupid as to get into the debt in the first place.

You may want to look at what your own country did after WW2...

Not to mention that your "advice" is a nice sentiment but unworkable. Unless you're a soothsayer who can tell with absolute certainty that policies you decide actually work out. You then might want to consider working for the IMF, because those guys don't seem to have much success on that particular front...

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Originally Posted by Khendraja'aro

You may want to look at what your own country did after WW2...

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Rebuilding after a total war like that is always going to be different to today.

We got via the Marshall Plan and other direct aid from the US the equivalent of over £160bn in today's money.

I think implementing rationing like after WWII would be less popular even than austerity.

But did or did you not have massive debts?

We did.

How are we supposed to convince the Americans to give us the cash and why even if we got it and implemented rationing would that be better than austerity? I think in a choice between limiting pay rises to 1% and other austerity measures taken and implementing post-WWII style rationing most would prefer what we're doing.

So you did have massive debts. How stupid of you.

Even if lowered government spending causes short term harm over the long term less government spending is nearly always good. Over government spending creates inefficient economies and produces individuals who depend on the government instead of themselves which leads to a voter base that continues to vote for "free" goodies until it becomes unsustainable (Greece).

You said what we did after WWII - what we did after it was try and reduce our wartime debts not expand them. I don't see how that's stupid.

In fact from the peak then public debt fell as a percentage of GDP (barring the occasional cyclical bump on the way down) consistently for half a century. By the time this recession hit was about the only peacetime occasion where debt was consistently rising to GDP during a boom. Yes, stupid. And I objected to the socialist stupidity at the time.

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Originally Posted by RandBlade

[...]Apparently an alternative is there though its not mentioned: my alternative would be don't be so stupid as to get into the debt in the first place.

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You were in massive debt. Thus you were stupid.

Don't try to weasel out.

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Originally Posted by Khendraja'aro

You were in massive debt. Thus you were stupid.

Don't try to weasel out.

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Don't be pathetic we were talking about the current era. I don't think the current era is remotely equivalent to WWII. The debt for WWII (and WWI) is a different story in a special circumstance in a different lifetime.

http://www.economicshelp.org/blog/wp...nt-1900-12.png
There were massive jumps in debt:GDP ratio during WWI and WWII. Since then during the good times debt/GDP has fallen and the long-term trend was distinctly down. Sometimes due to natural stabilisers during and just after busts it'd start to rise again (though not as high as the last bust) but due to it falling in the good times there was both room to grow and it wouldn't grow so badly.

This rule was broken in 2001 when Labour ignored over 50 years of history and started growing the debt during a boom. That meant the better part of a decade later when the crash finally hit debt had already been growing for a while - and there was no flexibility whatsoever in the budget so it started rising at such a rapid pace as had never been seen since at peacetime in the modern era.

Excuses, excuses. Now you're trying to weasel out when previously you were making bold and sweeping statements.

And now you're all: "Yes, but that's different and then and now and all-in-all..."

Excuses.

Because, you see, you're suddenly applying a different set of rules, namely: "Circumstances outside our control (there was a war going on)".

And, of course, pure chance never has anything to do with a country going bust or boom. Nope. It's always something like "hard work" and "vision" and stuff.

Rubbish. Just like the fortunes of a company sometimes are coupled to sheer luck, a country's fate may also be dependant on that fickle mistress. Because no one is able to foresee the future. Yes, we have those reports of the rich and famous as to how they were able to ride the tiger - but that's survivor's bias.

But that clashes with that work ethic: "Work hard and it will all work out well!"

Except, sometimes it doesn't. And sometimes one single decision may lead to one's doom - and that decision will stand out starkly. In hindsight.

Who the hell are you trying to kid? Yes the actions by the governments in the '00s were stupid (as I said at the time). In the UK that action was unprecedented post-war. No the fact that debt was incured during a World War does not make the slightest bit of difference to that.

If you think WWII correlates to today you're a lost cause.

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Originally Posted by Khendraja'aro

Excuses, excuses. Now you're trying to weasel out when previously you were making bold and sweeping statements.

And now you're all: "Yes, but that's different and then and now and all-in-all..."

Excuses.

Because, you see, you're suddenly applying a different set of rules, namely: "Circumstances outside our control (there was a war going on)".

And, of course, pure chance never has anything to do with a country going bust or boom. Nope. It's always something like "hard work" and "vision" and stuff.

Rubbish. Just like the fortunes of a company sometimes are coupled to sheer luck, a country's fate may also be dependant on that fickle mistress. Because no one is able to foresee the future. Yes, we have those reports of the rich and famous as to how they were able to ride the tiger - but that's survivor's bias.

But that clashes with that work ethic: "Work hard and it will all work out well!"

Except, sometimes it doesn't. And sometimes one single decision may lead to one's doom - and that decision will stand out starkly. In hindsight.

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Of course our inability to accurately predict the future would perhaps be a strong argument for ensuring that we aren't too fragile and vulnerable when disaster strikes. Some would say that keeping debt low and manageable is one way to reduce vulnerability. Others might argue that it's better to use debt to finance useful things that reduce vulnerability in the long term. Yet others might say that the solution is to send all the chavs off to the most desolate parts of the world.

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Originally Posted by Aimless

Of course our inability to accurately predict the future would perhaps be a strong argument for ensuring that we aren't too fragile and vulnerable when disaster strikes. Some would say that keeping debt low and manageable is one way to reduce vulnerability.

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As we had in every period prior to the '00s. When Gordon Brown was boasting that he had "abolished boom and bust". In a word: Stupid.

Anyone with two braincells to rub together won't try and excuse Brown by saying that Britain in the noughties is equivalent to Britain under the Blitz. Unless Khen isn't trying to be idiotic and is instead just trying to minimise the seriousness of WWII and the war with the Nazi's. Though I wouldn't think Khen would stoop that low it does seem the only reason he'd try that.

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Yet others might say that the solution is to send all the chavs off to the most desolate parts of the world.

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Sadly Australia won't agree to that anymore and we don't have any other islands like that.

Honestly, this "we can predict the future so that every country can stay debt free" is pointless. Not to mention that a debt-free country wouldn't be a really good thing from what I've heard.

And isn't really pertinent to the point the authors were making: If you find your country in debt killing off the people in it isn't really helping.

Which isn't what austerity is doing. Its just yet more nonsense trying to pretend this is optional.

So you reduce money for the social net and public health - and you don't think that doesn't have an adverse effect on the general physical and mental health of the population?

But I'm sure that the scarcity of basic medical necessities in Greek hospitals is doing wonders for the health of their patients!

Actually the money for health is increasing in the UK.

As for them: Greece is bust. Unless you want to bail them out they don't have much choice. Correction: They only have 2 choices: Austerity or default and print drachmas. Even printing drachma they might struggle to provide for their hospitals so what exactly do you propose oh font of all wisdom?

Actually a sack of rice has just appeared on Mars (Makes as much sense as your first sentence).

And whether they have a choice or not, my point still stands: Austerity kills. You still haven't adressed that point. You're just weaseling around here, trying to tell us that austerity poses no health problems at all. Which is moronic, given the evidence.

Fact is:
The death rate among children has risen by 40%.
HIC infections are on the rise.
Hospitals are lacking basic necessities like one-time gloves, desinfectant and pain killers.
40% of the population don't have any kind of health insurance anymore (you can guess what that means.
Diabetes is on the rise.
Cardiovascular illnesses are on the rise.
Suicides are on the rise.

This stands in stark contrast to your reality-denying, moronic statement that, and I quote you directly: "Which isn't what austerity is doing."

Penny wise, pound foolish, that's what it is.

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Originally Posted by RandBlade

What claptrap. I see nothing there about the fact that austerity is caused by mammoth overspending by the State or what alternatives there are. Apparently an alternative is there though its not mentioned: my alternative would be don't be so stupid as to get into the debt in the first place.

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Then you post charts showing UK's debt to GDP ratio decreased after WWII...and claim problems didn't start up again until '00? :weird: You shouldn't just gloss over other decades, changes in monetary policy, central banking, financial deregulation, creating the Euro, etc. And don't forget the Great Recession was a result of a global financial crisis.

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Originally Posted by Khendraja'aro

Honestly, this "we can predict the future so that every country can stay debt free" is pointless. Not to mention that a debt-free country wouldn't be a really good thing from what I've heard.

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Rand knows NO developed country operates debt-free (any more than businesses or households do) and that many 'investments' borrow today's money for the future. Things like infrastructure, education, healthcare, R & D don't work on a pay-as-you-go basis, and never did. He seems to be okay with UK spending more on health and NHS. ;)

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And isn't really pertinent to the point the authors were making: If you find your country in debt killing off the people in it isn't really helping.

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That might be more applicable to US "debt and deficit hawks" who want to cut to the bone, slash and burn entire programs. Especially social safety nets, public health initiatives, educational subsidies, assistance for the poor, youth, or elderly. But they're often clamoring to increase spending on military, border patrol, agricultural subsidies, corporate welfare, etc. :sour:

Could you explain what you mean what you write that 'NO ... household operates debt-free' ? I am pretty certain I could think of some examples of debt-free households if you aren't including paying outstanding bills on their due-date in your understanding of debt.

Can someone here please answer two questions? First, what exactly is austerity? And second, what alternative policy do you think Greece should have pursued? You can't say something "kills" unless it results in more deaths than the alternatives.

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Originally Posted by Loki

Can someone here please answer two questions? First, what exactly is austerity? And second, what alternative policy do you think Greece should have pursued? You can't say something "kills" unless it results in more deaths than the alternatives.

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One could also say that unrealistic expectations of life kill. If Greeks (and others) who couldn't really afford it wouldn't have indebted themselves in quite the way they did, they now would have the ability to cope with their problems.

Do we have figures that tell us how mortality rose in Estonia when they went through real austerity rather than the faux-austerity we see in Greece, Portugal and Spain?

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Originally Posted by Loki

Can someone here please answer two questions? First, what exactly is austerity?

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Well in the UK "austerity" is increasing spending at a slower rate. In other nations its actually being cut.

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And second, what alternative policy do you think Greece should have pursued? You can't say something "kills" unless it results in more deaths than the alternatives.

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I've asked repeatedly without any answer I doubt you'll have much more luck. Apparently something about rebuilding from Nazi bombing campaigns, rationing and getting hundreds of billions in aid from the Americans is an alternative - not sure why as Merkel isn't exactly a Nazi, even Greece doesn't have post-war style rationing and America doesn't seem to be reaching for the chequebook any time soon.

But that'd be to think logically. Can't have that.

Yes, because that's soooo pertinent to the points the authors were making. But nice to see that you've recognized the problem in your logic.

There is no problem in the logic. And despite your wishy-washy avoidance of the matter no alternative has been provided by either you or the OP quote. Well except for rationing, bailing out by foreigners and post-Nazi reconstruction.

Of course there's a problem in your logic. You're applying your household-logic (no debt! Never!) to states.

Of course now you can explain to us why Greece's expenses for the medical sector have to be reduced to 6% of the GNP?

Before I do please say where I said "No debt! Never!" Because I actually said nothing of the sort.

It's pretty clear cut: Greece was bankrupt. Greece had no money to spend. You can't call a policy "austerity" when it simply involved spending what ever money Greece could access. It couldn't run a deficit because no one would lend it any money. So I really want to know what the alternative was. Spending more money was never an option. This is like blaming a homeless person's situation on him not renting an apartment.