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Austerity Kills: Crippling Economic Policies Causing Global Health Crisis

Economist David Stuckler and physician Sanjay Basu examine the health impacts of austerity across the globe in their new book.

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Amy Goodman: We were just joined by the Icelandic Parliamentarian  Birgitta Jónsdóttir onDemocracy Now! here in New York—she had just come in from Iceland—talking about how Iceland recovered from the collapse of its banking system. A part of what the country did, as you said, was to preserve its universal healthcare system.

Birgitta Jonsdottir:  Actually, everybody has the same access to health and education. So even I, as an MP, ended up in a hospital in November, and I got exactly the same treatment as the woman working in the factory or in McDonald’s or Domino’s. And I like that. I love that. I think that is so important. And so, we pay just about the same amount of taxes as U.S. taxpayers. We don’t have to live in this insurance jungle. So we just, you know—and that was actually one of the first things they wanted to slash down, the IMF—no surprise.

Amy Goodman: They preserve their healthcare system.

Dr. Sanjay Basu: Mm-hmm. And indeed she highlights one of the key issues here, which is that there’s a great misunderstanding around debts and deficits. When we face a liquidities crisis, meaning that there’s a collapse in demand in the system, we actually find, quite robustly, through peer-reviewed journals and consistent with those of our colleagues, that stimulus early on does not actually produce higher, longer-term debts, but it generates the revenue and the building of the economic cycle that allows us to pay off those longer-term debts. By contrast, these short-term cuts end up so slowing the economic cycle that we find both economic and public health devastation as a result.

Amy Goodman: After break, I want to talk about the U.S., but, David Stuckler, you said you looked at the labor policies of places like Sweden and Finland in times of recession.

David Stuckler: It’s a remarkable case study. It alludes to what Sanjay mentioned earlier. Sweden faced a large banking crisis. Unemployment jumped by more than 10 percentage points. And yet suicides fell steadily. What we learned is that when politicians managed the consequences of unemployment well, they were able to prevent a mental health crisis. The specific programs we found are called active labor market programs. These help the newly unemployed link to caseworkers, develop an action plan and return into jobs. They treat unemployment like the pandemic it is. It not only saves money on healthcare bills, but even pays for itself by helping spur economic recovery.

Amy Goodman: We’re going to talk about what choices the United States is making, with David Stuckler and Sanjay Basu. Their book is called The Body Economic: Why Austerity Kills. Stay with us.

[break]

Amy Goodman: The Centers for Disease Control and Prevention recently revealed the suicide rate in people aged 35 to 64 rose by nearly 30 percent over the past decade, to 17.6 deaths per 100,000. The biggest increase was seen for men in their fifties, where the suicide rate increased 50 percent. Overall, suicides are now a greater cause of death in the United States than car accidents.CDC Director Thomas Frieden recently spoke to PBS NewsHour.

Dr. Thomas Frieden: We don’t know what specifically is causing it, but the trend has been consistent. And, if anything, our numbers would underestimate the gravity of the problem. And, of course, even one death from suicide is a terrible tragedy, and many of them are preventable. We know that in times of financial stress, there is generally an increase in suicides. We also know that this is a generation that grew up at a time when they expected more than some have been able to achieve in their lives, and also that they’re stressed with what their kids are going through and what their parents are going through. So it’s, in some ways, the sandwich generation.

 
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