Academics present evidence that austerity really does kill

Ontario is presently entering year two of its austerity program, convinced that it is the only way out of an economic problem that wasn’t even created here.

We have previously highlighted economic arguments that suggest austerity creates a self-defeating “fiscal drag” that compounds debt and deficit problems. Now a new book by a pair of academics on either side of the Atlantic argues that not only is austerity self-defeating, but it is also bad for your health.

In The Body Economic: Why Austerity Kills, David Stuckler and Sanjay Basu present a convincing analysis that austerity policies have made citizens involuntary subjects of a grand experiment in public health. If you recently lived in the UK, Greece, Spain or Italy, you’ve likely recently witnessed very different population health outcomes than if you lived in Sweden, Iceland or Denmark.

The authors argue that this is not the first time this austerity versus stimulus experiment has taken place. In the U.S. States that adopted the depression-era “New Deal” stimulus programs had much better health outcomes than those that refused to do so.

“Economic choices are not only matters of growth rates and deficits, but matters of life and death,” the authors write.

In their peer-reviewed study, the pair of PhDs state that investment in the right programs can not only alleviate human suffering, but can itself spur economic growth. For every $1 invested in public health programs, the net benefit to the economy is $3. By anyone’s standards, that’s a sweetheart deal. Yet ideology prevents us from seeing the evidence before us.

Calling Greece a public health disaster, the authors note imposed austerity cuts have meant a 52 per cent rise in HIV, a doubling of suicides, rising homicides, and a return of malaria as needed health programs were cut. Hospital admissions soared after Greeks refused to get the care they needed and the infant mortality rate grew by 40 per cent.

Iceland, experiencing a worse economic recession than Greece, instead chose the stimulus route and enhanced its social safety net during tough times. They experienced no adverse health effects from their recession – in fact, health outcomes actually improved. Greece is still an economic disaster because of the politics of austerity. Iceland has mostly recovered.

Greece is not the only disaster zone. In some U.S. counties the average life expectancy has gone down for the first time in four decades. Yet overall the Obama stimulus program has restarted the U.S. economy, unlike Britain’s austerity program, which has pitched it into a triple-dip recession and left an even larger debt.

“As scholars of public health and political economy, we have watched aghast as politicians endlessly debate debts and deficits with little regard for the human costs of their decisions,” the two wrote in a recent op/ed in the New York Times.

It will be interesting to see how Canada fairs. Originally we were among the stimulus nations, but now both the Federal and provincial government have decided to reverse course and implement austerity, throwing thousands of public sector workers out of a job and their families into turmoil.

Early results are in on economic performance – the Ontario budget noted that the economy has started to once again slow beyond the government’s expectations – policy-makers failing to connect it to the U-turn in economic policy. While they didn’t predict it, we did note more than a year ago that such policies would have an effect on overall economic growth.

Did Ontario’s political elite learn anything? For all the austerity imposed by the Wynne government, the Hudak PCs would like to balance the budget even faster – no doubt at the cost of the lives of some Ontarians.

In a country where about two-thirds of health care costs are borne by the public sector, and where health care routinely takes up about 40 per cent of provincial budgets, what will the impact be on health costs if we ignore the evidence and continue to go down the austerity road?

In Greece they had a dramatic rise in hospital use. Ontario thinks it can freeze hospital base budgets for the next four or five years to implement its more modest austerity plan.

During the Harris years the tipping point was ambulances circling Toronto seeking an open ER. What will the new tipping point be this time, and how many people will have their lives cut short to pay for an ideological fix that doesn’t work?

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