Thursday, April 18, 2013

Fwd: qotd: Greece's crucial lessons on austerity and health

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Subject: qotd: Greece's crucial lessons on austerity and health
Date: Thu, 18 Apr 2013 13:16:46 -0700
From: Don McCanne <>
To: Quote-of-the-Day <>

American Journal of Public Health
Published online April 18, 2013
Economic Crisis, Restrictive Policies, and the Population's Health and
Health Care: The Greek Case
By Elias Kondilis, MD, PhD, Stathis Giannakopoulos, MD, PhD, Magda
Gavana, MD, PhD, Ioanna Ierodiakonou, MD, PhD, Howard Waitzkin, MD, PhD,
and Alexis Benos, MD, PhD

The global economic crisis has affected the Greek economy with
unprecedented severity, making Greece an important test of the
relationship between socioeconomic determinants and a population's
Suicide and homicide mortality rates among men increased by 22.7% and
27.6%, respectively, between 2007 and 2009, and mental disorders,
substance abuse, and infectious disease morbidity showed deteriorating
trends during 2010 and 2011. Utilization of public inpatient and primary
care services rose by 6.2% and 21.9%, respectively, between 2010 and
2011, while the Ministry of Health's total expenditures fell by 23.7%
between 2009 and 2011.

What to Learn from the Greek Case

It is tragic that Greece has become an important test regarding the
impact of economic and social determinants on a population's health and
well-being. Evidence presented indicates that economic recession and its
consequences (unemployment, poverty and social exclusion, homelessness,
and insecurity) exert important effects on Greece's population health
and health care services. Several causes of mortality and morbidity
related to mental health, substance abuse, and infectious disease
already show clear rising trends. Heightened needs and increased demand
on public services collide with austerity and privatization policies.


The New York Times
April 17, 2013
More Children in Greece Are Going Hungry
By Liz Alderman

Last year, an estimated 10 percent of Greek elementary- and
middle-school students suffered from what public health professionals
call "food insecurity," meaning they faced hunger or the risk of it,
said Dr. Athena Linos, a professor at the University of Athens Medical

(Principal Leonidas) Nikas has taken matters into his own hands and is
organizing food drives at (his) school. He is angry at what he sees as
broader neglect of Greece's troubles by Europe.

"I'm not saying we should just wait for others to help us," he said.
"But unless the European Union acts like this school, where families
help other families because we're one big family, we're done for."


April 2013
Child Well-Being in Rich Countries

Rank of child well-being in 29 nations of the industrialized world

25th - Greece
26th - United States


National Bureau of Economic Research (NBER)
January 2010
Growth in a Time of Debt
By Carmen M. Reinhart, Kenneth S. Rogoff

Our main findings are: First, the relationship between government debt
and real GDP growth is weak for debt/GDP ratios below a threshold of 90
percent of GDP. Above 90 percent, median growth rates fall by one
percent, and average growth falls considerably more.


University of Massachusetts Amherst
Political Economy Research Institute
April 15, 2013
Does High Public Debt Consistently Stifle Economic Growth? A Critique of
Reinhart and Rogo ff
By Thomas Herndon, Michael Ash, Robert Pollin

Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that
coding errors, selective exclusion of available data, and unconventional
weighting of summary statistics lead to serious errors that inaccurately
represent the relationship between public debt and GDP growth among 20
advanced economies in the post-war period. They find that when properly
calculated, the average real GDP growth rate for countries carrying a
public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not
-0:1 percent as published in Reinhart and Rogo ff. That is, contrary to
RR, average GDP growth at public debt/GDP ratios over 90 percent is not
dramatically different than when debt/GDP ratios are lower.

Overall, the evidence we review contradicts Reinhart and Rogoff 's claim
to have identified an important stylized fact, that public debt loads
greater than 90 percent of GDP consistently reduce GDP growth.

Comment: Greece's austerity program, accompanied with privatization of
public health services, is having tragic consequences, reflected in the
health of the people. Not only is health care impaired, the children are
going hungry! It is particularly tragic when you consider that there are
solutions to their economic crisis, other than austerity, that would
keep their children fed and in good health.

The world-wide austerity movement received a big boost with the
publication three years ago of the paper by Carmen Reinhart and Kenneth
Rogoff supposedly showing that public debt to GDP ratios over 90 percent
resulted in considerable declines in the growth rate of the economy. The
"austerians" were off and running. Paul Ryan even included the concept
in the budget passed this year by the Republican-controlled House of

The problem with the Reinhart/Rogoff thesis is that it is flat-out
wrong. The paper by Thomas Herndon and his colleagues proved to be a
bombshell that refuted the R/R doctrine and demonstrated that "average
GDP growth at public debt/GDP ratios over 90 percent is not dramatically
different than when debt/GDP ratios are lower." Economists and policy
makers are in a frenzy, and let's hope that it results in a conclusion
that transitional resolutions to economic crises require the use of debt
to prevent austerity measures that negatively impact the most basic of
needs for the people.

So when we look at the UNICEF rankings of child well-being in
industrialized nations, we are saddened by the fact that Greece ranks
25th amongst 29 nations. If the European Union had a little heart, they
would be helping their sister country pull out of the crisis without
extracting a requirement that Greece raises its misery index.

(Excuse the deliberate deception, but it is to make a point. The misery
index is a combination of high unemployment and high rates of inflation.
Yet inflation is very low, but the austerians are convinced that it
should be high even if it isn't, and so they are acting accordingly -
more austerity!)

At least in the United States we are smart enough to not let our budget
deficits shift us into an austerity mode. Or are we? President Obama is
now negotiating with Republicans to cut back on two of our most
successful social programs - Social Security and Medicare, as part of an
austerity program.

Where do we stand now? The UNICEF ranking of child well-being has placed
the United States in the 26th position, below Greece! More austerity is
the very last thing we need!

For those who have been feeling so smug as we look at Greece's tragic
circumstance, think again! Then fire the austerians! It's a matter of
social justice.

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