Global Economy/Global Health

Thousands of risky mortgages were made in the United States, which caused. . . . .

many financial institutions to lose money, which caused. . . . .

decreased prices for financial institution stock, which caused. . . . .

massive layoffs and mortgage foreclosures, which caused. . . .

depressed consumer spending in the U.S., which caused. . . . . .

great pessimism among retailers, which caused. . . . .

great pessimism among wholesalers, which caused. . . . .

great pessimism and retrenchment among manufacturers and home builders, which caused. . . .

irrational equity sell-offs in the United States, which caused. . . . . .

irrational investor panic worldwide, which caused. . . . . .

the American President to suggest increased government spending to stimulate the economy, which caused. . . . .

virtually nothing, which caused. . . . .

the Federal Reserve to cut interest rates in the United States, which will cause. . . . . .?

Who knows where this economic tsunami will end. It has been interesting to watch this scenario unfold. What should have been the equivalent of a stone thrown into a pond causing a series of diminishing ripples, has turned instead into a tidal wave of equity divestiture. The mortgage problems have been known for months. Didn't the investors who are fleeing the securities markets today in panic not understand that we live in a global economy in which the United States is still a huge player? Do they not know that security prices go down as well as up? Do they choose to live in blissful ignorance until a down day in the equity markets slaps them in the face? Lack of investor sophistication could leave the world's economies in much worse condition than current conditions rationally suggest should be the case.

This is a good time to ask what this economic news means for global health. Certainly, we can anticipate that the U.S. government is going to be pressed to limit spending that does not directly stimulate the American economy, especially in this election year. The phrase I have not heard uttered in the past two days is national debt. But the American national debt cannot be ignored. As soon as the dust begins to settle, financial conservatives will certainly resurrect the national debt issue. And with good reason. The recent slide in the value of the U.S. dollar is largely due to the size of the national debt. The economic stimulus packages that have been proposed will add to that bloated debt. The economy is like the athlete that takes an analgesic to be able to stay in the game although s/he has a painful injury. But in the long run, decreasing the athlete's pain so s/he can continue playing results in a much worse long-term injury. We may be able to keep an impending recession from being so deep by increased government spending, but does the added debt load worsen the economy's long-term prognosis? It takes a more learned economist than I to answer that. But I have serious concerns about using economic band-aids to treat massive trauma.

For the expiring PEPFAR program, the timing could not be worse. Advocates for global health are in danger of having their voices of concern smothered by the screams of the economically frightened. Global health, however, is not something that can be pursued only when the good economic times are rolling. It is a long-haul endeavor that must be supported through all kinds of economic conditions.