The U.S. has experienced a spike in deaths that hasn’t been seen in other developed nations. These deaths amount to about 500,000 people who have died prematurely and spiked mortality rates. According to Angus Deaton, one of the authors of the study, the deaths may be due to an increase in economic insecurity among white middle-aged Americans. They seem to have “lost the narrative of their lives,” or experienced a significant loss of economic opportunity. The increased mortality comes from an increase in suicide which stems perhaps from a “loss of hope”. And that increase in suicide rate has been seen, according to Deaton, in every education demographic. Here’s a link from Vox, “Nobel Winner Angus Deaton Talks About the Surprising Study on White Mortality He Just Co-Authored” by Julia Belluz on November 7, 2015. Here’s another link from The Atlantic, for a similar article entitled: “Middle Aged White Americans Are Dying of Despair,” by Olga Khazan.
Making a list of recent economic harms that have hit this group of Americans would lead a thoughtful person to consider more than a single negative event. Here are some economic negatives that have increased economic insecurity for middle-aged Americans:
(1) The easy money policy (low interest rates) of the Federal Reserve has led to enormous debt and also the hostile takeovers of businesses and job losses.
(2) The subprime mortgage crisis (which happened because of banking deregulation) caused many people to have foreclosures that meant the loss of their capital investment in a home. They also lost their home.
(3) This group has also been harmed by Zero Interest Rate Policy that has undermined the interest they could have earned in their savings accounts.
(4) And of course there have been losses of employment in this group after the Great Recession. According to a recent statement by Carly Fiorina, more small businesses have been closing their doors than new small businesses have been opening. That means that small businesses can’t contibute to employment the way that they did in the past.
(4) A high tax rate including additional taxes for the ACA has hurt this age group.
(5) Constant inflation undermines the value of money at every moment. The Federal Reserve has a current policy of constant “low level” inflation but that differs from their earlier policy of no inflation under the Humphrey Hawkins Act (which also sought full employment). (The Federal Reserve abandoned full employment and no inflation decades ago).
Economic policies have long-term and widespread effects. A more centralized economy wastes resources because governments can’t use economic resources efficiently. Desperation has increased to dire levels for some groups who are suffering enough to end their lives. That loss of life is a warning that shows that government policies are hurting people. More government intervention in the economy will likely increase harms. Imagining that more government interventionist policies can fix the harms caused by government intervention is foolhardy.
Americans who want more government programs to ensure that people have (1) free community college (2) free healthcare (3) continuing social security, and medicare don’t look at the 19 trillion dollars of government IOU’s. Although monetarists have believed that the government has an unlimited power to create money, the recent spike in mortality shows that there are negative consequences. People who want free programs, of course, just want what they want. But there isn’t really a “free” education or “free” healthcare. There are economic consequences when the government passes more and more legislation that increases government spending. Losses of gainful employment and the failure of people to thrive in our economy shows people being hemmed in by government intervention. Remember when you vote that people can’t live without economic hope and the government can’t substitute economic intervention for economic opportunity.
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