2014 Shaping the Future of New York Fridays: 11:00-1:45 Boylan Hall, 2231

The stories of Iceland and Greece are fairly parallel up to the point where Greece decides to listen to the IMF and cut spending from the country’s vitals. Iceland is small economy that grew primarily focused on banking, which meant that it was hit hard by the most recent global recession. Its options were simple: stay in debt for a few years while maintaining its high standard for public health and try some government stimulus plans or attempt to fix the debt right away by cutting spending on things the country cannot do without. Thankfully, they chose the first option. However, Greece when confronted with a similar problem, did not. Direct results were seen in HIV numbers. Basu and Stuckler stick to the their theme successfully. Cutting government spending does not work in solving huge government debts. The evidence in these two chapters shows how small countries are affected by the two opposing policies adopted. However, we have yet to see if Iceland’s policy would work in countries that are much larger and have much more complex economies than Iceland in the current attempt to fully recover from recent global recession. Signs point to yes, but either way, it’s clear that the worst thing a government can do is austerity. 

I feel sometimes as I read this book that the IMF would really absolutely love it if everyone on the planet agreed that increased social spending negatively affects the government’s budgets and profits, and cutting on these social programs during times of economic worry is a necessary evil. However, as we can see from Iceland, it’s simply not always the case.

This might say something about how I feel about the U.S. but it blows my mind how much the Icelandic government actually paid attention to it’s citizens during an economic crisis instead of having officials in the government argue with each other on what should be done. It’d be nice to have my voice heard every now and then in regards to how the country should be run… It warmed my heart to see the people of Iceland maintain their health even during an economic crisis.

It also infuriates me that the IMF simply does not adapt it’s plans based on the country. Making cuts everywhere should not be the ‘go to’ strategy. Countries’ economies are complex and deserve at least some analysis before you go ahead and affect the lives of thousands of people.

The reading this week, to me, illustrates a perfect example of preconceived notions being carried throughout time and having a huge effect. Stuckler and Basu do a pretty great job- and convincing one- of illustrating how the IMF’s policies failed Greece and how a departure from austerity helped Iceland. However, the IMF reacts like a school kid caught in web of lies- they just keep making it worse by sticking to their original policies.

I’m not so into conspiracy theories like James is, so I don’t believe the IMF is recommending their policies in order to cause harm, or because they don’t care about lower-class segments of the population. I think the IMF really just believes in their policies and are blind to the evidence because of their preconceived notions. What needs to happen is the field of policy advising needs to become more scientific- in the sense where recommendations are based on real trial and error, as opposed to intuition and old practices.