Fiscal Interventions Research Articles

Public health nutrition actions across 14 EU countries: a qualitative study to elicit the views of policy makers and thought leaders

BackgroundCardiovascular disease (CVD) is the main cause of death in Europe. EuroHeart II is a research programme led by the European Heart Network and European Society of Cardiology to address the burden of CVD in Europe and to determine interventions for prevention of avoidable deaths and disability. One aspect identifies the most effective public health nutrition policies, to inform future evidence-based strategies to promote cardiovascular health. MethodsWe mapped national nutrition policies across 30 European countries, then contacted and recruited potential participants in 14 of those countries. Participants were identified through various sources; for example, the European Heart Network, via national Heart Foundations, via published work, the internet, and the snowballing technique. Before interview, participants were emailed information about the project, the interview questions (developed and piloted with senior stakeholders in the UK), and a summary of public health nutrition policies in their country. Policy makers, academics, and other public health nutrition experts at the national level shared their views on a range of possible approaches to public health nutrition strategies, covering the entire policy spectrum. The interviews were done in English, either by person, telephone, or Skype. The interviews typically lasted 45–60 min. The interview questions were open ended and used as a topic guide. This structure enabled the interviews to be led by the interviewees, not the interviewers. Also, the interviews were flexible with no maximum time limit. Interviews were transcribed and entered into NVivo software. The Framework approach was used to analyse transcripts. Cross checking of coding and interpretation of data was done by three researchers from the research team. FindingsWe did 70 interviews in 14 countries across Europe. The interviews enabled more up-to-date and accurate information than was provided on websites or in reports. Responses revealed important differences between official lists of food policies and their actual implementation on the ground. European countries are at very different stages of addressing public health nutrition issues. Most are promoting dialogue, recommendations, and guidelines (often regarded as an early part of the policy process). Voluntary reformulation of foods is also common, especially for salt, sugar, and total fat. Legislation, regulation, or fiscal interventions targeting salt, sugar, fat, or fruit and vegetable consumption are still uncommon. Many interviewees expressed a preference for regulation and fiscal interventions and generally believed that they were more effective than voluntary measures and information-based interventions, albeit politically more challenging. Conversely, information-based interventions were often seen as being more politically feasible than regulation and fiscal measures. InterpretationPublic health nutrition policies in Europe represent a complex, dynamic, and rapidly changing arena. Encouragingly, most countries are engaged in activities intended to increase consumption of health food and decrease the intake of junk food and sugary drinks. Exemplar countries showing notable progress might include Finland, Norway, Iceland, Hungary, the UK, and Portugal. However, most countries fall well short of optimum activities. Implementation of potentially powerful nutrition policies remains frustratingly patchy across Europe. This study provides only a snapshot of activities up until 2012; developments are ongoing, and data may not be complete and will require regular updating. We propose future work to identify and assess population-based policy actions across the WHO European Region to expand and refine the evidence base. This information could support development of a nutrition policy assessment method for each country to use to promote—and implement—healthier food strategies. FundingEuropean Union Health Programme.

OP15 Identifying the most effective public health nutrition policies: The views of policy-makers and thought-leaders across 14 EU countries

BackgroundEuroHeart 2 is a European research programme led by the European Heart Network and European Society of Cardiology (http://www.ehnheart.org/euroheart-ii.html). One aspect of the project aimed to identify the most effective...

Review of the evidence for the potential impact and feasibility of substituting saturated fat in the New Zealand diet

To estimate the potential impact on cardiovascular health of modifying dietary intake of saturated fat across the New Zealand population, and whether this would be appropriate and feasible. First, a literature review of meta-analyses was conducted to estimate the magnitude of reduction in risk for cardiovascular events in response to a reduction in dietary saturated fat intake (with or without substitution with other macronutrients). Second, data from the New Zealand Adult Nutrition Survey 2008/09 were used to determine whether a change to the population's dietary fat intake would be warranted and feasible. Five relevant meta-analyses were identified. No significant association between saturated fat intake alone and cardiovascular disease was found. However, the incidence of cardiovascular disease events was less when dietary saturated fats were replaced with polyunsaturated fats, reducing the risk of cardiovascular events by about 10%. Compared with nutritional guidelines, New Zealanders' current saturated fat intake is excessive while polyunsaturated fat intake is inadequate; both would be corrected by a substitution of 5% of daily energy intake. Replacing 5% of daily energy consumed as saturated fat with polyunsaturated fats would be expected to reduce cardiovascular events by about 10%. In order to achieve the population-wide dietary fat modifications needed to improve cardiovascular health for New Zealanders, a public health strategy (e.g. fiscal, regulatory and/or educational interventions) must be implemented. Further work is needed to establish the cost-effectiveness of the various strategies.

A Look Back at 2012: A Year of Transition

The Journal Editors would like to wish all our contributors and readers a Happy and Prosperous 2013. We are grateful to the many authors who submit their manuscripts to World Medical & Health Policy. Last year witnessed the introduction of new therapies and technologies into medical practice. Improvements in cancer detection and survival, advances in natural body orifices surgery, and handheld devices continue to enhance the practioner's toolbox. Handheld diagnostic devices based on polymerase chain reaction (PCR) technology now offers the promise for diagnostic testing in remote regions of the globe. Tied to the global information network, public health and medical consultations can be accessible to millions of individuals, helping with rapid access to medical care and services. Infectious diseases, especially those resistant to antibiotics, can be more rapidly detected, resulting in earlier appropriate therapy which improves outcomes. In 2012, many governments and private organizations focused on improving population health, access to care, delivering preventive services and containing, or eradicating, infections. Preventing the spread of HIV/AIDS, malaria and tuberculosis, poliomyelitis eradication, improving sanitation and food services will remain a 2013 priority for many international funding organizations.The recent rapid rise in global longevity, especially in developing countries, has been met with both hope and concern; hope for improved health and concern for the increase in non-communicable diseases and the inability of the current medical infrastructure to meet the demand for services. Preventive care early in life is essential to reduce the burden of chronic debilitating diseases among older individuals and ensure “healthy aging” and the wellbeing of the global community. Health care reforms and fiscal interventions to contain the rising costs of health care are not sufficient tools to address the looming health challenges. Adequate resources in the fight against contributing factors such as poverty, poor nutrition, smoking, physical inactivity, socio-economic shifts and environmental exposures, and meeting communities' needs and expectations, should be priorities for the foreseeable future (Clements, Coady, & Gupta, 2012; World Bank (2012); World Health Organization (2012)). Programs addressing health literacy and the fight against poverty and health disparities require focus and support. Adding to the burden of medical costs are natural and human made disasters. The year 2012 ranked as the second worst year for disasters costing over one billion USD per event. While the loss of life was minimized by effective preparedness, damage to critical infrastructure and medical services has been staggering. Victims of disasters require long-term care for chronic diseases. The International Federation of the Red Cross and Red Crescent Societies estimate that over 73 million individuals were displaced in 2012 due to disasters. Access to good care and preventive services for all should be a global priority. Unfortunately, a global shortage of competent and adequate health care workforce continues to be a major roadblock to the successful implementation of urgent programs targeting population's health. In many countries, even the life of medical professionals and health care workers is at risk. WHO and the World Medical Association are actively involved in promoting Physicians' political neutrality and security, together with removing the global social inequalities in public health services and health care access. In 2013, the global health community should increase its attention, and funding, to solve the problem of growing health disparities and the rising burden of non-communicable diseases. We would welcome submissions on this important issue from our readership around the globe. Last year World Medical & Heath Policy began the transition to our new publisher, Wiley-Blackwell. We look forward to the opportunites this trasition will afford in expanding the readership and reach of the journal. Future issues of our Journal will continue to explore the global medical challenges facing the world community. Arnauld Nicogosssian is Senior Editor of World Medical & Health Policy and Distinguished Research Professor and Director of the Center for the Study of International Medical Policies and Practices at George Mason University's School of Public Policy. Bonnie Stabile is Deputy Editor of World Medical & Health Policy and an Adjucnt Professor in George Mason University's School of Public Policy, and Department of Public and International Affairs. Otmar Kloiber, Editor of World Medical & Health Policy, is Secretary General of the World Medical Association. Edward Septimus, Chair of the Editorial Board of World Medical & Health Policy, is Medical Director for Infection Prevention and Epidemiology at HCA. Thomas Zimmerman, Editor of World Medical & Health Policy, is Founding Dean of Palm Beach Medical College.

Liquidity when it matters: QE and Tobin's q

The model of credit-constrained investors developed by Kiyotaki and Moore is used to analyse ‘unconventional monetary policy’ actions taken in the US and UK. We make two contributions. The first is expositional—to show that their model of a liquidity crisis can be represented as a two-equation dynamic system in K (the aggregate capital stock) and q (Tobin’s q, the price of capital goods) with saddle-point dynamics. This allows for an intuitive, graphical exposition of the issues and results. The second is to show how a liquidity crisis leads to a deep recession when the assumption of perfect wage and price flexibility is replaced by downwardly rigid wages and prices. As in Del Negro et al., we show how central bank policies to increase liquidity can ameliorate the recession: but we use our simplified model for the purpose. Further, we analyse how fiscal intervention can help combat recession.

Open Economy Monetary Policy Reconsidered

The standard policy rule of the Mundell-Fleming model states that under a flexible exchange rate regime with perfectly elastic capital flows, monetary policy is effective and fiscal policy is not. The rule ignores the effect of a change in the nominal exchange rate on the domestic price level. The price level effect is noted in some textbooks, but not formally analyzed. When subjected to a rigorous analysis, the interaction of the exchange rate and the domestic price level substantially changes the standard policy rule. The logically correct statement would be, with a flexible exchange rate and perfectly elastic capital flows, the effectiveness of monetary policy depends on the marginal import propensity and the sum of the trade elasticities. Typical values for these parameters suggest that the effectiveness of monetary policy under flexible exchange rates can be low even if capital flows are perfectly elastic. Because these same parameters have the opposite effect on fiscal policy, the relative effectiveness of fiscal and monetary interventions under a flexible exchange rate is an empirical issue that cannot be determined a priori.

The Fall and Rise of Keynesian Fiscal Policy

This paper reviews the recent evolution of thinking and evidence regarding the effectiveness of activist fiscal policy, including how policy multipliers might vary with respect to economic conditions. Like many other countries that were hit by the “Great Recession,” the USA responded initially with active fiscal policy measures. But a more positive view of fiscal intervention appears to have developed earlier in the decade, and estimated decision rules confirm that there was an increase in policy activism. While this positive view has been tested by the unclear effects of fiscal policy during the Great Recession, recent evidence does suggest that fiscal policy may be especially effective in recession. Fiscal policy activism has also been tempered by recent concerns about growing government debt, a development which potentially might also undercut the effectiveness of expansionary fiscal policy.

The effects of financial crisis on fiscal positions

The recent financial crisis was characterized by the sizeable fiscal cost of banking sector bail out operations and the significant automatic and discretionary fiscal policy response to shrinking output, which have put increased pressure on public finances in many industrialized countries. This paper tries to evaluate the impact of financial crisis episodes on debt developments. The findings indicate that severe financial crisis episodes increase the stock of debt by 2.7%–4.0% of GDP, on average in the 20 OECD countries examined. Ιn countries with big financial sectors it ranges from 4.2%–5.3% of GDP and in countries with smaller financial sectors it is about 1.4%–1.7% of GDP. The primary balance and the cyclically adjusted fiscal policy stance ease by about 2.6% of GDP and 1.6% of potential GDP, respectively, in the event of a severe financial market crash. Expansionary fiscal interventions are more pronounced in countries with sizable financial sectors. I find significant evidence that a financial market collapse paves the way for a subsequent deterioration in debt ratios.

Modelling the effect on chronic disease health of changing food prices based on greenhouse gas emissions

BackgroundClimate change has been described as the biggest global health threat of the 21st century. There are potential health co-benefits of climate change mitigation strategies, and several studies have investigated effect on health of so-called carbon-friendly diets. Taxation based on greenhouse gas (GHG) emissions is a potential method of internalising the wider costs of climate change to society; such a tax on food and drinks would substantially reduce UK GHG emissions and raise revenue, but the effect on health is unclear. The aim of this study was to model the health effect, the reduction in GHG emissions, and the revenue raised from a tax based on the GHG emissions of food consumed in the UK. MethodsWe modelled a tax of £27·19 per tonne carbon dioxide equivalents (tCO2e)/kg product applied to all products with emissions greater than 4·10 kg CO2e/kg, the mean value for UK emissions across all food groups. Baseline UK consumption data were from the 2010 DEFRA Family Food survey and associated food-specific GHG emissions were taken from a World Wildlife Fund report. We weighted food GHG emissions by country of origin using data for UK imports and exports from UN Food and Agriculture Organization food balance sheets. Derivation of the tax level was based on the DEFRA marginal abatement cost curve for agriculture, which plots the cost effectiveness of different mitigation strategies; this approach estimates that 16·2% of annual UK agriculture-related emissions could be mitigated against at a cost of £27·19/tCO2e. Cross-price and own-price elasticities calculated from Family Food survey purchasing patterns were applied to food groups from the survey to derive changes in consumption after application of the tax. Health outcomes were modelled by a comparative risk assessment model that used age-specific and sex-specific relative risk estimates from meta-analyses to link the consumption of different food categories to mortality. FindingsThis study showed 6751 (95% CI 6147–7347) deaths averted per year and an annual reduction in GHG emissions of 18 765 ktCO2e (41% of the 2010 DEFRA figure of 46 200 ktCO2e for UK emissions relating to agriculture). Revenue generated from this tax scenario was £3·32 billion per year. In this scenario, the most taxed product was beef at £1·76 per kg, with other meats, fish, and coffee also being taxed. Of the 6751 deaths averted, 73% (4915, 95% CI 4379–5461) were due to cardiovascular disease and 15% (1032, 824–1227) were due to cancer. InterpretationTaxation of foods based on their GHG emissions has the potential to reduce emissions from the UK agriculture sector as well as reduce the number of premature deaths in the UK population and generate substantial tax revenue. This analysis included only health benefits from dietary change and not the wider effect on health of reduced atmospheric pollution and slowed climate change. The health implications of fiscal intervention on food based on GHG emissions has not been previously investigated and offers a further approach to climate change mitigation strategies. FundingBritish Heart Foundation.

The market price of fiscal uncertainty

Recent fiscal interventions have raised concerns about US public debt, future distortionary tax pressure, and long-run growth potential. We explore the long-run implications of public financing policies aimed at short-run stabilization when: (i) agents are sensitive to model uncertainty, as in Hansen and Sargent (2007), and (ii) growth is endogenous, as in Romer (1990). We find that countercyclical deficit policies promoting short-run stabilization reduce the price of model uncertainty at the cost of significantly increasing the amount of long-run risk. Ultimately these tax policies depress innovation and long-run growth and may produce welfare losses.

The Policy Consensus Ruling European Political Economy: Its Attractions, Flaws and Possible Departures

Since 2008, crises in financial markets have forced governments in OECD countries to unprecedented monetary and fiscal intervention. In previous such situations, namely the Great Depression and stagflation in the 1970s, the economic policy consensus of the time came under close scrutiny and eventually shifted. Today, criticism of academic economics is not in short supply but a straightforward alternative is not in sight either. This seems to be particularly troubling for governments in Europe, desperate for advice on how to stop contagion spreading from a small peripheral economy to the core of the European Union. But then, the lessons that especially European governments seem to draw from the crisis suggest that the economic policy consensus of the last two decades, with its heavy emphasis on structural reforms and inflation-targeting monetary policy, is less obsolete than the critics suggest. Our contribution first assesses what the consensus until recently has been and how it could have been implicated in the crisis. We identify as the elements of the consensus that are potentially flaws responsible for the crisis the notion of a fundamental equilibrium that is determined independently of financial markets, the focus on micro foundations that neglects issues of systemic stability and an obsession with structural reforms of labour markets. The incremental shift of economic theorizing towards selfregulation of markets and macro-stabilisation assigned to central banks left governments the task of restoring the role of the price mechanism in labour and product markets. A stronger role of price adjustments increased the flexibility of nominal prices but not necessarily real adjustment. Second, we argue that the policy consensus continues to persist because it is politically attractive. Following Hall (1989) who suggested that ‘the political power of economic ideas’ requires, at a minimum, their economic, administrative and political viability, we identify the attractions of the policy consensus as directly following from its theoretical flaws. In monetary policy, agencification of monetary policy - i.e. the creation of independent central banks - freed fiscal authorities from dealing with issues of macro-stabilisation for which they typically get more blame than praise. The assurance that there is a full-employment equilibrium determined by real economic factors enabled governments to turn a blind eye on overheating credit markets that allowed households to finance rising consumption while real incomes stagnated for most. Finally, the focus on labour markets and structural reforms suited particularly centre-left parties and governments targeting changing electoral constituencies, due to a decline in industrial employment and the inequality of employment conditions in services. We end the paper with observations of potential departures from the policy consensus that could indicate a significant shift for the political economy of Europe. The crucial question is whether political support can be mobilized for the shift from structural reforms of labour markets to the containment of risks in financial markets. Welfare state building in the 20th century depended on the active support of firms for welfare state expansion in the employment relationship. Similarly, robust re regulation of financial markets is likely to emerge as a response to political demand by ‘capitalists against markets’ (Swenson 2002). One cannot take this demand for granted. But we argue that there is a prospect for the formation of politically cross-cutting coalitions that aim at defending the real economy against financial havoc by protecting the financial system from itself.

Death of a Theory

The author discusses the effectiveness of fiscal approaches to stabilization policy. The conventional wis dom before 2007 was that fiscal policy intervention as a stabilization tool had little to recommend it, mostly due to political constraints and to the unlikely effectiveness of many types of temporary fiscal policy actions. However, with short-term nominal interest rates near zero, attention turned again toward fiscal stabilization policy. The author describes and critiques two theories of how fiscal policy might be viewed as effective in such circumstances. One, heavily studied, is that a tax-financed increase in govern ment expenditures would temporarily increase total output in the economy. The other, lightly studied but rhetorically forceful, is that increased government expenditures may inspire confidence. Both theo ries have drawbacks, but the author argues the first is dying because of three considerations: (i) actual political systems are ill-suited to implement the advice from the theory; (ii) monetary stabilization policy has been quite effective, making fiscal experiments redundant; and (iii) governments pushed distortion

The effects of financial crisis on fiscal positions

The recent financial crisis was characterized by the sizeable fiscal cost of banking sector bail out operations and the significant automatic and discretionary fiscal policy response to shrinking output, which have put increased pressure on public finances in many industrialized countries. This paper tries to evaluate the impact of financial crisis episodes on debt developments. The findings indicate that severe financial crisis episodes increase the stock of debt by 2.7%-4.0% of GDP, on average in the 20 OECD countries examined. Ιn countries with big financial sectors it ranges from 4.2%-5.3% of GDP and in countries with smaller financial sectors it is about 1.4%-1.7% of GDP. The primary balance and the cyclically adjusted fiscal policy stance ease by about 2.6% of GDP and 1.6% of potential GDP, respectively, in the event of a severe financial market crash. Expansionary fiscal interventions are more pronounced in countries with sizable financial sectors. I find significant evidence that a financial market collapse paves the way for a subsequent deterioration in debt ratios.

How the UK economy weathered the financial storm

Prior to the global financial crisis of 2008, the UK had the largest banking sector asset to GDP ratio among large countries, and had experienced rapid real property price increases as well as a persistent current account deficit in the preceding decade. These factors, together with its role as an international financial centre, made the UK economy particularly vulnerable to the onset of the global financial crisis. Although the initial drop in real GDP was steep, we provide evidence that the economy has weathered the financial storm better than many feared, and has fared no worse than its peer group of major economies. In this paper we assess the reasons underlying this outcome, including the possibility of exaggerated vulnerabilities, global economic recovery, the flexible supply side of the UK economy, as well as fiscal, financial and monetary policy interventions. Our analysis suggests that all of these factors played a role in cushioning the impact on the UK real economy, leading to a more benign outcome than most observers expected.

Inequalities in diet and nutrition

The inequality of nutrition and obesity re-focuses concern on who in society is consuming the worst diet. Identification of individuals with the worst of dietary habits permits for targeting interventions to assuage obesity among the population segment where it is most prevalent. We argue that the use of fiscal interventions does not appropriately take into account the economic, social and health circumstances of the intended beneficiaries of the policy. This paper reviews the influence of socio-demographic factors on nutrition and health status and considers the impacts of nutrition policy across the population drawing on methodologies from both public health and welfare economics. The effects of a fat tax on diet are found to be small and while other studies show that fat taxes saves lives, we show that average levels of disease risk do not change much: those consuming particularly bad diets continue to do so. Our results also suggest that the regressivity of the policy increases as the tax becomes focused on products with high saturated fat contents. A fiscally neutral policy that combines the fat tax with a subsidy on fruit and vegetables is actually more regressive because consumption of these foods tends to be concentrated in socially undeserving households. We argue that when inequality is of concern, population-based measures must reflect this and approaches that target vulnerable populations which have a shared propensity to adopt unhealthy behaviours are appropriate.

The Market Price of Fiscal Uncertainty

Recent fiscal interventions have raised concerns about US public debt, future distortionary tax pressure and long-run growth potential. We explore the long-run implications of public financing policies aimed at short-run stabilization when: (i) agents are sensitive to model uncertainty as in Hansen and Sargent (2007), and (ii) growth is endogenous as in Romer (1990). We find that tax-smoothing policies promoting short-run stabilization generate a trade-off by simultaneously reducing the price of model uncertainty and significantly increasing the amount of long-run risk. Ultimately these tax policies depress innovation and long-run growth and may produce welfare losses.

Government regulation to promote healthy food environments – a view from inside state governments

Food policy interventions are an important component of obesity-prevention strategies and can potentially drive positive changes in obesogenic environments. This study sought to identify regulatory interventions targeting the food environment, and barriers/facilitators to their implementation at the Australian state government level. In-depth interviews were conducted with senior representatives from state/territory governments, statutory authorities and non-government organizations (n =45) to examine participants' (i) suggestions for regulatory interventions for healthier food environments and (ii) support for pre-selected regulatory interventions derived from a literature review. Data were analysed using thematic and constant comparative analyses. Interventions commonly suggested by participants were regulating unhealthy food marketing; limiting the density of fast food outlets; pricing reforms to decrease fruit/vegetable prices and increase unhealthy food prices; and improved food labelling. The most commonly supported pre-selected interventions were related to food marketing and service. Primary production and retail sector interventions were least supported. The dominant themes were the need for whole-of-government and collaborative approaches; the influence of the food industry; conflicting policies/agenda; regulatory challenges; the need for evidence of effectiveness; and economic disincentives. While interventions such as public sector healthy food service policies were supported by participants, marketing restrictions and fiscal interventions face substantial barriers including a push for deregulation and private sector opposition.

Government Expenditures and the Growth-Inequality Trade-Off: The Swedish Case

Sweden is one of the countries with the largest public fiscal intervention and narrowest income inequality in the world. This article investigates to what extent these two features are interconnected and whether economic growth affects and is affected by this relationship. Empirical results from vector auto-regression models reveal the existence of important long-run non-Keynesian effects (i.e., lessening fiscal expansions and, conversely, expansionary fiscal contractions) and significant downward effects of government expenditures on income inequality. The existence of a negative trade-off between growth and inequality is an important stylized fact which deserves close attention by policy makers.

Finance and Stability: The Limits of Capitalism

Once again the United States economy is facing a crisis, resolution of which first requires the realization that there are many types of capitalism: Solutions implemented in the past, therefore, may or may not be an appropriate solution today, as they could have been implemented as an answer to a problem posed within the context of a different model. Alternatively, the solution may lie in the implementation of a totally new economic regime in answer to reoccurring problems inherent in capitalism in general. The implementation of a new model is not a unique happening in United States economic history. The interventionist model--set in motion by President Roosevelt in answer to the failure of the laissez-faire model in the 1930s--dealt with the obvious flaw inherent in capitalism in general, namely, its inability to maintain a level of aggregate demand consistent with full employment. Implementation of the interventionist model prevented a massive depression of the type experienced in the 1930s from being repeated due to the larger role played by the government sector in maintaining demand via active fiscal policy, while moderating inflation through the use of monetary policy. The interventionist model also recognized the less obvious, deeper flaw of capitalism--namely, the manner in which the financial system can adversely affect the price of assets relative to that of current output. Absent any interventionist policy, the resulting decline in private investment and profits leads to a downward spiral and collapse of the financial sector. The institutional roadblocks included in the interventionist model were sufficient to avert large disequilibriums in asset and output prices, thereby sustaining profits and precluding a deep recession. (Indeed, the Federal Reserve was not forced to act to avert a financial crisis until 1968, when problems arose in the commercial paper market.) The interventionist model, however, was abrogated during the 1980s with the reinstitution of a new laissez-faire model. The new model eliminated many of the restrictions imposed on financial sector, massive increases in national deficits through unproductive public sector spending (made even more inefficient by the resulting interest on the debt), and the growth of speculative financing schemes that left us with too many highly indebted firms. A large, financially induced depression was contained only through the reintroduction of massive governing monetary and fiscal intervention in the form of the S&L bailout and the maintenance of profits with massive deficits. Although the subsequent drop in interest rates has resulted in a rise in asset values and somewhat abated the turmoil in the financial markets, the economy continues to stagnate.

Why have total cholesterol levels declined in most developed countries?

BackgroundOur paper addresses three major public health issues: cholesterol, statins and policies to prevent cardiovascular disease.DiscussionTotal cholesterol levels in whole populations have fallen substantially in the USA, UK and most other developed countries. This has greatly contributed to decreases in cardiovascular disease deaths. The evidence identifying diet as the major contributor to these historical falls in cholesterol is powerful and consistent. Large falls occurred before statins were introduced. Additional substantial falls occurred before statins were widely used.Now, up to 14% adults in Western populations currently receive statins for primary prevention. Furthermore, because diet is now only slowly improving, the statin contribution currently appears proportionately larger.SummaryIn conclusion, diet change explains most of the historical falls in cholesterol. Until very recently, the contribution from statins has been surprisingly modest. Furthermore, many middle income countries may have neither the resources nor the infrastructure for mass statin therapy.Further substantial falls in cholesterol are therefore unlikely to be obtained simply by increased use of statins or dietary advice to individuals if unsupported by the wider environment. This further emphasises the need for more effective structural policies. Regulatory and fiscal interventions could easily eradicate industrial transfats, halve the intake of dietary saturated fat, and subsidise healthier fats.