Why do we still believe that letting drug addicts "hit rock bottom" is a good thing?

Our densely populated, low-income neighbourhood of the Downtown Eastside in Vancouver has 16,000 residents and about 6,000 injection drug users. Day after day, I’ve seen kind, funny and gentle people lose their families, get sicker, become more isolated a

Including people living with addiction into society should not be revolutionary thinking in 2013. However, in many ways the addict is the modern-day “nigger”, a term used to dehumanise, alienate, torture and abuse a group of other human beings. Today, people who use drugs – “junkies” – are expected to suffer, then blamed when they do, and if they die there is almost a collective sigh of relief.

Understanding the work that my organisation, PHS, does with addicts on the streets in Vancouver can best be explained by introducing you to one of my teachers. Tilly was a waif-like, 40-year-old aboriginal woman who I met in my early twenties. Her hollow cheeks and deep-set dark eyes were childlike, imploring and innocent – in spite of her “experience”. Locked in a room and malnourished as a child, Tilly was addicted to prescription pills by the age of 11. By the time she was 15 she had tried to end her life by slitting her throat with a kitchen knife.

When I met Tilly she was working in the sex trade, injecting heroin and cocaine, and drinking. One night she was raped and beaten, and as I held her in my lap, bloodied and broken, I rocked her like a tiny bird. She told me through her sobs that it was her fault. I felt her emptiness and I understood her cries. Hers were not the cries of a criminal but of a wounded soul who felt her life was worthless.

Our densely populated, low-income neighbourhood of the Downtown Eastside in Vancouver has 16,000 residents and about 6,000 injection drug users. Here, I started running a 70-room housing project in 1991, and for 23 years I have seen the human fallout of our collective ignorance. Day after day, I’ve seen kind, funny and gentle people lose their families, get sicker, become more isolated and die.

The people I have come to know and grown to love have helped me heal myself. My own white, privileged family was not unfamiliar with tragedy. My mother suffered her own pain and left us when I was a child. I knew what it was like to feel empty and alone.

We hear all the time how addicts are selfish liars who steal from their families, cause pain, smash car windows to steal things and get into fights. We have created brutalising conditions that result in addicts being vilified and that cause enormous harm. However, I have also experienced a unique window into the resilience, humanity and strength of people trying to survive while actively addicted.

Throughout the 1990s, alongside my partner and my colleagues, I had to go against the common logic of the day as we wrestled over how to help. We intuitively gravitated to the belief that people might be able to do better if survival wasn’t so hard, and over the years we have succeeded in creating spaces that are tolerant, respectful and inclusive – where people struggling with addiction can live, find social membership, a sense of belonging and the basics.

This flew in the face of the received wisdom that said people had to “hit rock bottom” or society was somehow “encouraging them”.

As the death toll from drugs mounted in 1997, we rebranded our community “the Killing Fields”. The number of drug users developing HIV was on a par with Botswana; meanwhile, more than 400 drug overdoses happened in our province in just one year. The level of grief was profound, so we flew in experts from around the world to talk about things that we could try: supervised injection sites, heroin maintenance, harm reduction.

Drug users themselves used their voices and parent groups spoke out. Brave politicians stood up and some lost their careers. Gradually the public became educated through extensive media coverage and community debates. By 2003, the tide had shifted and on 21 September we opened North America’s first legally sanctioned supervised injection site, or “Insite”, as a partnership between our non-profit organisation and our local health authority. We saw people come in to what felt like a sanctuary – out of the back alleys to indoors, where users could inject their drugs under the supervision of a nurse.

Over these past ten years almost two million injections have happened here, and 14,000 individuals have come in. Each year, 400 referrals are made into treatment. The staff revive, on average, 40 people a month who overdose and not one person has died.

Today, we have a more sophisticated understanding that an individual, while addicted, still has the right to live. We have created places like our dental clinic, art gallery and bank, and social enterprises that are reshaping the landscape. For example, with over 4,500 members, our community bank (a partnership with Vancity Credit Union) offers savings and checking accounts to people who are unwelcome, banned or followed by security guards in conventional financial institutions. New units of housing have been funded by our provincial government, targeting the most vulnerable homeless and addicted.

Health-care services have been established that are relevant to people actively using drugs. Social enterprises have been created to give people – addicted or not – jobs, at the vintage clothing store, chocolate and coffee roasters, art studio and retail store, commercial laundry and pest-control company.

For those of us who remember how dark it felt 20 years ago, there is much to celebrate in Vancouver in 2013. People in our community are living ten years longer.

Tilly was kind, sensitive, gentle and generous, but in the end she died of Aids because no one had cared enough to make sure she had access to a clean syringe. As a society, we told her that her life didn’t matter and she believed us.

It’s time to stop punishing and start creating solutions to the walls of intolerance and hatred we’ve built. These steps, though seemingly small, can create a new social context, one that redefines the addict from a non-person to a person, a criminal to a citizen, someone “diseased” to someone who just needs love, belonging and a community, just like me.

Liz Evans is the founder and executive director of PHS Community Services Society, which helps drug users in Vancouver

Drug users at Insite, a legal supervised injection site in Vancouver. Image: Getty

This article first appeared in the 23 October 2013 issue of the New Statesman, Russell Brand Guest Edit

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We're racing towards another private debt crisis - so why did no one see it coming?

The Office for Budget Responsibility failed to foresee the rise in household debt. 

This is a call for a public inquiry on the current situation regarding private debt.

For almost a decade now, since 2007, we have been living a lie. And that lie is preparing to wreak havoc on our economy. If we do not create some kind of impartial forum to discuss what is actually happening, the results might well prove disastrous. 

The lie I am referring to is the idea that the financial crisis of 2008, and subsequent “Great Recession,” were caused by profligate government spending and subsequent public debt. The exact opposite is in fact the case. The crash happened because of dangerously high levels of private debt (a mortgage crisis specifically). And - this is the part we are not supposed to talk about—there is an inverse relation between public and private debt levels.

If the public sector reduces its debt, overall private sector debt goes up. That's what happened in the years leading up to 2008. Now austerity is making it happening again. And if we don't do something about it, the results will, inevitably, be another catastrophe.

The winners and losers of debt

These graphs show the relationship between public and private debt. They are both forecasts from the Office for Budget Responsibility, produced in 2015 and 2017. 

This is what the OBR was projecting what would happen around now back in 2015:

This year the OBR completely changed its forecast. This is how it now projects things are likely to turn out:

First, notice how both diagrams are symmetrical. What happens on top (that part of the economy that is in surplus) precisely mirrors what happens in the bottom (that part of the economy that is in deficit). This is called an “accounting identity.”

As in any ledger sheet, credits and debits have to match. The easiest way to understand this is to imagine there are just two actors, government, and the private sector. If the government borrows £100, and spends it, then the government has a debt of £100. But by spending, it has injected £100 more pounds into the private economy. In other words, -£100 for the government, +£100 for everyone else in the diagram. 

Similarly, if the government taxes someone for £100 , then the government is £100 richer but there’s £100 subtracted from the private economy (+£100 for government, -£100 for everybody else on the diagram).

So what implications does this kind of bookkeeping have for the overall economy? It means that if the government goes into surplus, then everyone else has to go into debt.

We tend to think of money as if it is a bunch of poker chips already lying around, but that’s not how it really works. Money has to be created. And money is created when banks make loans. Either the government borrows money and injects it into the economy, or private citizens borrow money from banks. Those banks don’t take the money from people’s savings or anywhere else, they just make it up. Anyone can write an IOU. But only banks are allowed to issue IOUs that the government will accept in payment for taxes. (In other words, there actually is a magic money tree. But only banks are allowed to use it.)

There are other factors. The UK has a huge trade deficit (blue), and that means the government (yellow) also has to run a deficit (print money, or more accurately, get banks to do it) to inject into the economy to pay for all those Chinese trainers, American iPads, and German cars. The total amount of money can also fluctuate. But the real point here is, the less the government is in debt, the more everyone else must be. Austerity measures will necessarily lead to rising levels of private debt. And this is exactly what has happened.

Now, if this seems to have very little to do with the way politicians talk about such matters, there's a simple reason: most politicians don’t actually know any of this. A recent survey showed 90 per cent of MPs don't even understand where money comes from (they think it's issued by the Royal Mint). In reality, debt is money. If no one owed anyone anything at all there would be no money and the economy would grind to a halt.

But of course debt has to be owed to someone. These charts show who owes what to whom.

The crisis in private debt

Bearing all this in mind, let's look at those diagrams again - keeping our eye particularly on the dark blue that represents household debt. In the first, 2015 version, the OBR duly noted that there was a substantial build-up of household debt in the years leading up to the crash of 2008. This is significant because it was the first time in British history that total household debts were higher than total household savings, and therefore the household sector itself was in deficit territory. (Corporations, at the same time, were raking in enormous profits.) But it also predicted this wouldn't happen again.

True, the OBR observed, austerity and the reduction of government deficits meant private debt levels would have to go up. However, the OBR economists insisted this wouldn't be a problem because the burden would fall not on households but on corporations. Business-friendly Tory policies would, they insisted, inspire a boom in corporate expansion, which would mean frenzied corporate borrowing (that huge red bulge below the line in the first diagram, which was supposed to eventually replace government deficits entirely). Ordinary households would have little or nothing to worry about.

This was total fantasy. No such frenzied boom took place.

In the second diagram, two years later, the OBR is forced to acknowledge this. Corporations are just raking in the profits and sitting on them. The household sector, on the other hand, is a rolling catastrophe. Austerity has meant falling wages, less government spending on social services (or anything else), and higher de facto taxes. This puts the squeeze on household budgets and people are forced to borrow. As a result, not only are households in overall deficit for the second time in British history, the situation is actually worse than it was in the years leading up to 2008.

And remember: it was a mortgage crisis that set off the 2008 crash, which almost destroyed the world economy and plunged millions into penury. Not a crisis in public debt. A crisis in private debt.

An inquiry

In 2015, around the time the original OBR predictions came out, I wrote an essay in the Guardian predicting that austerity and budget-balancing would create a disastrous crisis in private debt. Now it's so clearly, unmistakably, happening that even the OBR cannot deny it.

I believe the time has come for there be a public investigation - a formal public inquiry, in fact - into how this could be allowed to happen. After the 2008 crash, at least the economists in Treasury and the Bank of England could plausibly claim they hadn't completely understood the relation between private debt and financial instability. Now they simply have no excuse.

What on earth is an institution called the “Office for Budget Responsibility” credulously imagining corporate borrowing binges in order to suggest the government will balance the budget to no ill effects? How responsible is that? Even the second chart is extremely odd. Up to 2017, the top and bottom of the diagram are exact mirrors of one another, as they ought to be. However, in the projected future after 2017, the section below the line is much smaller than the section above, apparently seriously understating the amount both of future government, and future private, debt. In other words, the numbers don't add up.

The OBR told the New Statesman ​that it was not aware of any errors in its 2015 forecast for corporate sector net lending, and that the forecast was based on the available data. It said the forecast for business investment has been revised down because of the uncertainty created by Brexit. 

Still, if the “Office of Budget Responsibility” was true to its name, it should be sounding off the alarm bells right about now. So far all we've got is one mention of private debt and a mild warning about the rise of personal debt from the Bank of England, which did not however connect the problem to austerity, and one fairly strong statement from a maverick columnist in the Daily Mail. Otherwise, silence. 

The only plausible explanation is that institutions like the Treasury, OBR, and to a degree as well the Bank of England can't, by definition, warn against the dangers of austerity, however alarming the situation, because they have been set up the way they have in order to justify austerity. It's important to emphasise that most professional economists have never supported Conservative policies in this regard. The policy was adopted because it was convenient to politicians; institutions were set up in order to support it; economists were hired in order to come up with arguments for austerity, rather than to judge whether it would be a good idea. At present, this situation has led us to the brink of disaster.

The last time there was a financial crash, the Queen famously asked: why was no one able to foresee this? We now have the tools. Perhaps the most important task for a public inquiry will be to finally ask: what is the real purpose of the institutions that are supposed to foresee such matters, to what degree have they been politicised, and what would it take to turn them back into institutions that can at least inform us if we're staring into the lights of an oncoming train?