and America have propped up with official purchases). Gaping rich-world budget deficits show little sign of narrowing meaningfully, raising the possibility that governments eventually force central banks to inflate their debts away. Geopolitical ructions, like the Iran war and tariffs, are lifting the compensation for risk that investors demand. It does not help that Kevin Warsh, the new Federal Reserve chair, fumbled an early encounter with the markets. High bond yields are a problem for indebted governments. Every percentage-point rise in America’s bond yields, for instance, costs it extra interest payments worth 1.3% of annual GDP within a decade. Yet it is getting harder to imagine governments making cuts to offset the squeeze. In America each political party seems to be hoping that any debt crisis lands on the other. France’s presidential election next year could become a fight between populist parties on the left and right. Japan is, bizarrely, undertaking a fiscal stimulus. The longer governments wait to adjust, the bigger the adjustments become. Governments look increasingly as if they are betting on economic growth to pay the bills—which today means a bet on ai. The trouble is that faster growth, by boosting investment, usually brings higher interest rates and higher bond yields. Today higher market rates have arrived before faster growth. The sheer scale of data-centre investment, pegged at $1trn this year by Goldman Sachs, a bank, is making capital scarcer and helping raise yields. However, AI has yet to boost productivity measurably, even in China where diffusion of the technology is arguably the furthest along. It could be a while before the boost comes. Electricity and computing took decades to raise productivity growth perceptibly. Not all economies will fare equally well, either. Europe’s fiscal woes could worsen if AI brings more growth for America, pulling up global interest rates, but gets jammed up in the old world by rigid labour markets and high energy costs. That would mean costlier debt without any more growth. There is another problem, too. If the productivity boost from AI is large enough to transform any country’s fiscal arithmetic, vast job disruption is probably coming, meaning more spending on unemployed workers. Income may also shift from labour to capital, which is more lightly taxed. Should AI
prompt an arms race, countries will also need more defence spending. Even the exciting prospect of longer lifespans, fuelled by AI-powered scientific advances, would raise state spending on pensions. Economists at the Brookings Institution, a think-tank, reckon these factors plus higher interest rates could more than halve the positive impact of AI-induced growth on American deficits. The last time much of the rich world, including America and Britain, ran budget surpluses was at the turn of the millennium. That required fast productivity growth, which came from computers and the early internet. But deficits had to be cut, too. Without fiscal prudence, bonds are a punt on AI that looks just as risky as betting on wobbly tech stocks. ■ This article was downloaded by zlibrary from https://www.economist.com/leaders/2026/08/05/governments-are-making-a-dangerous- bet-on-the-ai-boom
Republicans and Democrats uniting against animal testing are wrong Experimenting on animals remains essential for human well-being Aug 6th 2026 It should be a relief when America’s Democrats and Republicans find common ground. But one emerging area of bipartisanship is disturbing. Members of both parties increasingly oppose scientific research on animals. If they succeed in stopping it, they will prevent America from helping advance the welfare of the most valuable animal of all: humans. Animal welfare may seem a cause for sandal-wearing lefties. But it has long had advocates on the right and far right. MAGA has embraced the crusade. Robert F. Kennedy junior, the health secretary, has vowed to end all animal experimentation, and under him the Centres for Disease Control and
Prevention is closing its primate laboratory. The navy has banned funding for scientific research on cats and dogs. The federal government is joined in the cause by plenty of Democrats— whose party otherwise sees itself as differing from Republicans by being committed to enlightened science. In Oregon Democratic politicians stand with Donald Trump’s appointees in trying to curtail research and shrink the monkey colony at America’s largest federally funded primate-research centre. The surge in opposition to testing partly reflects queasiness about the ethics of experiments on animals (never mind their enormous contribution to human health). It also results from a growing belief in a new generation of technologies that is transforming biomedical science. So-called New Approach Methods (NAMs) include organs-on-a-chip, organoids and artificial-intelligence models. In some areas NAMs are indeed making drug discovery faster and cheaper without using any animals. Liver-chips, for example, can use human liver cells on miniature devices to help identify toxic medicines before they ever reach an animal study. Yet it would be a mistake to think NAMs are anywhere close to rendering animal testing at scale unnecessary. Replicating small parts of human biology is not the same as reproducing all of it. Consider vaccines. They are among humanity’s greatest biomedical achievements, having saved an estimated 154m lives since 1974. Yet developing a vaccine entails finding and exploiting a complex biological pathway. Scientists have only just managed to mimic the first steps of this investigation on an organ-chip. Finding out the rest is still a process that depends on testing in both animal and human subjects. It is the same story with many other life-saving medicines. There is also a practical reason to keep on testing. If America’s laboratories are shut down, leadership on biotechnology will pass to China. Its biotech industry is growing rapidly, and it has recruited leading American scientists who have faced funding cuts, regulatory barriers and political hostility at home.
China is also buying up research monkeys at a staggering rate, raising their price and squeezing American labs’ budgets. The ambition of China makes the campaign for animal rights self-defeating. If American labs stop testing, the work will only migrate to a country that has lower animal-welfare standards. In future, NAMs may be able to displace more animal testing as technology advances. In the meantime animal welfare can be enhanced in labs. America’s decades-old primate centres should be modernised with bigger, more naturalistic enclosures for monkeys that allow in more daylight. Wearable monitoring technologies would reduce the need for handling, lowering the animals’ stress and improving the quality of the data they produce. This will cost money. All the more reason to keep funding animal research rather than cutting it off. ■ This article was downloaded by zlibrary from https://www.economist.com/leaders/2026/08/06/republicans-and-democrats-uniting- against-animal-testing-are-wrong
How to end Sudan’s brutal, forgotten conflict There is a sliver of a chance of a ceasefire. It must be grabbed Aug 6th 2026 It may be impossible to find a single place that sums up the devastation caused by Sudan’s civil war, now deep into its fourth year. But as we report after a rare trip to the country, its ruined capital comes close. Before the war erupted in April 2023, Khartoum was a bustling city of around 7m people. Today its centre is deserted. Bare husks remain of government buildings. Smart homes and luxury hotels are in ruins. The streets, charred by fighting, are silent. So many bodies have been dumped that human skulls spill out of makeshift mass graves. And still the killing continues. Khartoum is the scarred heart of one of Africa’s worst conflicts this century. War has destroyed swathes of the continent’s third-largest country and driven 14m people from their homes. Hundreds of thousands have probably
been killed by fighting, famine and bursts of genocidal violence. The only recent African war whose horrors are comparable is the one in Congo, which may have killed more than 5m people in the early 2000s. Yet the war in Sudan is even more important geopolitically. As we warned two years ago, it has drawn in neighbouring countries, helping reignite civil wars in South Sudan and Yemen and threatening another round of killing in Ethiopia. Outsiders have shown callous indifference to the suffering, by paying to keep the fighting going or neglecting it. Yet by endangering shipping in the Red Sea, the wars in Sudan and Iran are overlapping. That may raise the cost of prosecuting the war to its sponsors, giving them a reason at last to seek to bring about peace. On the face of it, Sudan’s war is a conflict between two main belligerents: the Sudanese Armed Forces (SAF), the country’s regular army and de facto government; and the Rapid Support Forces (RSF), a rich and well-equipped militia. Various other Sudanese groups are allied with the two sides. Yet the fighting is also a proxy war between deep-pocketed regional powers vying for resources and influence. The RSF receives weapons, money and mercenaries from the United Arab Emirates (UAE), though the UAE strenuously denies providing it with support. To a lesser degree, the SAF is armed and bankrolled by Egypt, Qatar, Saudi Arabia and Turkey. Until very recently, all these actors had an overwhelming interest in keeping the war going. The RSF has periodically claimed to be ready for ceasefire talks, but has used its spoils to grow into a military and economic empire with ambitions to rule the country. And our conversations with SAF leaders in Sudan give every impression that they continue to believe they can vanquish the RSF and hence oppose talks. Meanwhile, outsiders with the power to exert pressure on the belligerents and their supporters have been distracted. Europe is focused on Ukraine. President Donald Trump, who last November vowed to end the war, is caught up in his disastrous campaign in Iran. Many Sudanese, resigned to being treated as a lost cause, have begun to speak of a “Somalia timeline”: a decades-long conflict with no end in sight.