The waistline bubble began to expand at just about the same time as the debt bubble:
First, it’s important emphasise that correlation is not causation — more than 99% of murderers have consumed water in the twenty four hour period preceding a murder. But it is clear that the effects of globalisation are at play in both cases (simply because globalisation has transformed the American economy) – far fewer Americans have to do physically demanding manufacturing work, and thanks to the mechanisation of agriculture and food production there are far more calories-per-American available to consume.
The interesting difference between debt and obesity is that while it is possible from historical evidence to construct a fairly coherent model linking excess outgrowth in debt with recession and depression — for example, I conjecture that a depression becomes inevitable when debt service cost growth consistently outpaces income growth — there is no such historical evidence available for obesity, because there has never in known world history been an obesity epidemic of such proportion, so there is no way to know how the obesity bubble may burst.
To what extent do the healthcare overheads of an obesity epidemic act as a drag on economic growth? According to an estimate by the CDC, $147 billion.
How much of a drag on the real economy is supporting those who have dropped out of the labour force due to obesity-related illness like diabetes, fatigue, depression and cardiovascular illness?
Well, we know that in the years that obesity has been exploding, that the disabled proportion of the workforce has almost tripled:
That’s almost 9 million individuals receiving Federal disability — almost six million more than we would have if the number of those receiving Federal disability was proportionate to the numbers at the beginning of the Ford administration. And if each disabled worker was contributing the per-capita average of $46,546 to GDP, the US would be producing roughly $279 billion more output. Even if only half of the increase is associated with obesity (a very, very, very conservative estimate) that equates to around $140 billion of lost output. That — especially when considered next to the healthcare costs — is a pretty big gap, and that does not even begin to consider that the obese workers not on disability tend to be associated with lowered productivity.
So to what extent has the debt acquisition been an attempt to paper over the cracks of an economy increasingly losing productivity due to obesity and obesity-related illness, and to what extent is obesity linked to the current American employment and growth weakness?
Well, we know that it is possible to blow up a huge debt bubble without a high level of obesity, because Japan has been mired in a debt-fuelled depression for the last twenty years without any associated obesity epidemic, and because the Great Depression was preceded by a huge outgrowth in debt, but no such outgrowth in obesity. And certainly, the United States lives with far greater burdens than the effects of obesity — for example, the quantifiable burden of invading and occupying Iraq and Afghanistan has been greater in the past decade than the quantifiable burden of growing national obesity. This is not to mention the effects of job migration, maintaining a global empire with bases in over 150 countries, and bailing out Wall Street banks. Debt has been a means to paper over the cracks of lost productivity and an American empire living far beyond the means of its productivity — but there is far more to that than just the outgrowth in obesity.
But obesity is causing a significant output loss, which by definition contributes to the wider problems.
People are obese because they can be [just like billionaires]. This is what happens when co-dependent relationships pretty much define the society.
Given a relatively independent existence, neither of these aberrations could exist.
An anedote and a (loaded?) question.
After dating sites, my heaviest spam inflow is hawking help to qualify for disability. I bet that disability* mooching is as bad or worse than food stamp mooching, which, from anecdotal reports — e.g., Mercedes-driving and designer-dressed ladies paying with food stamps — is significant. Any goverment giveaway is likely maximized by employees who want to increase their “business” to earn promotions; private charities are more likely to husband limited resources.
Of U.S. outlays, deficits and debt, how much is for military ventures** compared to entitlements? And what is the trend?
* Of course genuine disability exists and deserves help.
** Of course “blood” — and avoiding instigating more fighting — is more precious than “treasure”.
Yes — I think there is some trend in that direction, but it’s hard to tell exactly how much. I think getting more comprehensive medical reports can help, but that may cost taxpayers a lot. Difficult conundrum.
Interesting perspective on obesity as not just a medical but an economical problem as well. To me, there appears to be less and less societal pressure to keep the flab off, at least judging by the unattractively overweight people who let it all hang out rather than covering up as in the past.
I’d like to see airlines be able to charge more to carry heavyweight individuals. They charge more for excess baggage, why not for excess flesh? Those of us who are not obese are subsidizing the obese when everyone pays the same for a ticket. Not to mention the highly unpleasant subsidy that occurs when a morbidly obese individual spreads out into the space of adjoining seats, occupying the space that one has supposedly paid to rent for oneself. If they are willing to make body contact, as many are, there is little that one can do. Make ’em pay.
To be honest, I agree. I’ve sat next to heavy people on planes before. Challenging.
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I have been known to purchase McDonalds with my credit card. I get reward points!
Puts a whole new meaning to the term “bulge bracket”.
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Aziz, what do you think of the government debt debate going on at Bob Murphy’s site? I can’t make heads or tails of it myself, but it seems to have come to some kind of resolution: http://consultingbyrpm.com/blog/2012/10/my-final-word-this-generation-the-debt-really-is-fundamental.html
At any rate, I don’t trust Krugman et al when they say govt debt doesn’t matter. Maybe I’m just a dumb Joe, but it sounds too good to be true.
This Major Freedom post also seems very interesting: http://consultingbyrpm.com/blog/2012/01/my-names-bob-and-i-have-a-debt-addiction-problem.html#comment-31295
The problem for me I wouldn’t conceptualise as “leaving a debt burden for future generations”. It’s a wealth from taxpayers to bondholders, i.e. from the poor to the rich. Interest works like a transfer payment. I have empirical data to demonstrate this: Japan’s income distribution has widened since their government debt started to explode.
Very interesting point about the taxes. Perhaps you’ll make a post on your Japanese data?
Yeah that’s a pretty good idea, for now make do with this:
The disability increases have largely to do with military disability.
“Waistline bubble” and “debt bubble” – which one will be uglier when it pops?
Over-indulgence in food is probably no different than the over-indulgence seen in nearly every other aspect of social/individual behavior…food, drugs [Rx and illegal], alcohol, TV, computers, pornography, etc.
When a society’s main goal is to satiate the individual, then it really doesn’t matter exactly to what poison that individual is most attracted. Although obesity is more visible, I might suggest that a divorce rate over 50% is far more destructive, spawning an entire generation of dys-functional kids.
I think its nearly impossible to look at any of these things isolated from the whole. The obesity epidemic exists because of the conditions that gave rise to it. There are infinite reasons, probably the least important being assess to McDonalds and the like.
how about comparring eerthing mention to the rising use of credit card use—–EASY CREADIT——-FIAT MONEY!
Hence my McDonald post above. I totally agree with you. It is easier to whack McDonalds on the Credit card, than go to the store and make a home cooked meal which is a lot cheaper.
If you look at takeout/takeaway/fast food as a percentage of retail sales it is quite large. I have a frinds who is in the Subway business. very successful. People go to the Mall because they are bored, and they always eat at the food court.
Go Long Tacos in a GFC
I’m sure there is a like comparison to the manufacturing of computers to obesity too. There is also one to the feds taking “gym” class out of the school systems and to the growth of Fed financial support programs.
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“Japan’s income distribution has widened since their government debt started to explode.” Isn’t this also true in the USA? And how about UK and EU?
100% true, Don.
You do realize that there is a creditor on the other side from the debtor.
If more small businesses felt confident and took out loans, that is a good thing. And it would increase your Y value.
Really reaching here. Also looks like commentators can’t distinguish govt from household debt.
“If more small businesses felt confident and took out loans, that is a good thing.”
Depends. Most small business debt is hardly prudent. The debt model of doing business is not going to work so well going forward. Individuals and businesses are going to have to save and invest, the real way to gain wealth and do business.
In a debt-credit-oriented system “wealth” becomes a derivative of someone else’s ability to pay, not intrinsic use-value.
Too much of that makes the entire system fragile. Not everything in the economic universe is expressed in Y=C+G+I+NX.
Nassim Taleb’s new book is good on this.
In response to ROBC post below, I think an analysis of the UK GDP figures would be a fantastic post. It certainly would shed light on the global recovery. Did the G in Y increase?
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Debt, in and of itself, is bad news, always has been, always will be. Those who have profited, have done so only because of the greater fool theory.
If business is small and local, then one does not need debt. Centralization does all kind of horrible things, paramount among them being the creation/need to obtain credit and go into debt [which only feeds the monster].
It’s not difficult to see why peak debt/credit goes hand in hand with peak centralization [of every damn thing]. The next generation of successful businesses should be so because of much lower debt service and therefore can remain profitable in an environment where there will be much less emphasis on economies of scale.
It is the worship of this god [Productivius] that has de-humanized socioeconomic interaction to the degree that we see today.
The key to survival and eventually prosperity [individually and collectively] is remaining debt-free.
At least one old timer beat you to it, Imp, and in only 23 words: “Neither a borrower nor a lender be, for a loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.”
I presume you are going to write about the British release of figures supposedly proving that we are out of the double dip recession with a growth in GDP recorded for the first time since the crisis started 4/5 years ago.
I too would be interested in seeing the breakdown of GDP. As you know Government spending is a component of GDP. Provided the Government component as a % has decreased, i.e. greater net exports, consumer confidence spending/company profits and business investment, then I would agree with you.
I am very concerned about Government spending in GDP figures. It crowds out the real economy.
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What if 99% of all murderers drank water within 24 hours of committing the crime, but 99.8% of non-murderers drank water before not committing any crime? That would show that thirsty people are more likely to commit murder, I think. 🙂 I wouldn’t be too surprised since people might behave differently under stress.
The main reason why people are fat, I think, is that the gov. is pushing cheap calories like those from corn and grain to save money. That creates a supply which people would not demand if the apparent prices were not artificially lowered. Also, keeping people fat prevents any kind of revolution–they’re both too happy to want to revolt, and too tired to actually revolt.
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–>Grammy Nominations 2011<. On the Early days of the Peak Downs Field from "The Peak Downs Telegraph".
I hope this article has given you some useful information on roofs.
Not only does a digger understand that it is quite possible he may
locate a great deal of gold with very little trouble, but, worse still, he knows he or she work very hard without getting any gold at all.
On the Early days of the Peak Downs Field from “The Peak Downs Telegraph”.