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Benson's Economic & Market Trends

October 12, 2010

"OBESITY AND TAXES"

If what I read recently is correct, the cost of medical care linked to obesity in America is approaching $150 billion a year.  (At least we're not alone; worldwide, an estimated 1.6 billion adults are now overweight, and 400 million of them are classified as obese.)   We have gone from "living off the fat of the land" to being "the land of the fat".  Worse yet, for all those baby boomers heading to retirement, there is no question we will get stuck with the bill for a broken medical system fueled by fast food. 

As tens of millions of Americans remain addicted to the fat, sugar, salt and refined flour found in fast food and high-calorie drinks and treats, obesity has become the number one health issue afflicting not only adults, but teenagers and children.  When I did some further digging into statistical databases on my own, my interest was spiked even further when I noticed a segment on the news about Section 8 Housing.  (Section 8 Housing, or the Housing Choice Voucher Program, is a Federal program created to provide housing assistance to low income renters and homeowners.) In the news story, a crowd of over 30,000 people were in a parking lot in suburban Atlanta swarming HUD officials to get applications for Section 8 Housing.  The size of the crowd was astounding, but, then again, we're coming out of a recession so who wouldn't want a government hand out?  But what really caught my eye was not only the sheer number of people waiting in line, but the size of their bodies; most were simply obese, while others were super-sized. 

This really got my attention and made me wonder what's happening here.  Since President Lyndon Johnson's war on poverty kicked off, our country has spent a few trillion dollars for minorities (who, by the way, are fast becoming the new majority).  My initial thought was that minorities should be in pretty good shape with that kind of money allocated to help them, but then I pulled out my statistical atlas and found that minorities are huge in number:  The African American population is currently in excess of 35 million and the Hispanic population is over 50 million (not counting the 12 - 20 million or so who are here permanently but illegally.)  The US has been keeping tabs on its citizens by race or national origin for a long time and their figures show that in 2009, 72 percent of African American babies, and 51 percent of Hispanic, were born out-of-wedlock.  When I was growing up, starting a family before having a job and being able to support yourself was ostracized, while today it's apparently heavily subsidized.  Today, having children out-of-wedlock is a free ticket for food, housing, and financial independence and it's had horrible consequences for our society.

According to another set of government statistics, only 50 percent of under-privileged children graduate from High School (it was 98 percent in my hometown).  Our government is now spending a fortune to raise a nation of dummies who are unequipped for the modern job market and unable to support themselves, and if we give this trend a generation, another 50 million uneducated adults will be added to the population. For those directly who fail to get an education, this is a tragedy!  The uneducated clearly earn less and far too frequently need to be taken care of in a world that is increasingly competitive.  However, for the Americans who pay tax to help breed the illegitimate and illiterate, the situation is a catastrophe!  

Notice I started out wondering why so many people in the crowd were extraordinarily large, and ended up discovering that tens of millions of young children aren't using their minds and instead feeding their faces.  According to the Center for Disease Control and Prevention, 72.5 million people in America are obese (about 30 percent of the population). For children aged 6 to 11 nationally, 35.5 percent are fat, and for New York City " with its high concentration of minorities " 40 percent of school children are porkers!  The ad that says America runs on Dunkin Donuts is false advertising because Americans don't run; they waddle.  Instead of discipline in the classroom, schools have been turned into fat farm asylums run by the inmates.

Obesity doesn't just create health problems; it creates the types that are frighteningly expensive.  A recent TV documentary on health lamented the fact that for some Native American Indian tribes their diet of white bread, carbohydrates, burgers, soda, and junk food had pushed up the obesity in school children to universally high levels.  The result is 20 " 25 percent of school aged Indians with Type II Diabetes. 

These facts are deadly for taxpayers.  There are 60 million (or 1 in 5) Americans that have some form of disability; at least 48 million have arthritis or related joint pain; in 2006, there were 81 million people with some form of cardiovascular disease from high blood pressure and 8.5 million heart attacks, 6.5 million strokes, and 6 million cases of heart failure.  The high and rising incidence of obesity is directly linked to serious health problems, so that extra 50 to 100 pounds you are carrying around will immobilize or kill you, and ultimately bankrupt our country.  As more Americans get fat and fall apart, is it any surprise that the cost of health care keeps going up?  Unless radical change is implemented immediately, more than half of the new majority will be illegitimate, less than half will have a high school diploma, and close to half will be obese according to U.S. government statistics.

Much has been made of the financial problems that will emerge when the baby boomers retire and start collecting social security.  There is wringing of hands and gnashing of teeth that the young will have to pay for it, but I'm a bit more realistic.  As one of those baby boomers, I know that I'm going to be asked to pay for the massive wave of child obesity we face, as twenty and thirty-year olds begin to experience health problems previously reserved for their grandparents.   

The total tax bill for obesity under ObamaCare could easily rise from $150 billion a year to over $400 billion, adding to the growing burdens on the US Treasury that simply can't all be met.  There is already a movement underway to try and reform and simplify the tax code with a flat tax.  A flat tax would tax household income (and sometimes corporate profits) at one marginal rate.  Unfortunately, the tax rate necessary to balance the budget would still leave taxpayers with next to nothing, so I think our country needs a "fat tax" instead.   Sugary sodas and fast food (as dangerous and addictive as tobacco) should be taxed the way cigarettes are now to discourage consumption and help pay for the massive health costs associated with obesity.  It's time to let the fatties pay!