On Fat and Inflation

Bruce Krasting's picture

Did you notice that Sarah P. took a shot at Michelle Obama over the
issue of obesity in America? Clearly another blunder by the functional
leader of the Tea Party (AKA: Republican Party). I went out to find some conclusive information on this topic. Guess what? It’s not as conclusive as you might think.

For example, whose average health bills are higher? A person who is
overweight or a person who is underweight? Surprise, surprise. Underweight people have higher health care bills than do the overweight set. Possibly the press should start doing belly shots of all those skinny folks (instead of the fatties they always have on).

I don’t want to cloud this issue too much. There is clear evidence that
if one is either below or above an “optimal” weight level it is
statistically probable that this person will have higher lifetime health
care costs. More importantly, there is evidence that overweight
children are increasingly having medical problems. So Michelle is right
to focus her attention on those under 18.

But as a numbers guy I thought it would be interesting to look a bit
closer at the issue of adults who are overweight and compare them to the
rest of society. My conclusion was that the problems of rising health
care costs had little to do with our collective waistlines. Overhead and old people are the real problem.

This chart from the CBO is 2007 data adjusted for 2009 costs. Therefore is reflective of current conditions:

The thin line on the left is the cost for under-weights, as I pointed
out, they cost more on average then the over-weights. Notice that the
average costs between “normal” and “overweight” is really not that big a
deal. Finally, the graph clearly shows that obesity has a real cost
attached to it.

The following chart puts some numbers to the graph. Again, the evidence
connecting obesity to health problems is clear. Notice that the average
estimate from the CBO on all categories comes to $4,550. An interesting number.

From another part of the government (Department of Health and Human Services) I find this information.

Per person personal health care spending for the 65 and older population was $14,797 in 2004, 5.6 times higher than spending per child ($2,650) and 3.3 times spending per working-age person ($4,511).

Using the above information let me spin some numbers.

-Over weight people cost an extra $18.5 billion versus those who have “normal” weight. A significant number.

-People who are 65 or older cost $420 billion per year more than those
who are younger (overweight or not). Therefore the cost of our aging
population is 22X’s the cost of our overweight population. This is a very significant number.

-The total DIRECT costs of health care for all ages comes to $1.3
trillion based on the CBO numbers. But according to both the CBO and
DHHS total health care cost is equal to 16% ($2.3 trillion) of GDP. The
difference of $945 billion is the dreaded Overhead. Administrative costs are equal to 51X’s the cost of over-weights. The latter is an extremely significant number

Please don’t read this piece to be a defense of poor eating habits or
being overweight. That is not my intent. My point is that numbers can
tell a lie. If you have an axe to grind you can make a set of numbers
prove your thesis. You just have to spin them in the proper way.

The mainstream media (and the CBO) are selling a story that people who
weigh too much are the problem. That is not the case at all. A look at
the numbers show that this is a relatively small issue versus those who
are elderly and it is an very small problem when it comes to overhead in
the medical industry.

On the matter of spinning numbers to make a point consider our methods
of defining inflation. The Federal Reserve is pursuing an insane policy
of monetizing debt. What is their justification? INFLATION IS TOO LOW.
But is inflation really so low? Based on the way the calculation is
made the convenient conclusion is that our biggest problem is that
inflation is too small a number. Hogwash.

The Barron, Alan Abelson had this to say on inflation in his weekly commentary.

annual tab for homeowners' insurance is up some 108% since the turn of
the century. During this period, yearly taxes on real estate have
climbed 77%. A gallon of heating oil costs a whopping 150% more. The
average electricity bill is 50% higher. And filling up your rig at the
friendly neighborhood service station is more that twice as much per
gallon. Monthly Medicare Part B premiums have climbed 143%. A humble
potato goes for 67% more than it did 10 years ago, an equally humble egg
93% more, and the price of a loaf of plain old white bread is up a
decidedly unappetizing 50%.


why in the world during these years have all the pundits and Washington
mucky mucks been feeding us that stuff about how there's no inflation?
question. And so is this: With incomes lagging badly, how does the
run-of-the-block household make ends meet? The answer, of course, is:
with great difficulty.

I think the Barron is spot on with this. Inflation that real people are
feeling has very little to do with the GDP deflator that Ben Bernanke
uses to defend his reckless monetary policy. Ben is spinning the numbers
and coming to an inaccurate conclusion. Not at all unlike the MSM and
the CBO who blame overweight people for our rising health care costs. We
are led to believe that fat and the absence of inflation are our
problems. Nothing could be farther from the truth.

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moneymutt's picture

So Bruce, its better, cost wise to fight aging rather than weight?

What I wonder is the cost of eating disorders. I grew up in a boring old, working class MN neighborhood. We kids weren't much on image as our fancy clothes were bowling jackets and such. And I was shocked when I went to college at fancy east coast school how many women just during college had gotten nose jobs etc...

Having said that, by the time 10 years or so had passed from high school, I kept hearing more about how so and so had had an eating disorder, blumenia, anorexia etc...it got to be to the point that any girl in my high school that had been fairly skinny, was not the athletic type, turned out to have some sort of issue. Only the fatter ones, or the athletic ones didn't. I'm exagerrating a bit...but this was in the early 80s and we were less image concious than most of the country, not like we had beaches to hang out at an play volleyball in our bikinis. It made me pause about how really prevalent messed up eating habits around women there are and how detrimental to their health these are. If they simply ate lots of whole, health foods and worked out lots, we'd be doing great as a society, but instead the puke, starve, drank diet cokes etc.

There may be pockets in our society/culture that don't care much about a womens weight, but white women are obsessed apparently and still we have an obsesity problem or an eating disorder problem, even with that real peer pressure.

Unlike fat men, it is scientifically proven, numerous times, that heavier weight women are held back in careers, promotions etc, they are more harshly evaluated. This goes along with looks of women being a bigger issue than it is for men. Women know this without any science needed. Shoot, skinny women know fat is contagious and  avoid fat women, seriously. Ask an ambitious skinny woman sometime.

So there are powerful incentives including career, social, romantic and peer issues for women to be skinny and yet we get fatter or simply do ourselves in with eating disorders. I hardly think the "education" programs health insurers or govt offers will make any difference.

downrodeo's picture

Thank you, as always, for your spin-free insights. Keep up the good work, Bruce.


This weekend, the local news was running a predictive programming piece posing the question, 'will gas prices reach $5 per gallon this year?"

However, I believe I've seen inflation more prominantly in the reduction of services (while paying the same price for the good/service in question).

thegr8whorebabylon's picture

Looking forward to the day the government and popular culture get the feck out of the bedrooms and houses of their freakin subjects.

downrodeo's picture

LOL, you must have eagle eyes...

Stuck on Zero's picture

I've never seen such a mish mash of abused statistics.  It's hard to even know where to start in attacking this pile of garbage.  First off, underweight individuals are usually underweight because they are dying of someting, usually cancer.  That does skew statistics doesn't it?  Their number is very small meaning the total cost to the system is small.  60% of Americans are obese and these individuals carry nearly double the risk of diabetes, heart disease, PADs, colorectal problems etc. as normal weights.  These dieseases are costing us a bundle.  Is the Author obese or just ignorant?


The biggest cost in healthcare is government created waste, granting of monopolies to the AMA, and obscene profits.  Next time you go to the hospital look over your bill and vomit.  You are treated like scum and charged more than the Ritz Carlton. 

Dr. Sandi's picture

You are treated like scum and charged more than the Ritz Carlton.

Are you asking us to believe that anybody other than bums and winos stay at the Ritz Carlton anymore?

crzyhun's picture

Oh please, MO stay away from me. Gov't intervention is only going up, increasing. To spend any time on this issue legitimizes a totally moot point. Bruce you are wasting your time.

Leave me an ounce of room to choose my poison.

apberusdisvet's picture

The NWO will make all this debate obsolete.  The non-productive members of society, autistic children, for example, and anyone over 65 will become just another version of Soylent Green, so says the brother of Rahm, who is a WH advisor and thinks demographically targeted genocide is the answer to all of the world's problems.

the grateful unemployed's picture

maybe they're putting the same people into smaller packages, so the Medicare program has to buy more of them.

Oso's picture

bruce, between this and the over-paying by once cent thing, you are cracking me up.  Love it.

FullFaithAndCretin's picture


All these pesky old people hanging around using up oxygen. Anybody willing to lay a bet on when voluntary euthanasia legislation gets introduced in the US? I give it 10 years.

Soylent bitchez

tamboo's picture

clearly the answer is to consume more high fructose corn syrup and neotame.



What_Me_Worry's picture

If the chart is for all adults, wouldn't seniors help skew those statistics?  It seems like the elderly are more likely to be underweight than those in their 30's-40's.  If there is a higher percentage of elderly in the underweight category, then that would naturally move the perceived cost higher.  People who are chronically sick, cancer, etc. might also move the values.

I have always thought they have unfairly picked on overweight people and cherry-picked the data to prove their point.  I've always thought that a person's amount of exercising would make a larger role on health, regardless of being underweight or overweight.

In the end, selling fat people easy solutions to their problem has always been a huge money maker.  Since the media outlets depend on that revenue for earnings, they will continue to pander to "fat is unhealthy" ideals.

Same way CNBC will always be pro-JPM, Citibank, BAC because they contribute so much revenue to their gross.

buzzard beak's picture

I strongly support Sarah on this one. Go on, all you tundra trash, have a few more dunkin donuts slathered in sweetened byproduct. You ain't no use to nobody skinny.

??'s picture

another contributor here has used the term biflation where your assets deflate whilst your expenses inflate


On Bloomberg today Dan Greenhaus was interviewed and quite aptly described how the Bernank has protected those whose wealth is exposed to the equity markets at the expense whose wealth is exposed to assets such as houses, savings accounts etc. 

KickIce's picture

I think there are several of our politicians that can't make a decision without considering the political implications, although I think the Obamas take this to a whole new level.  He has been well trained in "reforming" our government.

lamont cranston's picture

I really, really wonder how they arrive at these figures. It's like the old joke, "In a reversal from last week, the AMA now says salt is good for you", only to be followed up a week later with "AMA again goes negative on salt". 

I guess it's who pays for the study, kinda like watching football this past weekend and the announcers were talking about something called the Big 10 that was going to kick everyone else's ass on Saturday. Turns out most of them played football for this Big 10 thing. YGWYPF.





??'s picture

Hey Bruce you many want to check out this article from the CSM


Could Sarah Palin be right about Michelle Obama?!


...Of course, what comes from the White House is rarely just advice but is part of an overall strategy encouraging the dependence of people on the state. We are weak. We must be helped in every area of our lives by our “betters” – those who wield power but so generously give of themselves to us.




ebworthen's picture

Feed the obese to hogs to reduce the price of bacon.

Put obese children to work in Chinese factories.

Restrict the income of all members of Congress to the median wage and put them on Medicare only.

Eliminate health "insurance" and give people a tax deduction for any money saved for healthcare (i.e. - not taxed when saved or spent).

The Sarah Palin, Michelle Obama debate is ridiculous.  Politics is a distraction.  The government can go to hell as far as I'm concerned; let them dream their dreams of controlling people's appetites in some other reality or better yet send them all to the guillotine.

Dr. Sandi's picture

The government can go to hell as far as I'm concerned

Don't look now, but they already did that.

Escapeclaws's picture

Is it just me? I really get the impression Bruce doesn't like social security and medicare after reading many of his columns. Probably doesn't like welfare either.

"People who are 65 or older cost $420 billion per year more than those who are younger (overweight or not). Therefore the cost of our aging population is 22X’s the cost of our overweight population. This is a very significant number."

"The average electricity bill is 50% higher. And filling up your rig at the friendly neighborhood service station is more that twice as much per gallon. Monthly Medicare Part B premiums have climbed 143%."

One could easily imagine that attacking these entitlements is the real intention of this particular column.  However, it's probably just me thinking that. Still, you never know...

RagnarDanneskjold's picture

It's very significant because the aging portion of this population is set to explode, while the overweight part remains constant.

However, this whole debate points to a very, very good reason to abolish Medicare and Medicaid completely in their current forms. Once the government or another third party start paying the bills, they can dictate your lifestyle. Very few people even notice this, which is why many fiscal conservatives and otherwise small government or civil libertarian types fall into the trap of immediately thinking that the answer to higher healthcare costs is tyranny. This is a great way to introduce fascism because there are so many "correct" arguments. It fights people "abusing" the system, it saves the taxpayers money, it's healthy to be in shape, etc.  

The irony is that in America, we get half-assed fascism, more like socialism on steroids. They will give you all the regulations and restrictions, but never follow through. Instead of making all fatties on the dole participate in forced calisthenics until they became fit, but leave other people alone, they will tax and ban everything in sight, but never actually deal with a single obese person, thus keeping alive the necessity for all the restrictions, taxes, etc. It's like we never left kindergarten. Welcome to the happy shiny fascist future.

Cruel Aid's picture

Bernankes only CPI is housing. He has tunnel vision and we are still in acute deflation.

And yes, before you die, you are probably considered underweight. The numbers alone don't always tell the story.

Dragline's picture

Regarding the weight issue, the author clearly confuses correlation with causation, as others have pointed out.  There are many medical expensive diseases that cause people to waste away, such as cancer.  There are very few that cause people to be obese, and in fact it works the other way around.

For example, it is has been well documented for many years that obesity leads to diabetes, which  leads to diabetes, which costs hundreds of billions per year (about as much as cancer) and kills hundreds of thousands of Americans.  This was well known prior to the last presidential election and has nothing to do with politics.

See  http://www.usatoday.com/news/health/2008-01-23-diabetes-cost_N.htm

Or look it up yourselves.

Bruce Krasting's picture

Maybe you should read it again. I said obesity was a real issue. Said that a few times.

My comparissions were all "normal" vesus "overweight". Let me try a different way:

The incremental cost to our society of the 35% who are designated as overweight is equal to 0.8% (.008) of total spending. The incremental cost of those over 65 is equal to 19%.

Just trying to create some perspective on this issue.

Dr. Sandi's picture

Thank you for your ongoing efforts to inform us, Bruce.

What you say here makes the real point.

We need to spend less time encouraging people to lose weight and get them to lose birthdays instead. The savings will be enormous. And I'm pretty sure we're going to see this plan subtly put into action over the next few years.

The Vikings sent the oldtimers off on an ice floe. The plains Indians would go for a long hike when it was "their time."

I'm guessing that our newly arising class of old, ever skinnier Americans will help us reduce health care costs in the same way.

This is why I'm planning to "Stay Fat in 2011!"

Mark Medinnus's picture

Public numbers be damned.  When my rump plumps or my waist inflates, I feel lousy.  Period.  

A thimble for your thoughts, BK.  Heavens, for a ZH post, this reads too National Inquirer for my taste.  But I enjoyed the eye candy: the colors, italics, underlining, puppets, and stuff.   

Ragnarok's picture

Did you notice that Sarah P. took a shot at Michelle Obama over the issue of obesity in America? Clearly another blunder by the functional leader of the Tea Party (AKA: Republican Party).


Sarah Palin the Neo-con is the Media's choice for the leader of the Tea Party, not the Tea Party's.  Sarah doesn't even poll well.

XitSam's picture

"... the Tea Party (AKA: Republican Party)."

This shows how little you understand about the Tea Party or the Republicans.  Unless you made the misstatement on purpose.

Mercury's picture

Just as a wild guess, very overweight Americans are clustered at the lower end of the socio-economic spectrum and (as a group) tend to not give as much of a shit about going in for regular check-ups or preventative medicine.

By contrast, skinny, neurotic yuppies are probably over-consumers of medical care (If your kid is named "Aiden" or "Dakota" they are 100 times more likely to be diagnosed with a trendy allergy or have a prescription for psycho-active drugs I bet).  Plus, the women in this group tend to wait longer to have kids (when their fertility is less robust) and make much greater use of expensive fertility treatments.  So that probably explains a lot about underweight people racking up higher health care bills.

Obamacare has a plan for dealing with expensive old people though, don't worry.

But most importantly, if we don't have socialized medicine it won't matter  how high someone else's health care bills are (although the health of others may matter for different reasons).  When the government socializes everything I guess it will be OK to pick apart every aspect of individual lives and muscle them back to the mean -right?

What is beyond mathematical debate however is that Jackie O rolls over in her grave every time Michelle crams her substantial derriere into a scoop-neck St. Laurent-esque frock and pearls in a vain attempt to lend an air of sartorial grace and class to her husband's national soul destroying administration.

Actually the Obama's have done a pretty good job at showcasing American music and musicians at the White House.

velobabe's picture

making my mercury boil, good call on ms derriere†

casey13's picture

If the government were not paying the bills than no one would care except for the individuals involved.

This is just another example of how socialism causes the loss of freedom.

Our personal lifestyles are now everyone's business.

Dan Duncan's picture

The inclusion of underweight people is misleading. Many are underweight because they are already sick.  They don't get sick because they are underweight.

Also, the otherwise healthy underweight person tends to live longer than normal weighted and above...How does all this account for underweight and elderly?  Did the fact that the underweight person made it to old age, and ultimately to more doctor visits influence this underweight figure?

What of the overweight people who also made it to an older age?  How much of the elderly health bill do these people eat up?

The fewer overweight people we have, then the fewer obese people we will have.  Addressing our increasing waistlines, then has a greater payoff in reducing the costs associated with BOTH overweight and obese.

Finally, with few exceptions, being overweight is much more a matter of personal choice (and education--which is a societal choice).  Without going on an existential tangent, being elderly isn't.  Instead, making it to old age is the product of genetics and wise choices.  So the comparison between overweight and elderly fails to account for the fact that the costs associated with being overweight should be--in theory--more easily managed.   

The finger pointing at the overweight eating up too much of our healthcare is entirely justified.

topcallingtroll's picture

Alan Abelson is a stopped clock and he is always right twice a day.  I quit reading that loser a long time ago when he said the s and p was topping out at 630.  What a loser.  As long as I run faster than inflation runs I'm ok, and I'm calling a top in Sarah Palin.  She is way over exposed and can only go down from here.

something fishy's picture

Seems to me that running faster and faster to keep ahead of inflation is exactly 

what TPTB would like to see us all doing. And I do hope you're right about SP.

Bruce Krasting's picture

I love the Barron. Yeah he is a bear. But that is the point isn't it? The guy is the editor of Barrons! And he is a bear.

Read the rest of Barrons. The only words they know is. "Buy this stock now!". But the editor says go short.

What's not to love?

Don Birnam's picture


Bruce -- don't forget to enter your answers for the Barron's Annual Forecasting quiz. As the winner, you could win "lunch with Andrew Bary in Manhattan." Sharpen your pencil.

CulturalEngineer's picture

RE: "My point is that numbers can tell a lie. If you have an axe to grind you can make a set of numbers prove your thesis. You just have to spin them in the proper way."


And a couple of thoughts re the statistics on healthcare costs plotted against weight.

... 'externalities' can add some important additional factors.

(I'm just throwing out the questions here... don't have the answers... but the answers would likely affect how these numbers are viewed)

1. Are the statistics based on the average weight over time of the patient? Or is it the weight at the time expenses were incurred? (Wasting diseases like cancer and many others can turn fat people into skinny ones fairly quickly... and it's then that the BIG medical expenses really accumulate.)

2. "Fat" pathologies (heart disease, stroke, etc.) can often kill quickly and (bluntly) with few associated medical costs... (dropping dead in the street is quite a bargain in terms of medical expenses)... Skinny people may avoid many 'cheap' ways to die.

3. On the other side of the argument are the expensive and chronic 'fat' diseases like diabetes... and the longterm costs of things like plavix for heart conditions.

I'm sure I'm neglecting many other factors. But the point stands.

So your point is correct. You can use statistics to prove that the sky is yellow and the sun is blue if you're clever enough... hmmmm, I'll have to try that.

And you're right about age as a much more significant correlating factor.

Unfortunately, while it IS possible to address weight... imploring people to stop having birthdays is a very tough sell.


velobabe's picture

my mantra, age healthy and it is a gift, if disciplined.

Bitch Tits's picture

I've always wondered how many old folks actually need those medications? Old doesn't necessarily equate to sick, but you wouldn't know it in our society. Aches and pains are a natural part of growing old, as the machine starts to show signs of wear and tear, and with old age comes abnormal fears regarding mortality.

Old folks were made for doctors and doctors like making money as much as the next guy.

DonnieD's picture

Bingo. They make a prescription for everything now. Doctors try to prescribe away age the same way the government tries to eliminate recessions.

snowball777's picture

And collect enough snake-oil kickbacks to cover their greens fees until it's their turn in the barrel.


IslandMan's picture

From what I know of how these things are measured, "overweight" is a BS term, as they make no allowance for "build".  "Obese", however, is a term that means something.

Reggie Middleton's picture

Exactly. you can not determine the health of a person by their body weight. muscle tissue weighs more than fat tissue, if a person goes lithe and muscles up they will weigh more and still be healthier than a truly obese person at the same or similar weight. in addition, the elderly cost more to maintain because you are fighting mother nature to maintain them. Artificially skirting death is nit going to be cheap, but then again the alternative is not all that desirable, is it? be aware that the state of obesity is actually more unnatural an occurrence than old age, and is made possible - particularly for those in poverty - by processed foods.

then there is the issue if cause and effect. man serious illness cause patients to lose weight, not gain weight, The illnesses are the cause of the medical expenses, not the longer germ average weight. cancer patients who have lost a lot of weight are therefore lumped into the healthier underweight category. this does not happen on the overweight side, in general,
I agree with Bruce that numbers are easily spun, but the primary reason that is possible is that the spinners oft take advantage of the ignorance and general gullibility of the intended audience.

velobabe's picture

i am go the mediterranean diet, drink alcohol!

hbjork1's picture

Right on again Reggie!  And Happy New Year!

Where oh where did "common sense go?"


ColonelCooper's picture

Coming from someone considered "obese" by BMI, I respectfully disagree.   There is NO figuring for build.  I have a physical job, work out and eat right.  At 6'3" and 245, (still wearing the same size jeans since I was 16) I am considered obese.  Hard to take it too seriously. 

velobabe's picture

well i am 6' tall and weigh on a good day 115lbs. and work out, not like i use to. just to let you know something. woman after menopause don't have as much testosterone, so you lose muscle. i notice this in myself. but i am still strong. i can pick my body up into the air, doing lotus pose, about 5 inches high and sustain it for a while. i still wear my clothes from my teen years. i think this is all just poop poo. i have very low body fat. i can't remember the last night i have ever been sick. tummy sensitive, some times. fuck it, i just don't like food or eating it. it messes with my teeth. i think you live longer if you maintain the same weigh your whole life and not swing up or down so much. key = balance.

good to see you again colon. your looking good, like your cowboy hat.

DonnieD's picture

I'm in the same boat. If you're 6'0" 210 and work out you're considered "obese". Meanwhile the "skinny-fat" guy who is 6'0" 180 with a pair of tits on him is in good shape according to these charts.

jnesfield's picture

It is the off season she (Sarah P) is playing to her base as is the White House come 2012 they will move to the middle to fight over eggs as in Lilliput.  Politics in the off season is the domain of the cult followers on both sides so as they hurl idiotic nonsense at each other across the aisle they play an off season game.   In these hurls of offal they test their base (cult followers) for loyalty.  They are really selling to vested interest their ability to have people like them so all they are trying to do is stay in the public eye waiting for the harvest.  Christine ODonnell is a good example she was the Snooki of the 90s and ran for US Senate in Delaware.   The mildest reference to being a public figure provides the option to be a politician and that is the sum total of the requirements to run and hold office in the US.  Bedtime for Bonzo is not a film title I would associate with a President, but he followed on the heels of Billy Beer.   I always liked Nixon he was tricky and didn't care what anyone thought, but he triangulated the Chinese and Soviets preventing World War III after the Checkers the dog scandal.   If the Obamas prevent one child from having a massive heart attack in forty years then it would be a worth while effort.   If Sarah P does not become a grandmother again of an illegitimately conceived child I might take her more seriously on her illusion of morality she likes to flaunt.   In general political figures are not noble and tend to like to appear as if plaster saints when in reality they are as flawed as we are.  We get the leaders we deserve and the polls are as flawed as the people taking them.  The US reads at a below sixth grade level and has for the large part no skills other than consuming and not paying their bills so the only available resource is providing cannon fodder for the Worlds conflicts which goes hand in hand with our failed educational system.   It is not about questioning the valid and noble sacrifice our service people make and have made but rather our inability to escape this cycle of pathetic ignorance of the cult followers.  Seriously is anyone able to govern for four years?