Guest Post: Debt & Obesity

Tyler Durden's picture

Submitted by John Aziz of Azizonomics

Debt & Obesity

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 an 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.

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ACP's picture

For some reason, "Monty Python's Meaning of Life" springs to mind. Talk about bursting.

tsx500's picture

that 1st graph looks exactly like the mirror-image of my 401k

tsx500's picture

...AND of Owe-blah-ma's popularity !

AlaricBalth's picture

Not only are Americans becoming more obese, they are being pharmaceutically drugged into oblivion. Americans spent $31Billion on anti-depressant, anti-psychotic and ADHD drugs in 2011. The usage of these mood altering medication ramps up exponentially over the last 30 years as well.
http://www.imshealth.com/ims/Global/Content/Insights/IMS%20Institute%20f...

As the article stated, correlation is not causation, yet one has to wonder whether the drugging of the American mind has anything to do with the ambivalence most people have towards our current political and economic landscape.

Perhaps Aldous Huxley was foreseeing this when he wrote Brave New World.
"Swallowing half an hour before closing time, that second dose of soma had raised a quite impenetrable wall between the actual universe and their minds."

TruthInSunshine's picture

I usually don't & wouldn't cite to Business Insider, but they had a fairly good article tonight (exception to the general tripe they write) regarding how incredibly massive a financial beating Generation Xers have undergone in the last several years, and cited data (some from Pew, some from other sources) that demonstrated the relatively less beaten up Baby Boomer's aren't doing exactly well.

It's about lower wages, fewer jobs, and a tsunami of more debt (despite the claims of deleveraging anal-cysts such as those on sell-side vision like to throw around often and loudly).

Caveat- This is Business Insider, so there's massively poor writing that makes it unclear if cited figures relate to household wealth or income.

Some fascinating excerpts:

In fact, a census report released in June found Gen X saw a 59 percent decline in median household net worth between 2005 to 2010 –– the largest of any age group.  


According to Pew, in inflation-adjusted dollars, they now earn $56,000 less than their counterparts in 2001.

---

On the other hand, 45- to 64-year-olds saw a $50,000 decline, and those over age 65 were the only age group whose net worth grew over the last decade.

---

The study's findings are only more troubling when you consider how few Americans say they've managed to maintain their retirement savings over the last few years.

 

While ownership of stocks and retirement accounts such as 401(k) and thrift accounts, was down among most age groups, ages 35 to 44 saw stock ownership fall [the most]. 

 

"If there are 5,000 people in this country who can afford to retire I would be astounded," Jane White, President of Retirement Solutions, LLC, told Business Insider.

 

Gen X Has Been Absolutely Clobbered By The Recession

I keep telling people we're headed directly into an economic depression (many of these people, who used to absolutely scoff at this suggestion, no longer scoff at it), whether its onset is rapid, or we get there in drip-drip fashion, and that neither the Bernanke "put" nor all the fiat allowed to be printed and disbursed by our wise legislators will do a single thing to stop this inevitability.

The really amazing thing is that douchebags such as Krugman still rant and rant about how this downturn is cyclical, when it's about as structural as structural gets.

Shizzmoney's picture

Shit, think Gen X has it bad, look at the dip for my bracket (18-35)!

Shit is bad, man.  And it's detoriating........that's why I want a crash, we just need to flush the shit out of the system and wake people up.  People won't wake up until their 401K is gone.

This is the biggest battle in human history - the value of money in society and the fight over currency.  Bigger than nationalism.  Bigger than racism.  The fight over classism and those who run our caste system that is forming in the world really is the longest grind.

Ballin D's picture

It looks at decline.  You can only decline from $0 for so long before they stop giving you debt or you bankrupt out of it.

economics9698's picture

"0.2... Fat, drunk and stupid is no way to go through life, son."

cheetahbaby's picture

I'd take mind numbing drugs too if I had to drag all kinds of bulk around. Even more so if I was looking down the barrel of an obesity burst.

Eireann go Brach's picture

The majority of Americans are so fat they have not seen their ball sacks or feet since their early teenage years !

BlueCollaredOne's picture

Pot calling the kettle black.

Fat Irish

Fat Irish

Fat Irish

Fat Irish

How about instead of just focusing on one countries obesity rate, we ask how come the entire world's obesity rate has tripled?

Eireann go Brach's picture

ZH shoud do a caption contest on what Trump will reveal tomorrow about Obama! The responses will be classic! Tyler?

BlueCollaredOne's picture

Drudge is thinking its this.

Whatever it is, it upsets me that you have faith in whatever Trump has to say.  He is in bed with TPTB.  He has benefited more from bailouts than GE.  He constantly talks about bringing jobs to America, while employing overseas workers to make his shit. Remember when Trump was talking all that shit about birth certificates?  He endorsed the photoshopped birth certificate provided by the obama admin. Trump has used the ponzi to benefit himself. 

He is controlled opposition, and it isnt hard for this guy to see that.  .

You've been here for 1 year, 37 weeks.  Shame on you for not seeing through the false left/right paradigm.

 

The Shootist's picture

He may have stopped with the birth certificate, but he had the cajones to use his pedestal to hammer the topic. It's the goverment media complex that chose to ignore the facts. He tried more than most on the fraud.

BlueCollaredOne's picture

Absolutely not. 

Trump never once mentioned the name Jerome Corsi

To the best of my knowledge Trump hasn't weighed in on Joe Afrpaio.

How do you not see it?  Yes, he hammers the topic, but when you get close he directs your attention elsewhere. 

 

Edit: It's obvious you're my downvote.  The difference between us is when I downvote, I offer a retort to show why. Try it.

The Shootist's picture

I didn't down-vote you. I never agree with anybody 100% of the time. I was pretty mad at the Donald when he tried to shaft Ron Paul and his supporters by saying he had no shot in hell at getting elected.

That said, I like anybody who jabs the great muppet, the commie, the community organizer, the empty suit extraordinaire.

MillionDollarBogus_'s picture

Blue,  I down-voted you.....for no apparent reason............

I'm a troll....

Carry on....

YC2's picture

OH MY GOD NOT A DOWN VOTE!!!  I WANT TO WIN THE INTERNET!

sangell's picture

Obama served and ate the flesh of Osama bin Laden at a White House state dinner.

Dr. Sandi's picture

I could respect him a little more if I believed he actually did.

Eireann go Brach's picture

Oh for fucks sake collared one, it's all in the name of fun to have some fun at Trumps expense! Trump is a fucking imbecile!

Zero Govt's picture

Eireann  - if you think Trump is an "imbecile" i presume you think taking risk and making money is pretty easy yes?

Trump vs. Obumma - no contest, Bumma KO'd in seconds

Look at President O's record, Solyndra, his green revolution, the GM Volt is now walking dead, the LG Chem battery factory for the Volt in seizure. His thug wars are fucking expensive to maintain and he's ramping up the zones to oppress. His key economic advisor, Jon Corzine, is a sick joke. Bumma talks non-stop shit he even needs prompting from an auto-cue he's so dependent. The most over-blown piece of worthless crap in US history

Trump, what's wrong with him, he wheels and deals and stands on his own two feet. He's not a drain on anyone, unlike that Chicago Commie debt-junkie. Got a problem with Trump telling that toerag a few home truths? 

Dr. Sandi's picture

If my parents had handed me the chunk of change Trump was given, I might have been a contender too, instead of a bum.

I also must point out that Trump's various enterprises have gone bankrupt more often than a government subsidized energy company. And bankruptcies always cost somebody... else.

homme's picture

I might have been a contender too, instead of a bum.

You sure seem to be one of the sharper tacks in the ZH drawer, to me. If you're a bum, it's by your own choosing. 

KidHorn's picture

Coming up with alternative energy solutions is very difficult. If it weren't, the world wouldn't be so dependent on imported oil. For every success, there are going to be 100 failures. That's the nature of the business. No different than drug research. The thing is, unless we try, we'll never succeed. There only needs to be one success for the entire policy to be deemed successful, so the failure of a few firms is meaningless in the grand scheme of things.

If you believe Romey is going to be successful at tackling energy issues, you're living in a dream world. Long term, it's going to take a lot more effort than allowing a few more offshore wells and new pipelines.

Zero Govt's picture

The success rate of Govt research and minerals exploration is???

Here's a clue: 0.00000000000000000000%

Govt is a tragedy in every facet of meddling in the economy, from energy to space. It has no biz in economics and no biz in apllying laws or legislation to any part of enterprise. Every sector it invests in is a loss bleeding red ink, it can't even manage its own finances it's so inept (see failure of 600 DC  committees, Congress, Senate and Super Committee to cuts and balancing the budget)

the lights are on, but nobodies home

Govt is the most ignorant, incompetent and destructive institution on earth ..no surprise, it's staffed by cretins 

YC2's picture

Trump, to my knowledge, just takes large leveraged long bets on real estate and his companies often go bankrupt.  Im sure he is smart but he is no MOTU except that people keep extending him credit for some reason.

Zero Govt's picture

failure is a huge part of success, no businessman can launch 10 projects and expect more than a few to succeed.

Trump succeeds amongst the failures, the key is your successes outweigh your losses

Bumma has no commercial skills, no nouse, no balls and no capacity (he can barely read an auto-cue without stuttering). He will never succeed in a million years at backing any enterprise with taxpayer money.. no politician in history has in 3,000 years

TruthInSunshine's picture

Trump is a narcissistic douchebag extraordinaire.

Not that I need to elaborate, but I detest Obama, Romney, the system of Deep Capture that has corrupted our political and justice systems, and loudmouth douchebags such as Donald Trump, who apparently simply can't restrain his id, which has a habit of causing major, repeated embarrassments to his super-ego.

If Trumps "bombshell" is that the Obamas experienced marital strife at some point or another, it will yet again be Trump's id +1, Trump's super-ego -100, an American Public probably more empathetic than alarmed by what will be viewed as a humanizing element to the Obamas (on average), and the question of whether Trump is actually trying to sabotage Romney being raised by republocrats.

Zero Govt's picture

Trump has spent 100,000x less money than Obumma and achieved 100,000x more with it

the bill for Bumma's presidency has more zeros than most of us can count

Trump costs us nothing, he's self sustaining and self sufficient, he does no harm

Bumma is a waste of good air, waste of money and waisting everyones time

Trump will say more in 10 minutes than that vacuous lying tele-prompted puppet will say in his worthless lifetime

Bumma is a piece of shit. Trump is a man

Dr. Sandi's picture

Saying Trump costs us nothing is like saying that having a lamprey on your carotid artery is good for the circulation.

BlueCollaredOne's picture

I understand the point you are trying to make, but lampreys actually can be beneficial to circulation.

They possess an anticoagulant in their saliva that will possibly be used one day to facilitate blood flow. 

Anticoagulants attack blood clots, which obviously impede circulation.

 

Don't take this the wrong way, just wanted to drop some knowledge.

BlueCollaredOne's picture

Wow, I don't understand why you're getting down voted. I also see through the system induced haze.

It will be funny if the topic of marriage is indeed Trump's "bombshell". Seeing as how he is on his third go round, I think this situation would be similar to Mozillo criticizing Corzine on how one should not profit from tanking a compnay. 

Just another example of our failed "leaders."

Daily Bail's picture

Trump bombshell will be that he is endorsing Obama.

Kiwi Pete's picture

As long as he didn't sleep with him.

dick cheneys ghost's picture

that story has been out for hours...........check dailymail.com...........

TeddyBear's picture

He found a birth certificate on the back side of Romney tax returns when he was looking for paper to file his 14th bankruptcy so he pays no tax again.

jaffa's picture

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dick cheneys ghost's picture

The Japanese dont eat as much wheat as we Americans..............modern wheat is a poison worse than fiat money

 

wheat and fiat money...........ITS IRONIC

Harbanger's picture

Without wheat and other grains we wouldn’t have modern civilization. It is easily cultivated, and has great long-term storage. Essential for survival. I understand that we were originally hunter gatherers, but I think we’ve adapted genetically by now. 20,000 years of cultivation with many waves of famine are strong forces in genetic adaptation. Whole grains of course, not bleached white flours.

Optimusprime's picture

It might depend on your blood type.  A seems to do well with carbs compared to O, for instance.  Or so it has been plausibly claimed.

Disenchanted's picture

 

 

 

More likely it's the HFCS from corn that's doing Americans in...

dolly madison's picture

I have more control of what I eat than most because I cook all our food from scratch.  When I first started, I lost weight without effort, but i had cut wheat out of our diet because my daughter had a wheat allergy.  When she got over her allergy, I added wheat back and immediately gained some weight.  I switched to pastry flour because it is low in protein (which is where all the parts of wheat that people theorize are the problems with modern wheat are), and that didn't make me gain weight.  However, the weight loss is not as easy as it was when I was eating no wheat.

So there is one anecdotal report on wheat.  It's enough evidence for me because I am the one, but it may not be enough for you.

Disenchanted's picture

 

 

It could be argued that at least wheat has natural food value, whereas HFCS not so much.

But with wheat(and wheat flour) as with anything a lot has to do with how much is consumed. No?