Chips, Dips, and Red Ink

The unfunded liability of Medicare and Social Security is in the range of $45 trillion. By 2008, it will be over $51 trillion. (See Table 1 at the bottom of this testimony.) Most of this shortfall — 86% — is Medicare-related. Congress is doing nothing to deal with this looming crisis. The Bush Administration pushed through a huge prescription benefit law, which will speed up the fiscal erosion process.

Meanwhile, as a people, we are eating our way to national bankruptcy.

The holiday season is the time to consider this problem. Call it a pre-emptive attack against January’s guilt.


“Frontline” recently re-ran a show that it first broadcast on PBS in April, 2004: “Diet Wars.” It surveyed the various popular weight-loss diets, which are in conflict: Atkins, Pritikin, South Beach, Weight Watchers, the U.S. government’s food group pyramid, and a few others. They all have one thing in common: most fat people do not stick with them. According to one of the physicians interviewed, a Pritikin man, between 80% and 95% of people who lose weight gain it back in five years. So, Pareto’s 20-80 law rules in weight-loss, too. The statistical range of those who keep the weight off is between 20% and 20% of 20% (4%).

The narrator of the show was also the central figure. He had been a child actor on “Leave It to Beaver.” He was putting on weight. His wife had been nagging him to change his eating habits for years. At the time the taping began, he was age 55, 5-11, and 210 pounds. A physician told him he was borderline obese. Well, he was not waist-line obese. You would not have noticed him in a crowd. There was only a trace of belly on him.

This leads me to a preliminary conclusion: nutritionists are making it up as they go along. They don’t know. When I was a child, physicians had no training in nutrition. They ignored the subject. When I was in my twenties, they were dead set against the health food industry. They were insistent that the Shute brothers, the two Canadian physicians/nutritionists, were all wrong about vitamin E vs. heart disease. Today they recommend E, but none of them seems to remember the Shutes and the war against them. In short, physicians get caught up in fads, just like millions of other Americans do. Fads come and go.

One of the experts interviewed insisted that there is an epidemic of obesity among Americans. (This phrase has become a rhetorical epidemic.) She said that increased weight “is associated with” — note: she did not say “causes” — heart disease, cancer, and diabetes. She warned that this epidemic will overwhelm the health care delivery system. I have no doubt that she is correct. The American health-care system is increasingly funded by, and regulated by, the U.S. government. It is slowly turning into something resembling the Post Office.

What is going to overwhelm the system is extended old age. Americans — victims of a pandemic — are living far longer than ever before. Degenerative diseases rather than pneumonia are killing us. Unlike pneumonia, which would come without warning and kill an old person within a few days, degenerative diseases cost a fortune to treat over long periods of time. The government has promised to pick up the tab. That means you and I will write the checks. Anyway, you will. At my age, I’m planning to be the middleman between you, the government, and my physician.

Years ago, the late Redd Foxx made a sagacious observation: “I feel sorry for all those health food people. Someday, they will be lying in a hospital bed, dying of nothing.” His point was on target: something is going to kill us. It’s not that we willingly “give up the ghost.” Something kills us: a fall, a disease, an auto accident, re-runs of That 70s Show.

This raises three statistically inevitable political questions: (1) Will the onslaught against all of us by microbes, known and unknown, bankrupt the government? (2) Will it instead produce a political transformation that saves the government’s budget by requiring oldsters to die at home in their beds at their families’ expense? (3) First one, then the other?

Government is reactionary. It changes only when change is forced on it, either by voters or special-interest groups. So, for as long as the post-64 voting bloc gets out the vote in statistically significant numbers, Congress is not going to change Medicare. But, at some point, in a fiscal crisis, the other voting blocs will unite, show up at the polls, and send Granny home to her bed to die. It will take a very severe fiscal crisis to produce this transformation. I may not live to see it. I hope I do.

We are eating our way to national bankruptcy. Those who eat, drink, and are merry, for tomorrow Medicare picks up the tab, are going to be sorely tried.


The medical refrain today is this: “America is suffering from an epidemic of obesity.” The experts don’t want to put the blame where the blame is: the enormous productivity of capitalism. Americans have a lot of money, and food is cheap. The restraining factor of economic scarcity, which kept most people slim from the dawn of the human race, is being rolled back. We can afford to eat what we like, and what we like is not good for a lot of us.

If you want a symbol of this, think of Wal-Mart’s masked smiley face. He is rolling back prices. But that round face is a tip-off. This guy is fat. Why, that’s not Don Diego behind the mask. It’s Sergeant Garcia!

The biggest profit in groceries is in the packaged, processed foods. Here’s the rule: “If it’s in a brightly colored package, it’s going to make you fat.” In the supermarket, stick with the food that is uncovered — fruits, vegetables — or packaged in undistinguished plastic or cardboard: meats, dairy products, eggs.

Stay away from the aisles with food types listed on overhead signs. These aisles will kill you.

Will the State protect us? Hardly. The public schools make a bundle of money from the sale of soft drinks. They refuse to remove the soda pop dispensers. The government’s number-one agency in our lives, kindergarten through graduate school, has put cash flow above service to the people. Somehow, I am not surprised.

The problem is, the foods that are best for us are bland, common, and very price competitive — low profit margins per sale. The tasty foods are fattening. So it has always been. But in eras gone by, people were not productive enough and therefore rich enough, to indulge their tastes. Henry VIII was, but that was because he was the king.

Today, we eat like kings. We are beginning to look like them, too.

December 3, 2004

Gary North [send him mail] is the author of Mises on Money. Visit

Copyright © 2004