The Cynical Economist

Fat Future: 42% of Americans May Be Obese by 2030

By 2030, 42% of Americans will be obese and 11% of Americans will be severely obese, Duke University and CDC researchers predict.

These shocking numbers actually are conservative, note study researchers Eric A. Finkelstein, PhD, and colleagues.

Finkelstein’s team based its calculations on self-reportedweight and height from people participating in the CDC’s Behavioral Risk Factor Surveillance System. Obesity is defined by body mass index (BMI). People tend to underestimate their weight and overestimate their height. The researchers corrected for this. They also factored in state-by-state trends in factors affecting obesity, such as the number of fast-food restaurants per person and the cost of unhealthy, calorie-dense foods vs. healthy foods.

Check out the trailer for HBO’s documentary ‘The Weight of a Nation’

America’s Hidden 8% VAT: Sickcare 

From Of Two Minds 

by Charles Hugh Smith

American sickcare is sick for a number of reasons. One is that it is highly profitable to manage chronic lifestyle diseases such as heart disease and diabetes, while it is essentially profitless to encourage healthy lifestyles based on diet, fitness and positive mental health practices.

As a result, sickcare has zero interest (other than lip-service) in fostering (or emphasizing) prevention or in providing an integrated system of health which starts with what we do and eat every day.

This chart describes a few of the causal factors:

It’s also highly profitable to turn people into couch-potato media addicts who are also hooked on sugary, fatty, salty snacks, fast food and packaged food. Convincing people a handful of pills is all they need to restore health is also highly profitable.

The U.S. has seemingly intractable lifestyle-related health issues that sickcare simply isn’t dealing with effectively; it can even be argued that sickcare is actively making the problems worse in a multitude of structural ways. 86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.

If you don’t think chronic ill-health and the 8% sickcare VAT is a threat to national security, please consider this slideshow map of the U.S. which depicts the obesity epidemic on a state-by-state basis:

Centers for Disease Control, U.S. Obesity Trends 1985-2007

Here’s the key question: what else could we do with the $1 trillion that we currently squander every year on fraud, paper-pushing, duplicate/useless tests, highly addicitive prescription drugs, etc.? That $1 trillion is the 8% sickcare VAT. That’s enough to reduce the Federal deficit to a manageable level.

The second question is: is there a more effective way to spend the other $1.5 trillion we spend on healthcare? Answer: obviously yes. We could start by understanding health is integrated with lifestyle, diet, fitness and our environment, and that relying on quasi-monopolistic cartels and Federal agencies to provide “solutions” is what got us in this quagmire in the first place.

Our national security and fiscal viability both depend on radically transforming sickcare before it brings down the nation.

Read the entire article here… 

and

here is more data, statistics ,trends and graphs at the CDC web page

From WSJ
By Robert Frank

One of the most controversial issues surrounding inequality is work effort.  Some on the right argue that  top earners are successful in part because they work harder than others. Many on the left argue that the middle class and poor work just as hard – maybe even harder, with multiple jobs — but that the economic deck is stacked against them.

A new study offers evidence  that higher-educated (and therefore higher-earning)  Americans do indeed spend more time working and less time on leisure than poorer income groups. In fact, while income inequality may be growing, “leisure inequality” – time spent on enjoyment – is growing as a mirror image, with the low earners gaining leisure and the high earners losing.

The paper, by Orazio Attanasio, Erik Hurst and Luigi Pistaferri, finds that both income inequality and consumption inequality (the stuff that people buy) have increased over the past 20 years.

The more surprising discovery, however, is a corresponding leisure gap has opened up between the highly-educated and less-educated.  Low-educated men saw their leisure hours grow to 39.1 hours in 2003-2007, from 36.6 hours in 1985. Highly-educated men saw their leisure hours shrink to 33.2 hours from 34.4 hours.  (Mr. Hurst says that education levels are a “proxy” for incomes, since they tend to correspond).

read the rest here

The U.S. economy grew at a rate of 2.4 percent since the second half of 2009, which hardly represents a comeback, Stanford University economics professor Ed Lazear said Wednesday.

“The problem is, this is not a recovery at all,” he said on CNBC’s “The Kudlow Report.” “We haven’t made up for the lost ground, and that’s unprecedented.”

Lazear, who also chaired President George W. Bush’s Council of Economic Advisers from 2006 to 2009, authored a Wall Street Journal op-ed piece this week, titled, “The Worst Economic Recovery in History,” in which he used historical data to argue that the current period of growth is anemic at best.

In the article, Lazear writes: “The Great Depression started with major economic contractions in 1930, ’31, ‘32 and ‘33. In the three following years, the economy rebounded strongly with growth rates of 11 percent, 9 percent and 13 percent, respectively.”

……………………………………

Lazear noted that the Dow was near 14,000 pre-recession and now struggles to maintain 13,000.

“It’s four years later,” he said. “We should be is approximately 12 percent better, and we’re not.”

Lazear laid blame for the economic sluggishness with the Obama administration’s policies on trade, taxes, regulation and health care, all of which “have not been conducive to business growth.”

From Carpe Diem

From Jeff Jacoby in today’s Boston Globe:  

“For decades, American politicians have waxed passionate on the need to put college within every family’s reach. To ensure that anyone who wants to go to college will be able to foot the bill, Washington has showered hundreds of billions of dollars into student aid of all kinds — grants and loans, subsidized work-study jobs, tax credits and deductions. Today, that shower has become a monsoon.

The College Board, which tracks each type of financial assistance in a comprehensive annual report, shows total federal aid soaring by more than $100 billion in the space of a single decade — from $64 billion in 2000 to $169 billion in 2010. And what have we gotten for this vast investment in college affordability? Colleges that are more unaffordable than ever. Year in, year out, Washington bestows tuition aid on students and their families.

Year in, year out, the cost of tuition surges, galloping well ahead of inflation (see chart above). And year in, year out, politicians vie to outdo each other in promising still more public subsidies that will keep higher education within reach of all. Does it never occur to them that there might be a cause-and-effect relationship between the skyrocketing aid and the skyrocketing price of a college education? That all those grants and loans and tax credits aren’t containing the fire, but fanning it?

Directly or indirectly, government loans and grants have led to massive tuition inflation (see chart). That has been a boon for colleges and universities, where budgets, payrolls, and amenities have grown amazingly lavish. And it has been a boon for politicians, Republicans and Democrats alike, who are happy to exploit anxiety over tuition to win votes.

But for students and their families, let alone for taxpayers who don’t go to college, it has been a disaster. The more government has done to make higher education affordable, the more unaffordable it has become.”

MP: The chart above shows that the rising costs of a college education (7.5% per year) have far outpaced rising medical costs (5.7%)  and housing prices (4.2%), and have risen annually at twice the average inflation rate (3.8%).  The graph also illustrates that the rising costs of college and the resulting college tuition bubble make rising U.S. home prices and the resulting housing bubble look relatively inconsequential by comparison.

From The Guardian
by Patrick Collinson

So who is right: the lone voice warning that the miracle growth is over, or others who claim this shows a deep misunderstanding of the country?

Diana Choyleva is the bear in the China shop. The analyst from Lombard Street Research says last week’s China GDP figures – which revealed growth slowing to a three-year low – are an early warning signal of the hard landing to come.

Dig deep into the data, she says, and you’ll find that Chinese exports are falling. All that is propping up the economy is gargantuan investment in infrastructure financed by state- directed banks that look more and more like Western banks just before the collapse of 2008. Except they are bigger and badder.

Choyleva radiates a pessimism that is almost unique among Hong Kong’s investment professionals. Westerners, she says, are so awed by the China dream they can’t see the coming China-geddon. The excesses that drove the West into a financial crisis and, in Europe, an economic depression, are gripping the Chinese economy, too. “It’s just that they have become bigger,” she says. The country’s vast pool of savings is being squandered on dead-end infrastructure projects that make Japan’s roads to nowhere look like prudent planning.

“China’s miracle growth is over,” she proclaims, saying that if Chinese policy makers get it right they might, just, see the country’s growth halve to 5% or below. Get it wrong, and the consequences could be devastating not just for China but for the rest of the world, too. “Building those roads to nowhere can go on for a long time, but ultimately financing it will become unbearable,” warns Choyleva.

As long as US and European consumers were accumulating colossal amounts of debt, much of it to pay for goods made in China, the merry-go-round worked just fine. But as western economies deleverage, the driver for growth has been extinguished.

read the rest here

High taxes burden working people

This year, Americans had to work from Jan. 1 until today just to earn enough to pay their total annual tax bill. Starting tomorrow, you can start working for yourself.

That we must work 107 days out of the year just to finance government spending is not right. But adding insult to injury is the reckless way government manages our money.

Americans are willing to pay to support vital services like national defense, roads, fire and police protection, education and a safety net for the elderly and the poor. What is intolerable is the hundreds of billions of dollars of our hard-earned money that is wasted on unnecessary programs, duplication, red tape, fraud, abuse and mismanagement. Over the past decade, the federal government has made hundreds of billions of dollars in improper payments…..

The Laffer Curve Shows that Tax Increases Are a Very Bad Idea – even if They Generate More Tax Revenue

The Laffer Curve is a graphical representation of the relationship between tax rates, tax revenue, and taxable income. It is frequently cited by people who want to explain the common-sense notion that punitive tax rates may not generate much additional revenue if people respond in ways that result in less taxable income.

Unfortunately, some people misinterpret the insights of the Laffer Curve. Politicians, for instance, tend to either pretend it doesn’t exist, or they embrace it with excessive zeal and assume all tax cuts “pay for themselves.”

Another problem is that people assume that tax rates should be set at the revenue-maximizing level. I explained back in 2010 that this was wrong. Policy makers should strive to set tax rates at the growth-maximizing level. But since a growth-generating tax is about as common as a unicorn, what this really means is that tax rates should be set to produce enough revenue to finance the growth-maximizing level of government – as illustrated by the Rahn Curve.

 Chart of the Week: The Tax Burden on American Households

Large tax increases are just months away. Jan. 1, 2013, is already being dubbed Taxmaggedon. Seven existing tax policies will end and 18 new taxes from Obamacare will begin, leading to a $494 billion tax increase at the start of next year. Heritage tax expert Curtis Dubay warned about the consequences:

Although these tax increases will not start raising new revenue until next year, they are having a negative impact on the economy today. Families, businesses, and investors need to know how much tax they will pay in the future before making important economic decisions. The uncertainty caused by Taxmageddon means they are stuck in neutral while they wait for President Obama and Congress to act. This is slowing job creation and stopping many of the millions of unemployed Americans from going back to work.

Taxes—Who Really Is Paying Up

Some multimillionaires do pay a lower effective income-tax rate than some middle-income taxpayers; receiving a chunk of your income via long-term capital gains rather than a paycheck is just one reason that happens. But the top 20% of income earners paid 70% of federal taxes in 2007, according to the most recent data available from the Congressional Budget Office.

That group also pulled in 60% of total pretax income, according to the CBO.

Meanwhile, 46% of taxpayers don’t pay any federal income tax, but they often pay a hefty portion of their income to levies at the federal, state and local level.

Those include payroll taxes for Social Security and Medicare; state and local sales taxes on groceries, clothing and other purchases; and federal and state excise taxes on things such as gas, cigarettes, alcohol and airline tickets.

Americans Making Over $50,000 a Year Paid 93.3 Percent of All Taxes in 2010

Americans making over $50,000 paid most of the federal taxes that were paid in the U.S. in 2010.

According to statistics compiled from the Internal Revenue Service (IRS) by the Tax Foundation, those people making above $50,000 had an effective tax rate of 14.1 percent, and carried 93.3 percent of the total tax burden.

In contrast, Americans making less than $50,000 had an effective tax rate of 3.5 percent and their total share of the tax burden was just 6.7 percent.

Americans making more than $250,000 had an effective tax rate of 23.4 percent and their total share of the tax burden was 45.7 percent.

Out of the 143 million tax returns that were filed with the IRS in 2010, 58 million – or 41 percent – of those filers were non-payers.

Special Report: Tax time pushes some Americans to take a hike

Last year, almost 1,800 people, renounced their U.S. citizenship or handing in their Green Cards. That’s a record number since the Internal Revenue Service began publishing a list of those who renounced in 1998. It’s also almost eight times more than the number of citizens who renounced in 2008, and more than the total for 2007, 2008 and 2009 combined.

But not everyone’s motivations are as lofty as Superman’s. Many say they parted ways with America for tax reasons.

The United States is one of the only countries to tax its citizens on income earned while they’re living abroad.

Media Misinformation Campaign Succeeds: ‘Most Americans Say Tax System Favors Wealthy’

As procrastinators rush to file their 2011 tax returns by the Tuesday deadline, a new poll shows more than two-thirds of Americans believe the revenue system benefits the wealthy while being unfair to average workers.

As this IRS table clearly shows, people making $200,000 and up most definitely pay a higher federal income tax rate than those making less:

Jobless rate at 3-year low as payrolls surge - Really? LOL. The report is a bad joke. I just cannot believe that such a spinning and twisting of the truth are done by the government and the media that once were hold as world wide example of freedom and democracy. We are really witnessing the fall of our great nation.   

More pistons in the economic engine have begun to fire, pointing to accelerating economic growth. One of the happiest persons reading this job report is President Obama…

Jobs Preview 2012: The Year of the Missing Worker - 

• There are over 3 million “missing” workers who should be in the labor force, but are not.
• If labor force participation were in line with demographic projections, the unemployment rate would be above 10 percent.
• The possibility of large numbers of people reentering the labor force makes it very difficult for the unemployment rate to fall below 8 percent by Election Day.

Top five regrets of the dying - On the other hand…

A nurse has recorded the most common regrets of the dying, and among the top ones is ‘I wish I hadn’t worked so hard’. What would your biggest regret be if this was your last day of life?

The ‘Financial Recession’ Excuse - Happy days are here again heh? Nope! All “good” economic news are lies 

Never before in postwar America has either real per capita GDP or employment still been lower four years after a recession began. If in this “recovery” our economy had grown and generated jobs at the average rate achieved following the 10 previous postwar recessions, GDP per person would be $4,528 higher and 13.7 million more Americans would be working today.

Earning Less – Why The Poor Get Poorer - Do they have a choice?

Working longer hours but earning less — the plight of the average American continues.

Getting Nowhere, Very Fast - 

California has a huge state debt and Washington has a huge national debt. But that does not discourage either Governor Jerry Brown or President Barack Obama from wanting to launch a very costly high-speed rail system.

Someone once said that government is the illusion that we can all live off somebody else…

Streetcar work begins, total cost rises - 

The city of Atlanta launched work on a new, 12-stop downtown streetcar line Wednesday — and officials disclosed that the project’s estimated price tag has risen by more than $12 million. Much of that increase is paid for by outside grants.

Local and federal leaders at a kickoff event said the money will be well-spent, despite critics’ doubts that ridership will justify the costs.

“This is about jobs,” said Ray LaHood, U.S. Secretary of Transportation. “This is about creating an economic corridor. … This will be a magnet for tourism.”

Critics, however, say the project will not draw enough traffic to justify its cost.

Reid: Senate will not pass a budget this year - Ha! Who needs a budget, if they have control over all of the other people’s money?

“We do not need to bring a budget to the floor this year — it’s done, we don’t need to do it,” Reid said, according to The Hill.

“We Are Blessed To Have Someone Of Barack’s Intellectual Caliber”… - 

“Since the day that I’ve met my husband, I’ve watched him work tirelessly to try make a difference in other people’s lives. He does that because for him, all of this is all very personal. You know Barack’s story,” the first lady said. “Barack and I both watched our families work hard to make ends meet.”

“That has been the direction of his choices through out his life,” Obama said. “How can he use his blessings and his gifts to help as many people as possible.”

“We are blessed to have someone not just of his intellectual caliber but with such a strong grounding of values that all of us identify with — these basic American values that have made our country great and will continue to make us the strongest country in the world,” the first lady said.

 What If Barack Obama And Paul Krugman Ran A Business? - 

This winter has brought a useful tutorial on capitalism courtesy of the media, the Democratic party and President Obama. They have illustrated for us how the depredations of profit-seekers crush American aspirations.

Parents Snared in $100 Billion College Debt Trap Risk Retirement - 

Terry Williams borrowed about $7,000 to earn a degree from Spelman College 38 years ago. For her youngest child, a sophomore at Belmont University in Nashville, she will take on almost $40,000 in parental loans.

Bloomberg warns of budget deficits in coming years - Another one realizes that you cannot spend indefinitely more than you take in…

Mayor Michael Bloomberg says his budget plan for the coming fiscal year has closed a $2 billion budget gap. But he says the city is facing deficits in following years.

Ontario faces decade of deficits - Time to implement Obama-care in Canada. According to our White House, Obama-care will reduce the cost of healthcare …

And the Ottawa-based economic think-tank says the province will need to rein in health-care cost increases if it wants to balance the books by 2022.