What should government do?

Forcing fast-food restaurants to disclose calories seems like a safe ‘no’ by my way of thinking, but it’s not the clear cut answer I thought before I read the following from the Becker-Posner blog – this is Posner:

A law aimed at reducing obesity would be paternalistic if obesity did not produce external costs, but it does, because obese people consume a disproportionate amount of medical resources, and there is extensive public and private subsidization of medical expenses (private through insurance pools that are unable or forbidden to identify and reject high-risk insureds). However, the size of the externality is in question, because obese people die on average at a younger age than thin people, and so consume medical resources for fewer years on average than thin people do.

Here is Becker’s reply:

But the alleged “externality” with regard to obesity is due only to the government’s subsidy of medical expenditures, so that it is a case of one government intervention – justified or not – causing another intervention – control of eating. It is not a path of intervention causation that most people would be comfortable with in many situations. For example, since the government subsidizes the medical care of children of poorer parents, a mechanical application of this type of externality argument would say that this justifies governmental control over the number of children that poor parents can have. Additional children of these families create an “externality” by raising taxes on others to pay for the medical costs of these children. Many similar examples can be given where government regulations and other government programs cause certain types of behavior that raise taxes or subsidies and adversely affect taxpayers, even though there would be no externality from this behavior in the absence of the government programs.

I know what you’re thinking, ‘this stuff is awesome,’ I agree. See Posner’s entire post. See Becker’s entire post.

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About Jorge Costales

- Cuban Exile [veni] - Raised in Miami [vidi] - American Citizen [vici]
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