10
Oct
10

Soda Welfare

A friend sent me this piece about New York City’s recent attempt to prevent food stamps from being used to buy sweetened drinks like soda on the idea that the public is simply financing health problems for the destitute. The article comes in response to a recent op-ed written by the health commissioners of both New York State and City respectively (see here for a considered economic analysis of fat tax type measures by Richard Posner).

What I find interesting about the policy to prevent food stamps from being used for sugary drinks is that it’s hard to see how the policy is either a) not justified or b) justified on grounds that would warrant its extension to more parts of the populace.

Consider the question of why NYC thinks this policy is worthwhile. Is it better for the actual people receiving food stamps and now use them to buy sugary drinks? Well, the people presumably take some pleasure in these drinks and are currently consume these drinks despite their deleterious affects on health. If we assume the poor are rational consumers, then we are effectively lower their overall welfare (according to a subjective view of welfare). But maybe the poor, like the rest of us, do not make decisions about our health rationally or perhaps we purchase with imperfect information about how damaging these drinks really are, in which case the justification for the policy is the health of the people buying these drinks. But if health is the goal of the policy, to be achieved by taxing a harmful activity, then taxes should be put in place so that the regular populace can also benefit from these measures (and be disincentivized to drink these harmful drinks). I hope the implication is not that only the poor are behaving irrationally with regard to sugar drink consumption.

Another point is that the government should not be spending money to help people continue to do something harmful, but this raises an interesting question of why we give people money at all. Do we give food stamps because we want poor people to have more PLEASUREFUL lives, because if that’s the reason, then we’re contradicting that goal by denying them the sweet release of a sugary soda (again, on the view that pleasure is determined by willingness to pay). Or do we give food stamps to poor people because we want them to live HEALTHIER lives, in which case the sugary drink restriction policy would be justified.

There is also a repeated mention of the money that obesity costs the public. Sugary drinks = obesity = various diseases like diabetes and heart disease = taxpayer dollars. Here too though, if tax dollars are lost to obesity, then we should be using a tax to recoup those lost dollars in ALL segments of society.

Anyway, I’m kind of vaguely dancing around the main question here, which is: why do we give poor people money so that they can eat and how does that goal interact with this soda policy? Are we trying to make the poor as well off as possible, or only ensure they have a certain minimum amount of welfare, or make sure that they can DO certain things, or make sure they are to a certain degree HEALTHY. All of these notions are separate.

These are tough questions, but my answer is this: I think we give money to the poor so that they can participate in society on equal footing with other people, and this means the money must go primarily not toward making poor happier (as if we could just buy a lot of cocaine for them, or some more sophisticated sedative) but toward making them be able to healthily participate in society (and not be obese and not sick), to be able to learn skills (education), impact our government (vote and have their voices heard).

Toward this goal, I think the policy of NYC is justified. The goal of the policy is to make public dollars maximally translate into able-bodied and capable citizens, and that’s why food stamps already don’t go to alcohol. The rest of public money should go to helping poor people purchase the things they need to be active members of society, so housing, healthcare, education, and food are obviously justified. Still, there will be some who are so ineffective at making use of these opportunities and so fall into miserable lives, and the government should not let these people languish in their suffering, but programs designed to address these people will not be based at ability to participate in society but in overall welfare or happiness.

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