UPDATE: The Sugar-Coated Economy

The Sugar Economy

Poor health keeps killing economic growth, but if too many people suddenly get healthy it could burst the big Wall Street bubble.

“No country can be strong whose people are sick and poor.”
— Theodore Roosevelt

Junk food — it’s killing people the world over, and it’s killing economies, too. First it was health experts and scientists; now bankers and economists are raising the red flag.

Sugar is the new tobacco. The world is just beginning to understand its health implications, and the complicity of big industry in its promotion. However, despite sugar’s strong connection with a weak global economy, governments and the junk-food industry continue to encourage its consumption

Health is a key driver of economic growth — as stated by the Morgan Stanley Research report on Sustainable Economics. The Wall Street giant’s forecast, titled The Bitter Aftertaste of Sugar, examines the real challenges sugar consumption poses to policy makers, healthcare experts and corporations, as well as investors trying to weigh the long-term impact on economic growth and industries. Their forecast: higher healthcare costs, lower productivity, and economic disaster — unless something changes.

It’s a competition pitting scientists, health practitioners, bankers, and economists against governments and Big Sugar’s tricks and treats. At this point Big Sugar is winning. Influenced by lobbyists, governments encourage the consumption of sugar by subsidizing junk food. Big Sugar has quietly mirrored Big Tobacco, getting billions hooked on their products. Everyone else is looking at the writing on the wall.

Sugar has become a global staple for billions of people. Consumption has doubled in the last 50 years. Developed nations lead the sugar-induced overfat pandemic, with upwards of 90 percent or more of these adult populations now having excess body fat that feeds chronic illness. But developing nations are quickly catching up, with 40 percent of the world’s diabetes occurring in China and India.

Studies estimate the cost burden of metabolic syndrome is a whopping 75 percent of the total annual $3.2+ trillion (and rising) U.S. healthcare budget. At 15 percent of the U.S. Gross Domestic Product, the highest of all developed nations and still climbing, these costs remain a significant drag on the economy.

But metabolic syndrome is only a relatively small component of sugar-induced illness. To say the U.S. spends three-quarters of its healthcare budget on preventable chronic illnesses is conservative. Led by developing nations, healthcare costs are quickly catching up — the Kaiser Family Foundation estimates a worldwide cumulative loss of $47 trillion between 2011 and 2030.

Credit Suisse, another large multinational financial services company, published its own research report in 2013. This report, “Is Sugar Turning the Economy Sour?” provided a similar forecast. They found that close to 90 percent of general practitioners surveyed in the U.S., Europe and Asia believe excess sugar consumption is linked to the sharp growth in diabetes and obesity, saying that “we cannot ignore the significance and the implications for society and our economy any longer.”

The sugar consumption problem, and all its downstream effects, afflicts men, women, and children (even in utero).  While these effects are overwhelming, the remedy is simple: kick the sugar addiction.

A study by Lustig et al. (2016) demonstrated that reducing dietary sugar can quickly reverse cardiovascular and metabolic disease. Children with metabolic syndrome who reduced consumption of added sugars without reducing calories  reversed a cluster of chronic conditions — high cholesterol, hypertension, and nonalcoholic liver disease — in only nine days! Another recent study by Vreman, et al. simulated significant health and economic benefits by reducing consumption of added sugars in U.S. adults.

This revolution could literally save the world almost overnight—but it would burst a Wall Street bubble that depends on chronic illness and poor quality of life.

Meanwhile, we have created an entire economy based upon ill health and costly aging, with most Americans surviving more than a decade of infirmity before death while running up untold billions, maybe even trillions, of dollars in care. Consider the rising stock prices of healthcare companies, and the overall long-term performance and stability of this sector. But this robust market sector reflects an unhealthy society.

What if large numbers of individuals improved their health in a short period of time? What if Americans reduced healthcare costs by 50 percent within 12 months? The result would be greatly diminished healthcare needs, and reduced reliance on drugs. Related healthcare stocks would fall, even crash, as pharmaceutical companies, and other healthcare-related stocks, along with junk food companies and those associated with Big Sugar, could burst.

However, this bursting bubble could eventually lead to a great recovery. While recovering from poor health, people would still buy food, just make better choices. Leaner people would have to buy new clothes — often whole new wardrobes. While fast-food chains would lose millions of customers, healthy fresh fruits, vegetables, meats and eggs, would divert untold dollars to family farms and farm stands, and supermarkets that would now stock these items.

Morgan Stanley Research estimated the effect of sugar on diseases and its influence on economic growth. Their high sugar intake simulation showed that by 2035, in 18 years, annual economic/GDP growth could decline from about 2.8 percent (2015) to below 0.3 percent.

But they also find that by reducing sugar by just 100 calories per day per person, the simulation showed growth would be about 2.2 percent in 2035 (about the time when costs for coronary heart disease would be double that of today).

How quickly can there be significant change in the health of an individual, or that of a population?

Throughout my career I have witnessed how patients can follow a two-week food challenge, where sugar and refined carbohydrates are eliminated, with rapid changes to health. It’s not unusual to see big changes in blood sugar, triglycerides, blood pressure and other measurable changes within this two-week period, followed by reductions in body fat, reductions or elimination of medications, reduced needs for medical care, and other changes not unlike the Lustig et al. study noted above.

Over the past 50 years, a massive amount of time and money has been spent calculating and estimating how we can accomplish better health and reduced healthcare costs — a period with the coinciding birth of the overfat pandemic that spearheaded chronic disease, physical impairment and an accompanying proportional rise in healthcare costs. Now the discussions include the significant impairment of global economic growth.

Cutting health care costs and overfat rates is easy on paper, with politicians, and various governmental and world organizations making these plans and projections all the time. However, these steps are never implemented because, in great part, the ideas are more political rhetoric than reality. It’s time for individuals to take charge.


  • Eryn says:

    Great article! How do we get all the chronically ill and sick population to read this? Ever thought about posting in other areas like Medium? Some good graphics could make more of an impact some of the population who are more visually impacted.

  • Lorenzo says:

    Dear Dr. Phil, I have been following your posts and advices both in nutrition and exercise for a long time. I am Spanish but was living in California for a couple of years many years ago. I understand your “American” point of view on this problem and I believe you are absolutely right in your defense of non-sugar based nutrition. However, there is something that puzzles me a lot, I have seen that you recommend to avoid also cereals as part of that non-carb based nutrition, but if you have visited Spain you would have notice that we eat bread with almost anything and this not used to be a “fat” country, not to talk about Italy where eat pasta as often as more than once a day and sometimes more than one “pasta” dish during the same meal. You would not see many overfat people over there, at least as fat as those you find often in USA. Do you have an explanation for this apparent paradox?
    I insist that I agree with you especially in the refined sugars, we do not need them, and in the “hidden” sugars added to processed food. However, bred and pasta seem to be different at least by looking at the results for people consuming them.
    Thank you

    • Lorenzo:

      Yes. People who have an already damaged metabolism from eating high levels of added sugar (who are also probably more sedentary) cannot handle the same amount of carbohydrates as someone with a healthier metabolism.

  • Samuel says:

    Since 1977 the USDA food guidelines for macro nutrients had the carb/prot/fat split of 65/20/15. That carbohydrate is a nonessential macro-nutrient for a human being is a physiological fact. Having this so-called “balanced” diet, touted by every dietitian in the country, and the world for that matter, shaped the food supply in both rich and poor countries. The truth is that the advertised “balanced” diet was unbalanced to the point of being perverse. The fact that the majority of the world is getting sick should come as no surprise. If most of your diet is based on a non-essential macro nutrient, why should you expect to be healthy?

  • I did a guest post on my brother’s blog where I extrapolated numbers from a 2016 JAMA paper “US Spending on Personal Health Care and Public Health, 1996-2013.”

    Adjusting for inflation and looking at medical spending that is driven by sugar/carbs (diabetes, heart disease, blood pressure, etc), it’s easy to make an argument that over $700 billion of our $2.9 trillion in 2016 “health care” spending was driven by our sugar-coated lifestyle.


  • Roy Myers says:

    An interesting aside is that both tobacco and sugar have their economic roots in the use of the African slave trade. Sugar as part of the so called triangular trade controlled by Britain and tobacco as intrinsic to the American East coast . It is a terrible heritage that Western nations should now be reaping from such oppressive exploitation of African peoples to become victims to the health consequences which tobacco and sugar bequeath.All in the cause of turning a buck and making a profit.

  • Dr. Phil says:

    Just found an interesting stat: worldwide, chronic diseases will cause $17.3 trillion of cumulative economic loss between 2011 and 2030 from healthcare expenditures, reduced productivity and lost capital.
    (Bloom DE, Cafiero ET, Jané-Llopis E, Abrahams-Gessel S, Bloom LR, Fathima S, Feigl AB, Gaziano T, Mowafi M, Pandya A, Prettner K, Rosenberg L, Seligman B, Stein AZ, Weinstein C. The Global Economic Burden of Noncommunicable Diseases. Geneva, Switzerland: World Economic Forum; 2011.)

  • James Elton says:

    I have worked in for-profit healthcare for over 10 years as CEO or Administrator. I have seen thousands of nursing home patients and Long Term Acute Care patients enjoy the fruits of years of self neglect and lifestyle choices that have brought them scores of comorbidities, chronic illnesses and often times a sad death. Each of the companies I worked for goals should be that they would eventually not be needed, and to work toward the disintegration of Chronic Illnesses d/t lifestyle choices but they do not. We worked on tight margins to provide our companies with great returns etc. We were rarely able to provide good options or programs to staff to help them do better or educate them. Looking back I wish I had done more to push to engage my employees and patients in that way. I know I will work towards that end going forward, but it is true that the love of money seems to be at the root of most of the problems in this area.

  • Andrew Davis says:

    A truly troubling reality with such a simple solution. This site, and your methods have been a gamechanger for me, and I hope that our nation at large (and world) will begin to experience the myriad benefits of eating and living well.

  • Alan says:

    Junk food tastes good, very good. That is why it sells so well. Brocolli, kale, spinach, etc… really don’t taste good. Even if the best marketing and advertising firms were to attempt to sell them to the public it would not work.

    There are plenty of young people that have started smoking even though they have grown up when during a time when advertising cigarettes has been banned.

    You have very convincing arguments and I follow your advise on diet and exercise. You have recipes and exercises to improve health. I would rather see you start a company(s) based on them and get into the market place and compete than to wait for the medical, food, government industries to change. I do consider government to be an industry, the biggest one of all.


  • MEG says:




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