Why doesn't the government lower the price for healthy food and raise the price for unhealthy food? Wouldn't they save billions in healthcare costs?

Question

For some foods it's a little bit ambiguous if they're healthy or not. But common everyone knows that carrots and spinach are healthy and candy and chips are not. Obesity, vitamin deficiency and a dozen of other diseases could be prevented/cured if the government lowered the price on healthy foods and raise the prices on unhealthy food. It's just the law of demand: people are gonna buy more of what's cheaper and less of what's expensive. Any thoughts on this question?

Answer 1

Hey, I'm no expert on this topic, but here are a few personal observations. First, in a free market economy, the government does not set prices, the market does. So the government has no power to directly regulate prices of food commodities, even junk food. That said, they can tax junk food, and so increase its cost to consumers. For example, the government taxes cigarettes. The government can also ban some products on health grounds like e-cigarettes or trans-fats; but doing so is difficult, as some people and politicians would oppose it.

Secondly, most people in the US are on private healthcare (unfortunately) so any savings would be realized by insurance companies, not the government. Insurance companies don't care because they can just keep raising their prices, which is why we here in the US pay twice as much per person for healthcare than the next most expensive nation. The exception is people on medicare or medicaid which are government-run programs.

Third, it is difficult to regulate healthy behavior in a free society: people are free to eat poorly if they choose. And business is more than happy to make a buck off of us by supplying junk food. People and affected businesses will always oppose attempts to regulate junk food, and hence many politicians will oppose it as well.