The Big Government Spending Maga Voters Cannot Live Without
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The Fairest Way to Reform Social Security May Also Be the Worst Way to Grow the Economy
AI Summary. Raising payroll taxes to fix Social Security's funding gap preserves earned benefits but reduces take-home pay without added compensation, shrinking labor supply and slowing economic growth.
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Biggs argues that “fair” approaches to restoring Social Security solvency – those that do not cut already accrued benefits – are less effective than “unfair” ones that do, because the latter incentivize increased work effort, raising growth and revenue.
Does preserving Social Security benefits require sacrificing economic growth?
Core argument: A 5.2 pts payroll tax increase to 17.6% drives reduced labor supply and slower economic growth vs. the status quo.
Imagine that Social Security reform follows the fairness model, in which accrued benefits are paid in full but the rate at which future benefits are earned is reduced. A simple way to do this is to increase the payroll tax rate To keep Social Security permanently solvent, meaning through 75 years and beyond, would require an immediate and permanent increase in the payroll tax rate [from] 12.4% to 17.6%. The higher rate would decrease labor supply and reduce economic growth. [Consider] an alternate reform, which looks clearly unfair: fix Social Security’s funding gap entirely by reducing accrued benefits that Americans already have earned. As of 2025, Americans had accrued $54 trillion in Social Security benefits. Social Security’s unfunded obligation as of 2025 was $26 trillion. So, roughly, this means cutting Americans’ “earned benefits” in half. [Analyzing the 1977 reform that undid the notorious 1972 “double-indexing” of benefits, a group of economists], using SSA earnings data, found that, for every dollar of lost benefits, the affected Americans increased their earnings by 61 cents. Moreover, these additional earnings would be taxed by Social Security, further strengthening the program’s finances. In effect, this makes cutting benefits a “cheaper” way to fix Social Security than raising taxes, because people respond in ways that also increase tax revenues.Takeaways by Macro Roundup® AI
- A 5.2 pts payroll tax increase to 17.6% drives reduced labor supply and slower economic growth vs. the status quo.
- $54 trillion in accrued Social Security benefits vs. the unfunded obligation reveals that benefit cuts would reduce growth drag but.
The World’s Most Surprising Capitalist Makeover Is Under Way in Sweden
AI Summary. Sweden has privatized nearly half of primary healthcare and one in three public high schools, shrinking public social spending to 24% of GDP — comparable to the U.S. and well below France and Italy — while projecting ~2% annual growth through 2030, double the rate of France and Germany.
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Swedish public social spending is now 23.7% of GDP, just 1pp above that of the US and well under France’s 31.6%. Market-based reforms in the 1990s brought overall government spending down from 69.4% to 49.3% in 2024.
How is Sweden's shift to privatization impacting its economic growth?
Core argument: Sweden’s public social spending fell to 24% of GDP, matching the U.S. and 6+ pts below France/Italy, driving lower taxes.
For decades, Sweden was shorthand for the brand of high-tax, high-spend government that managed people’s lives from cradle to grave through state-run hospitals, schools and care homes. No longer. With little fanfare, this Nordic country of 11 million has embraced capitalism. Today, nearly half of primary healthcare clinics are privately owned, many by private-equity firms. One in three public high schools is privately run, up from 20% in 2011. School operators are listed on the stock exchange. The capitalist makeover has allowed Sweden to do what few industrialized countries have managed in recent years: shrink the size of the state. That has enabled the government to sharply lower taxes and, economists say, sparked a surge in entrepreneurship and economic growth. Its total public social spending bill—which includes healthcare, education and all welfare payments—has fallen to 24% of gross domestic product, similar to the U.S. and well below the over 30% for nations like France and Italy. Sweden’s economy is expected to grow by around 2% a year through 2030, roughly the same pace as the U.S. and double the growth rates of France and Germany, according to an April forecast by the International Monetary Fund.Takeaways by Macro Roundup® AI
- Sweden’s public social spending fell to 24% of GDP, matching the U.S. and 6+ pts below France/Italy, driving lower taxes.
- Privately-run primary healthcare clinics reached nearly 50% of the market vs. 20% for high schools in 2011, demonstrating accelerating privatization.
- Sweden’s projected 2% annual GDP growth through 2030 doubles France and Germany’s rates, resulting from state downsizing and capitalist sector.
How Policy and Demographics Are Reshaping SNAP: From Families with Children to Older Adults
AI Summary. SNAP enrollment has doubled from 6% to 12% of the U.S. population since 2000, with real costs per capita rising 179% to $279 annually, driven by policy expansions and benefit increases that prevent costs from fully retreating after economic downturns.
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About 40mm Americans, 12% of the population, receive SNAP benefits, up from 6% in 2000. In 2023, only 34% of these households included children, down from 49% in 2010, while 36% contained an elderly person, up from 16% in FY2010.
How Are Policy Changes and Demographic Shifts Impacting SNAP Enrollment?
Core argument: SNAP participation doubled from 6% to 12% of the population between FY2000–FY2025, driven by policy expansions and demographic shifts outpacing.
Comparing FY2000 with FY2025, the share of the population receiving SNAP doubled from 6% to 12%, while real SNAP costs per capita increased by 179%—from roughly $100 per year to $279 (in 2024 dollars). Despite this growth, per capita participation and costs in FY2025 remained below their pre-pandemic peak in 2013, which coincided with the aftermath of the Great Recession and changes in eligibility and other policies stemming from the 2008 Farm Bill. SNAP is countercyclical, meaning that all else equal, the number of people receiving SNAP should rise during recessions because of increased unemployment and decline as the economy recovers, [though] overall SNAP participation has grown faster than changes in the unemployment rate alone would predict. Over the long run, and especially since FY2020 (due to the Thrifty Food Plan’s increase in the maximum SNAP benefit), costs per capita have not returned to prerecession levels after a period of high unemployment. In FY2023, the share of SNAP households containing an elderly person (36%) exceeded the share containing a child (34%) for the first time. This was a sharp departure from the early 2000s, when more than half of SNAP households contained a child and less than 20% included an elderly person (Figure 2).Takeaways by Macro Roundup® AI
- SNAP participation doubled from 6% to 12% of the population between FY2000–FY2025, driven by policy expansions and demographic shifts outpacing.
- Real per capita SNAP costs rose 179% from $100 to $279 (2024 dollars) over 25 years, with the Thrifty Food.
- FY2025 SNAP enrollment remains 8–12% below the FY2013 peak despite 25-year growth, indicating countercyclical policy design successfully targets recession-driven need.
Washington’s Growing Portfolio: Tracking U.S. Government Investments
AI Summary. The U.S. government has deployed $20.9bn across 16 direct equity deals, expanding beyond grants, loans, and tax incentives into direct ownership stakes. This approach has mobilized an additional $4.75bn in private co-investment alongside the government's positions.
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Since January 2025, the USG has taken equity stakes totaling $20.9B in 16 American businesses. $8.6B, ~41% of the total, was invested in critical mineral miners and processors, while $8.9B, ~43% of the total, funded the government’s 10% stake in Intel.
Core argument: The U.S. government deployed $20.9bn in direct equity investments since January 2025, expanding beyond traditional grants and loans to drive.
Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit that has traditionally focused on grants, loans, and tax incentives. The Department of Commerce has participated in six such deals, including taking a 10% stake in Intel. The Development Finance Corporation, the United States’ development bank, has executed three equity transactions in critical minerals, healthcare, and infrastructure. The Department of Defense leads the way with seven such deals. The U.S. government is also working with a range of partners and has mobilized an additional $4.75 billion in investment. Private co-investors include J.P. Morgan, Goldman Sachs, and others.Takeaways by Macro Roundup® AI
- The U.S. government deployed $20.9bn in direct equity investments since January 2025, expanding beyond traditional grants and loans to drive.
- The Department of Defense leads with seven equity deals of the sixteen total, establishing direct ownership as a core national.
- Commerce Department’s 10% Intel stake exemplifies government equity participation in critical infrastructure, mobilizing private capital alongside public investment to strengthen.
How Federal Spending is Distributed by Age
AI Summary. Retirees receive 62 cents of every age-assignable federal dollar, driven primarily by Social Security and Medicare, which together account for 80% of all federal spending directed at adults over 65.
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In 2025, of the 62.5% of Federal spending that is age-assignable on a per-capita basis, US retirees aged 65+ were given $43,700, working-age adults 26–64 got $7,300, and children and young adults got $4,300.
Core argument: Federal spending heavily favors retirees, who receive 38.6 percent of total outlays through Social Security, Medicare, and related programs.
We trace spending items within 52 general spending categories, totalling $7T for the 2025 Fiscal Year. We are able to classify a total of $4.4T across three broad age categories and assign the remaining $2.6T to an all-ages residual. Retirees (adults age 65 and older) receive $2.7T, equal to 38.6% of total federal outlays and 61.9% of age-assignable spending. Working-age adults (ages 26-64) receive $1.2T (27.9% of age-assignable), and children and young adults (under age 26) receive $449B (10.3%). The dominance of the retiree category reflects two programs above all others: Social Security and Medicare. Social Security directs $1.3T to retirees, and Medicare sends $835B. Together, they account for 80% of all age-assignable spending on older adults. But the retiree total extends beyond these two entitlements. Federal employee retirement benefits ($169B), housing assistance for older households, Medicaid long-term-care spending, and VA medical care all contribute, making the federal budget more retiree-focused than a Social Security–only lens would suggest.Takeaways by Macro Roundup® AI
- Federal spending heavily favors retirees, who receive 38.6 percent of total outlays through Social Security, Medicare, and related programs.
- Working-age adults and children combined receive less than half the spending directed to retirees despite representing larger population segments.
- Social Security and Medicare alone account for 80 percent of all federal spending on older Americans, dominating the retiree budget.
Has the United States Bent the Health Care Cost Curve?
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