“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
“…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
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Why London deserves a thank you note from the rest of Britain

Chris Giles Financial Times

Date Posted:: June 8, 2017
Is Database:: Database

Londoners paid £3,070 more in tax than they received in public spending, contributing to a 7% of GDP budget surplus.

In 2015-16, average Londoners paid £3,070 more in tax than they received in public spending, contributing significantly to the national budget. This fiscal contribution results in London running a budget surplus of 7% of GDP, outperforming even Norway. In contrast, regions like Northern Ireland received an average of £5,527 more in public spending than they contributed. Without London's financial input, regions such as Scotland and Wales would face budget deficits exceeding 10% of their GDP, potentially requiring intervention from the International Monetary Fund. Despite facing higher living costs and stagnant median household incomes since 2008, London remains a crucial economic engine for the UK, enabling the redistribution of resources to less affluent areas. The capital's fiscal health underscores its role as a vital contributor to national prosperity, warranting appreciation from the rest of Britain.

UK government did the exercise we were talking about!

"...Official estimates, published for the first time last month by government statisticians based in Newport, Wales, bear this out. In 2015-16, average Londoners paid £3,070 more in tax than they received in public spending. Smaller net contributions to the national purse were made in the south-east and East Anglia. In contrast, net recipients of public spending ranged from an average of £1,296 for people in the south-west to £5,527 for those in Northern Ireland. If London was a nation state, it would have a budget surplus of 7 per cent of gross domestic product, better than Norway...."

Just as Donald Trump’s America will not prosper by blaming other countries for its own problems and Britain’s woes are not the EU’s fault, the rest of the UK should stop accusing London of stealing its future. Politicians are there to lead. If they think regional prosperity will come from London’s pain, they are leading Britain to la-la land.

Growth cannot be pushed around the country like chips on a roulette table. Numerous attempts to relocate private industries have failed. Moving statisticians to Newport damaged the quality of information without helping much locally. Cities should instead seek to address barriers that prevent local businesses’ success. Manchester’s dynamism shows it is slow work but possible.

For the Tories to bemoan London’s relative success highlights a frivolity in government economic policy. There is every need to improve the performance of all parts of Britain, but setting policy to reduce the gap between the capital and elsewhere threatens universal misery. As the Centre for Cities notes, the most equal cities where gaps between rich and poor have been ironed out successfully — Burnley, Stoke and Mansfield — are also among Britain’s weakest.

Londoners have suffered the most and yet still provide the money to redistribute resources to poorer places and more vulnerable people. The rest of Britain should write a thank-you note.

The idea that London sucks the life out of other parts of Britain is absurd. Equally ludicrous is the notion that the capital’s population has lived the life of Riley while other places have suffered. After housing costs, Londoners’ median household incomes have performed worse than any other region since 2008.

If London was a nation state, it would have a budget surplus of 7 per cent of gross domestic product, better than Norway. It could finance the £30bn cost of the Crossrail 2 transport project with a little over one year of this excess cash. By contrast, Scotland, the West Midlands, Yorkshire and Humberside, the north-west, the north-east, Wales and Northern Ireland would each have budget deficits greater than 10 per cent of their national incomes. Without London, they would soon feel the warm embrace of an International Monetary Fund programme.

Official estimates, published for the first time last month by government statisticians based in Newport, Wales, bear this out. In 2015-16, average Londoners paid £3,070 more in tax than they received in public spending. Smaller net contributions to the national purse were made in the south-east and East Anglia. In contrast, net recipients of public spending ranged from an average of £1,296 for people in the south-west to £5,527 for those in Northern Ireland.

Politicians’ antipathy towards London is bizarre. It is definitively the cash cow that allows them to promise the high quality public services all parts of the country crave.

Of the main parties, the noisiest complaints come from the Conservatives. Displaying an undisguised hostility to the capital, the Tory manifesto talks of spreading wealth and opportunity across the UK, “not just the most prosperous places in London and the south-east”. It calls for arts funding to be redirected from the capital, for Channel 4 television and for civil servants to be relocated by force. “We will ensure that senior posts move too, so that operational headquarters as well as administrative functions are centred not in London but around Britain,” it promises. Labour is less vindictive, but shares the analysis. It complains the UK has “relied too heavily on the financial sector centred on London and the south-east”.

London is under attack. The perpetrators are aiming at its wealth, the opportunities it offers, its cultural vibrancy and its power. These foes are themselves mighty. They are the majority of Britain’s political class.

If the capital were a country, it would have a budget surplus of 7 per cent of GDP

Why London deserves a thank you note from the rest of Britain

Chris Giles, "Why London deserves a thank you note from the rest of Britain,"Financial Times, June 8, 2017, https://www.ft.com/content/ff0df3b4-4aa8-11e7-919a-1e14ce4af89b

The Fairest Way to Reform Social Security May Also Be the Worst Way to Grow the Economy

Andrew Biggs American Enterprise Institute

Date Posted:: May 28, 2026
Is Database:: Database
Is Important:: Important

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.

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

Tom Fairless Wall Street Journal

Date Posted:: May 12, 2026
Is Database:: Database

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.

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

Angela Rachidi American Enterprise Institute

Date Posted:: May 1, 2026
Is Database:: Database

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.

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

Jonathan Hillman Council On Foreign Relations

Date Posted:: April 23, 2026
Is Database:: Database

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.

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

Kent Smetters University of Pennsylvania

Date Posted:: April 2, 2026
Is Database:: Database
Is Important:: Important

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.

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?

David Cutler and Lev Klarnet Brookings Papers On Economic Activity

Date Posted:: March 30, 2026
Is Database:: Database
Is Important:: Important

In 2024, medical spending as a share of GDP was just above its 2010 level and 15% ($977B) below its 2010 forecast; 21% of the gap was due to technology, 24% to price reductions, and 11–27% to reforms such as prior authorization and higher deductibles.

Five factors are important in the slowdown in spending [Figure 16]. The first is technology-associated changes in health and site of care. These correspond to the subsequent innovations in our model. Together, technologies along these lines account for 21% of the overall cost slowdown and double that in Medicare. Second, long-run supply is more elastic than short-run supply, which lowers spending over time. This is particularly apparent in the impact of patent expiration for pharmaceuticals and in relative declines in imaging reimbursement. We estimate that greater long-run supply explains 6% of the spending slowdown. Third, a variety of market changes contribute to reduced and more elastic demand, including increased cost sharing paid by consumers, physicians not paid as much for using technologies, and insurers imposing restrictions on technology use - a rough guess is that these account for 11 to 27% of the spending slowdown. Fourth, the population is healthier in ways that reduce spending. This includes fewer hospitalizations for smoking-related conditions and reduced need for formal home health care. The birth rate has fallen as well, which reduces the need for care. We estimate improved population health explains 7% of the spending slowdown. A major component is slower price growth. Net of upcoding, we estimate lower price growth explains 24% of the spending slowdown.

Londoners paid £3,070 more in tax than they received in public spending, contributing to a 7% of GDP budget surplus.

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?

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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?

Takeaways by Macro Roundup® AI

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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?

Takeaways by Macro Roundup® AI

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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.

Takeaways by Macro Roundup® AI

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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.

Takeaways by Macro Roundup® AI

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In 2024, medical spending as a share of GDP was just above its 2010 level and 15% ($977B) below its 2010 forecast; 21% of the gap was due to technology, 24% to price reductions, and 11–27% to reforms such as prior authorization and higher deductibles.

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