“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
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“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
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…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
“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
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers

For whatever topics you select (currently: Government Spending):

Include articles that mention this topic 388

Only articles primarily about this topic 193

How Sweden Overcame Socialism

Jesús Fernández-Villaverde Wall Street Journal

Date Posted:: January 10, 2019
Is Database:: Database

Sweden’s market reforms: Govt spend cut 70% to <50% GDP, debt 80% to 41%, corp tax -6pts to 22%. Results: Growth +1pt vs EU since 1995, GDP/capita now at 85% of US. Ranks 15th in economic freedom.

Sweden's economic transformation from socialism to a market-based system highlights the impact of strategic reforms. By the early 1990s, Sweden's government spending had surged to 70% of GDP, and public debt reached 80% of GDP, leading to economic stagnation. In response, a market-oriented government implemented reforms, including privatizing parts of the healthcare system, introducing for-profit schools, and reducing welfare benefits. These changes, along with deregulation in industries like electricity and transportation, and a reduction in corporate tax rates from 28% in 2009 to 22%, have revitalized the economy. Public debt has since declined to 41% of GDP. As a result, since 1995, Sweden's economic growth has outpaced its EU peers by about 1 point annually, positioning it as the 15th freest economy globally. Sweden's per capita GDP is now within 15% of the U.S., demonstrating the effectiveness of these market-based reforms in enhancing economic prosperity.

Takeaways by Macro Roundup^® AI

Sweden's government spending reached 70% of GDP and public debt 80% of GDP by the early 1990s, a period of economic stagnation that prompted a market-oriented government to enact reforms.
Sweden's reforms included privatizing parts of healthcare, introducing for-profit schools, cutting welfare benefits, deregulating electricity and transportation, and lowering the corporate tax rate from 28% in 2009 to 22%.
Since 1995, Sweden's economic growth has outpaced its EU peers by about 1 point annually, its public debt has fallen to 41% of GDP, and its per capita GDP is within 15% of the U.S.

Jesús Fernández-Villaverde and Lee E. Ohanian, "How Sweden Overcame Socialism,"Wall Street Journal, January 9, 2019, https://www.wsj.com/articles/how-sweden-overcame-socialism-11547078767

How Sweden Overcame Socialism

Nearly half of millennials say they prefer socialism to capitalism, but what do they mean? “My policies most closely resemble what we see in the U.K., in Norway, in Finland, in Sweden,” Rep. Alexandria Ocasio-Cortez told “60 Minutes.” Yet Sweden’s experiment with socialist policies was disastrous, and its economic success in recent decades is a result of market-based reforms.

Until the mid-20th century, Sweden pursued highly competitive market-based policies. By 1970 Sweden achieved the world’s fourth-highest per capita income. Then increasingly radical Social Democratic governments raised taxes, spending and regulation much more than any other Western European country. Economic performance sputtered. By the early 1990s, Sweden’s per capita income ranking had dropped to 14th. Economic growth from 1970 to the early 1990s was roughly 1 percentage point lower than in Europe and 2 points lower than in the U.S.

Before its socialist experiment, Sweden had a smaller government sector than the U.S. By the early 1990s, government spending and transfer payments ballooned to 70% of gross domestic product, and debt had increased to 80% of GDP. Between 1966 and 1974, Sweden lost some 400,000 private jobs—proportionate to 16.7 million in today’s U.S.

In 1991 a market-oriented government came to power and undertook far-reaching reforms. Policy makers have privatized parts of the health-care system, introduced for-profit schools along with school vouchers, and reduced welfare benefits. Since 1997, government ministries that propose new spending plans have been required to find offsetting cuts in their budgets. As a result, public debt has declined from 80% of GDP in the early 1990s to 41%.

To increase incentives to work, Sweden reduced unemployment benefits and introduced an earned-income tax credit in 2007. The electricity and transportation industries were deregulated in the 1990s, and even the Swedish postal system was opened up to competition in 1993. The corporate tax rate was cut from its 2009 level of 28% to 22% today, and is scheduled to decline to 20.4% in 2021.

This policy mix has earned Sweden a Heritage Foundation ranking as the 15th freest economy in the world. The U.S. is 18th. And it’s paid off. Since 1995, Swedish economic growth has exceeded that of its European Union peers by about 1 point a year. Sweden is now richer than all of the major EU countries and is within 15% of U.S. per capita GDP. While Sweden still has a larger government than the U.S., its tax code is flatter. The progressivity of the U.S. tax code distorts incentives. These distortions would become even larger under the tax-increase proposals of democratic socialists like Ms. Ocasio-Cortez.

There is an example for the U.S. here, but the lesson isn’t what Ms. Ocasio-Cortez thinks. Command-and-control economic policies undermined Sweden’s prosperity, and they would do the same to America’s.

Mr. Fernández-Villaverde is a professor of economics at the University of Pennsylvania. Mr. Ohanian is a senior fellow at the Hoover Institution and professor of economics at UCLA.

I've read a bunch of stuff on this, Richard Freeman (Harvard Labor Economist) did an NBER chapter that does a good job capturing the Swedish experience with structural reforms, I don't think the WSJ piece mischaracterizes their liberalizations. FYI Fernández-Villaverde is the Penn professor you've traded emails with "Just your opinion man"

Ed Comment:I frequently read articles like this and are concerned that they contain propaganda and therefore are unusable. please synthesis serious views on this for me.

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

Keeping Social Security permanently solvent under the "fairness" model of paying accrued benefits in full would require an immediate and permanent payroll tax increase from 12.4% to 17.6%, which would decrease labor supply and reduce economic growth.
Americans had accrued $54 trillion in Social Security benefits as of 2025 against an unfunded obligation of $26 trillion, so closing the gap solely by cutting already-earned benefits would mean roughly halving those benefits.
Economists analyzing the 1977 reform that undid the 1972 "double-indexing" of benefits found, using SSA earnings data, that affected Americans raised their earnings by 61 cents per dollar of lost benefits, earnings that Social Security would tax.

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 total public social spending, covering healthcare, education and welfare payments, has fallen to 24% of GDP, similar to the U.S. and well below the over 30% of nations like France and Italy.
Nearly half of Sweden's primary healthcare clinics are privately owned, many by private-equity firms, and one in three public high schools is privately run, up from 20% in 2011, with school operators listed on the stock exchange.
An April forecast by the International Monetary Fund projects Sweden's economy will grow around 2% a year through 2030, roughly matching the U.S. and double the growth rates of France and Germany.

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

The share of the U.S. population receiving SNAP doubled from 6% in FY2000 to 12% in FY2025, while real SNAP costs per capita rose 179%, from roughly $100 to $279 per year in 2024 dollars.
In FY2023, the share of SNAP households containing an elderly person reached 36%, exceeding the 34% containing a child for the first time, against the early 2000s when over half contained a child and under 20% included an elderly person.

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

Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit traditionally focused on grants, loans, and tax incentives.
The Department of Defense leads with seven direct-ownership deals, followed by the Department of Commerce with six, including a 10% stake in Intel, while the Development Finance Corporation has executed three equity transactions in critical minerals, healthcare, and infrastructure.
The U.S. government has mobilized an additional $4.75 billion in investment alongside private co-investors including J.P. Morgan and Goldman Sachs.

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

Retirees aged 65 and older receive $2.7 trillion of federal spending in fiscal 2025, equal to 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2 trillion for working-age adults aged 26–64.
Children and young adults under age 26 receive $449 billion, or 10.3% of age-assignable federal spending, out of $4.4 trillion classified by age within a $7 trillion budget, with $2.6 trillion assigned to an all-ages residual.
Social Security directs $1.3 trillion and Medicare $835 billion to retirees, together 80% of age-assignable spending on older adults, with federal employee retirement benefits ($169 billion), housing assistance, Medicaid long-term care, and VA medical care contributing further.

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.

Takeaways by Macro Roundup^® AI

Technology-associated changes in health and site of care account for 21% of the overall U.S. health care cost slowdown and double that share in Medicare, according to the authors' estimates.
The authors estimate that slower price growth, net of upcoding, explains 24% of the health care spending slowdown, while market changes reducing demand — higher consumer cost sharing, lower physician payment for technology use, and insurer restrictions — account for a rough 11–27%.
Improved population health explains an estimated 7% of the spending slowdown, through fewer smoking-related hospitalizations, reduced need for formal home health care, and a lower birth rate, while greater long-run supply elasticity explains 6%.

Sweden’s market reforms: Govt spend cut 70% to <50% GDP, debt 80% to 41%, corp tax -6pts to 22%. Results: Growth +1pt vs EU since 1995, GDP/capita now at 85% of US. Ranks 15th in economic freedom.

Did market-oriented reforms lower public debt and raise growth?

Takeaways by Macro Roundup® AI

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 closing Social Security's gap with higher payroll taxes hurt growth?

Takeaways by Macro Roundup® AI

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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 has Sweden shrunk its state by privatizing public services?

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 have food stamp enrollment, costs, and recipient households changed?

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.

Is the U.S. government taking direct equity stakes in companies?

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.

How is federal spending distributed across age groups?

Takeaways by Macro Roundup® AI

Related Articles:

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.

What explains the slowdown in US health care spending?

Takeaways by Macro Roundup® AI

Related Articles:

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Takeaways by Macro Roundup^® AI

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