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Fiscal policy and excess inflation during Covid-19: a cross-country view

François de Soyres Federal Reserve Board

Date Posted:: July 27, 2022
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U.S. Fiscal Stimulus during COVID-19 added ~2.5pp to inflation through Feb 2022 @FSoyres.

The U.S. fiscal stimulus during the COVID-19 pandemic significantly impacted inflation, contributing approximately 2.5 percentage points (pp) to the U.S. inflation rate through February 2022. This increase was driven by a surge in goods consumption, which was not matched by a corresponding rise in production, leading to excess demand pressures and price tensions. The fiscal support boosted consumption during periods of increased mobility, while supply remained relatively inelastic, exacerbating supply chain bottlenecks and inventory depletion. In contrast, the United Kingdom experienced a smaller impact, with U.S. fiscal stimulus contributing about 0.5pp to its inflation. The analysis highlights the role of domestic fiscal policies in large economies like the U.S., where domestic stimulus is a more significant driver of excess inflation compared to foreign stimulus.

In this note, we examine how fiscal support impacted the balance between supply and demand across countries during the COVID-19 crisis. Our findings suggest that fiscal stimulus boosted the consumption of goods without any noticeable impact on production, increasing excess demand pressures in good markets. As a result, fiscal support contributed to price tensions. Indeed, focusing on inflation through February 2022 which does not capture many disruptions associated with the war in Ukraine, we show that countries with large fiscal stimulus, or with high exposure to foreign stimulus through international trade, experienced stronger inflation outbursts. Our back-of-the-envelope illustrative calculations suggest that U.S. fiscal stimulus during the pandemic contributed to an increase in inflation of about 2.5 percentage points (ppt) in the U.S and 0.5ppt in the United Kingdom. Unlike previous recessions, consumption of goods and services behaved very differently (see figure 2). In advanced economies, where the data allow real consumption expenditures across goods and services to be discernible more easily, consumption of services fell dramatically and then started recovering slowly as containment policies eased and vaccines were made widely available. In contrast, goods consumption fell by less during the beginning of the pandemic and experienced a strong recovery thereafter. Industrial production, however, was slow to adjust, creating a discrepancy between supply and demand in the goods' markets that likely played a role in the depletion of inventories and ultimately in recent price tensions Using our point estimates and country-specific values of fiscal support, figure 4 quantifies the role of fiscal support in shaping the response of goods consumption to fluctuations in mobility. The United States is the most impacted country, with consumption decreasing significantly less when mobility drops and rebounding significantly more when mobility increases. Keeping in mind the caveats described above, figure 5.1 presents the impact of domestic and foreign exposure on excess inflation for several regions, based on our regression estimates. The impact of domestic fiscal stimulus on inflation is highest in the United States. Canada, a country with strong trade links with the U.S., features a high level of excess inflation related to exposure to foreign fiscal stimulus. In large economies, not surprisingly, domestic stimulus is a more important driver of excess inflation than foreign stimulus. For example, domestic stimulus is associated with a 2.5 (ppt) in excess inflation in the United States, 1.8ppt in the Euro Area. Conversely, smaller economies are relatively more sensitive to foreign stimulus. In figure 5.2, we derive a measure of "international spillover" of U.S. fiscal stimulus. In particular, we isolate the share of U.S. stimulus in foreign exposure for several countries and compute the associated excess inflation in those countries. Our estimation implies that US fiscal stimulus was associated with an excess inflation of about 0.5 percentage points in the United Kingdom.

François de Soyres, Ana Maria Santacreu and Henry Young, "Fiscal policy and excess inflation during Covid-19: a cross-country view,"Federal Reserve Board, July 15, 2022, https://www.federalreserve.gov/econres/notes/feds-notes/fiscal-policy-and-excess-inflation-during-covid-19-a-cross-country-view-20220715.htm

Fiscal policy and excess inflation during Covid-19: a cross-country view

The recent surge in inflation in many countries around the world and the fiscal stimulus provided in the face of the COVID-19 pandemic has renewed interest in analyzing the potential role of large fiscal spending as a driver of price increases.

1. The Covid Crisis and fiscal policy responses around the world

The COVID-19 pandemic greatly disrupted economic activity all over the world. Due to a mix of government-imposed restrictions and voluntary personal decisions, mobility levels, as measured by Google's geo-location tracking data from smartphones, collapsed in March 2020. Since then, mobility has improved, although with some volatility that tracked closely the successive waves of the pandemic (see figure 1).

Fiscal policy and excess inflation during Covid-19: a cross-country view: Extended Excerpt Image 1

The pandemic affected both the supply and demand side of the economy, hampering firms' ability to produce, as well as consumers' ability to consume. Unlike previous recessions, consumption of goods and services behaved very differently (see figure 2). In advanced economies, where the data allow real consumption expenditures across goods and services to be discernible more easily, consumption of services fell dramatically and then started recovering slowly as containment policies eased and vaccines were made widely available.2 In contrast, goods consumption fell by less during the beginning of the pandemic and experienced a strong recovery thereafter. Industrial production, however, was slow to adjust, creating a discrepancy between supply and demand in the goods' markets that likely played a role in the depletion of inventories and ultimately in recent price tensions.3

Fiscal policy and excess inflation during Covid-19: a cross-country view: Extended Excerpt Image 2

To mitigate the health and economic fallout of the pandemic, many governments engaged in massive fiscal support programs. Using the IMF's data, we define each country's total fiscal stimulus as the percent change in cumulative spending above the country-specific pre-pandemic trend. As shown in figure 3, the extent of fiscal support is large and heterogeneous across countries.

Fiscal policy and excess inflation during Covid-19: a cross-country view: Extended Excerpt Image 3

2. Fiscal Support, Consumption, and Production During Recovery Periods of the Pandemic

While the pandemic and associated public health restrictions were the main drivers of economic fluctuations over the past two years, fiscal stimulus policies might have shaped the response of consumption and production to changes in mobility. Here, we investigate the association between the size of total fiscal stimulus and the path of consumption and Industrial Production during the COVID-19 pandemic, by evaluating: (i) the elasticity of demand and supply to lockdowns, and (ii) the impact of fiscal stimulus on this elasticity.

Empirical Setup.

Our empirical strategy consists of projecting quarterly real consumption and production growth on the growth rate in mobility in the same quarter. We also interact these variables with country-specific 2020 fiscal stimulus. Our objective is to analyze how fiscal support affected the country-level consumption and production in response to mobility fluctuations.4

On the one hand, in periods of mobility decline, we expect fiscal support to help household's "soften the blow" of the activity reduction, and hence expect a smaller decline in consumption in countries with large stimulus. Hence, in these periods, fiscal support is expected to counterbalance the effect of mobility, which means that the interaction term takes an opposite sign compared to the standalone mobility one. On the other hand, in periods of economic reopening and mobility rebound, we expect fiscal support to amplify the consumption increase, which implies that the interaction term takes the same sign as mobility.

Baseline Results.

We find that governments that provided generous fiscal support mitigated the drop in goods consumption in periods of lockdowns, while boosting consumption in periods of increased mobility. The effect of fiscal stimulus on services consumption, however, is insignificant. Finally, our results reveal that generous fiscal spending did not significantly contribute to supply expansion: countries with larger fiscal support did not have a significantly different association between mobility and Industrial Production. In other words, supply did not adjust quickly enough to meet the sharp increase in demand for goods.

Using our point estimates and country-specific values of fiscal support, figure 4 quantifies the role of fiscal support in shaping the response of goods consumption to fluctuations in mobility. The United States is the most impacted country, with consumption decreasing significantly less when mobility drops and rebounding significantly more when mobility increases.

Fiscal policy and excess inflation during Covid-19: a cross-country view: Extended Excerpt Image 4

3. Fiscal Support and Inflation

The previous section highlighted that fiscal support boosted goods consumption demand without any noticeable impact on the supply of goods. Hence, the large increase in demand triggered by the fiscal stimulus policy, together with the slow pace of adjustment in production, likely contributed to the current imbalance in the goods market, resulting in the depletion of inventories, pronounced bottlenecks, and ultimately inflation.

The steep surge in goods consumption in countries with large fiscal support may have also created extra demand in other countries through an increase in demand for imports. This demand surge was met by limited supply capacity. Indeed, while both production, transportation and shipping capacity have adapted to increasing global value chain participation over the past few decades, the necessary infrastructure appeared to be quite inelastic in the short run. To further investigate this intuition, we turn to a cross-country regression analysis. For each country, we compute "excess inflation" by taking the 2021Q4 12-months inflation rate and subtract the average rate of inflation each country experienced during the 2015-2019 period. We then construct several measures of exposure to domestic and foreign fiscal stimulus and project excess inflation on such measures.

First, Exposure to Domestic Fiscal Stimulus captures each country's fiscal support, as presented in figure 3. Second, Exposure to Foreign Fiscal Stimulus measures a country's exposure to foreign stimulus and contains two parts: (i) a "vertical" component which is defined as a trade-weighted average of other countries' stimulus measures, and (ii) an "horizontal" component capturing the exposure of each country's import-partners to third countries' fiscal stimulus. Intuitively, the United States can be exposed to fiscal stimulus from Canada, both through a high import share (i.e, imported inflation) and through a high export share (i.e., higher demand from Canada). This captures vertical foreign exposure. Moreover, the price of Canada's exports to the United States may be pushed up by Canada's exposure to Mexico's fiscal stimulus. This captures horizontal foreign exposure.

We find that excess inflation is significantly correlated with each country's domestic stimulus, as well as with exposure to foreign stimulus. When taken separately or when used in conjunction with domestic fiscal stimulus, both vertical and horizontal exposure to foreign stimulus appear to be significantly correlated with domestic excess inflation. Moreover, our results show that excess inflation is also strongly related to our aggregated measure of Foreign Exposure.

Before describing our results further, we need to acknowledge several limitations in our analysis. Our estimation relies on the association between excess inflation and exposure to domestic and foreign fiscal stimulus, but it might be the case that countries that engaged in larger fiscal support are also those that have been the worst hit by the pandemic and thus had a greater recovery. In such a case, and if the severity of the pandemic is itself positively correlated with excess inflation in the recovery period over and beyond the effect of fiscal support, then we would suffer from an omitted variable issue bias. Moreover, the bias would be positive because our fiscal stimulus variable would capture both the direct effect of the pandemic and the effect of the fiscal spending. Future work on this topic would gain from addressing such concern. For the moment, the results should be viewed as illustrative, highlighting perhaps the higher end of potential price pressures from fiscal stimulus during the pandemic.

Back-of-the-Envelope Calculation: Quantifying the Impact of Fiscal Stimulus on Inflation.

Keeping in mind the caveats described above, figure 5.1 presents the impact of domestic and foreign exposure on excess inflation for several regions, based on our regression estimates. The impact of domestic fiscal stimulus on inflation is highest in the United States. Canada, a country with strong trade links with the U.S., features a high level of excess inflation related to exposure to foreign fiscal stimulus. In large economies, not surprisingly, domestic stimulus is a more important driver of excess inflation than foreign stimulus. For example, domestic stimulus is associated with a 2.5 (ppt) in excess inflation in the United States, 1.8ppt in the Euro Area.

Fiscal policy and excess inflation during Covid-19: a cross-country view: Extended Excerpt Image 5

Conversely, smaller economies are relatively more sensitive to foreign stimulus. In figure 5.2, we derive a measure of "international spillover" of U.S. fiscal stimulus. In particular, we isolate the share of U.S. stimulus in foreign exposure for several countries and compute the associated excess inflation in those countries. Our estimation implies that US fiscal stimulus was associated with an excess inflation of about 0.5 percentage points in the United Kingdom.

4. Conclusion.

The COVID-19 pandemic hampered firms' ability to produce and consumers' ability to consume. In response to economic disturbances, many governments resorted to large fiscal stimulus. This policy was successful at boosting consumption which, together with relatively inelastic supply, may have led to supply chain bottlenecks and price tensions.

However, one should also recognize the positive role played by generous government support throughout this unprecedented crisis. The large spending supported a strong economic rebound, with both GDP and employment recovering at a remarkable pace, likely preventing worse outcomes despite the price pressures that may have resulted from the spending.

References.

Amiti, Mary; Heise, Sebastian and Wang, Aidan. "High Import Prices along the Global Supply Chain Feed Through to U.S. Domestic Prices." Federal Reserve Bank of New York Liberty Street Economics, November 8, 2021.

Leibovici, Fernando and Dunn, Jason. "Supply Chain Bottlenecks and Inflation: The Role of Semiconductors." Federal Reserve Bank of St. Louis Economic Synopses, 2021, No. 28.

Ana Maria Santacreu and Jesse LaBelle, "Supply Chain Disruptions During the COVID-19 Recession," Economic Synopses, No. 2, 2022.

Santacreu, Ana Maria; Leibovici, Fernando and Jesse, LaBelle. "Global Value Chains and U.S. Economic Activity During COVID-19." Federal Reserve Bank of St. Louis Review, Third Quarter 2021, 103(3),pp. 271-88.

Santacreu, Ana Maria and LaBelle, Jesse. "Rethinking Global Value Chains During COVID-19: Part 1." Federal Reserve Bank of St. Louis Economic Synopses, 2021a, No. 16.

Santacreu, Ana Maria and Jesse LaBelle. "Rethinking Global Value Chains During COVID-19: Part 2." Federal Reserve Bank of St. Louis Economic Synopses, 2021b, No. 17.

Santacreu, Ana Maria and Jesse LaBelle, "Global Supply Chain Disruptions and Inflation During the COVID-19 Pandemic," Federal Reserve Bank of St. Louis Review, Forthcoming 2022.

Sargent, Thomas J. and Wallace, Neil. "Some Unpleasant Monetarist Arithmetic." Federal Reserve Bank of Minneapolis Quarterly Review, Fall 1981,pp. 1-15.

Sims, Christopher A. "Stepping on a Rake: The Role of Fiscal Policy in the Inflation of the 1970s, https://doi.org/10.1016/j.euroecorev.2010.11.010." European Economic Review, 2011, 55(1): 48-56.

Kehoe, Timothy and Nicolini, Juan Pablo (editors). "Monetary and Fiscal History of Latin America, 1960-2017", 2021, University of Minnesota Press

________________________________

1. François de Soyres (Francois.m.deSoyres@frb.gov) and Henry Young (Henry.l.Young@frb.gov) are with the Board of Governors of the Federal Reserve System. Ana Maria Santacreu (Ana.M.Santacreu@stls.frb.org) is with the Federal Reserve Bank of St Louis. The views expressed in this note are our own, and do not represent the views of the Federal Reserve Bank of Saint Louis, the Board of Governors of the Federal Reserve, nor any other person associated with the Federal Reserve System. Return to text

2. See Santacreu and LaBelle (2022) Return to text

3. Several aspects of this line of reasoning, including the role of semiconductors and the importance of supply-chain bottlenecks, have been documented in recent contributions such as Amiti et al. (2021), Leibovici and Dunn (2021), Santacreu et al. (2021), Santacreu and LaBelle (2021a, 2021b, 2022) Return to text

4. In our baseline specifications, we use country fixed effects to account for unobservable factors such as heterogeneous trend growth across countries. Our results are qualitatively similar with different fixed effects. Return to text

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
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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.

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
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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.

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
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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.

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
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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.

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
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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.

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.

U.S. Fiscal Stimulus during COVID-19 added ~2.5pp to inflation through Feb 2022 @FSoyres.

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?

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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?

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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.

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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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