Why NYC Voters Favor Mamdani

After winning the Democrat party mayoral primary 56.4% to 43.6% in the first round of rank choice voting in June, NY state Assemblymember Zohran Kwame Mamdani has led NYC's general election mayoral field by very substantial margins & is widely expected to win.  

Turnout for the June primary was 10.1% of elegible city voters - although it was very low, turnout was the highest for a mayoral primary since 1989 - meaning Mamdani won the party's nomination with 5.7% of the eligible vote.  There was an increase in the number of voters under 50 (51% were under 50 or 146,000 more than in 2021) & an increase of 25% of new voters who had never voted in a Democrat primary before.  Older voter turnout remained high but only 5% of voters under 30 turned out.

(Note: AOC came to power in 2018 by winning her congressional seat primary receiving 7.4% of the registered vote in a 12.9% turnout election.)

 

To me one of the biggest reasons for Mamdani's large lead is the extremely weak field.  He has already soundly beaten his closest rival, Andrew Cuomo, once in the primary when Cuomo was running as a Democrat (he is now an Independent).  Andrew Cuomo resigned as governor of NY in August, 2021 because of sexual harassment allegations & creating a hostile & toxic work environment for women.  And even more stupidly Coumo ordered over 4,500 patients recovering from Covid-19 be sent to NY state nursing homes & then under reported deaths to the NYSDOH by 9,250.  To put this incompetence in perspective 2,753 died on September 11, 2001.

Republican Curtis Sliwa is the best candidate for NYC (head & shoulders above the other two) but of course he has no chance of winning - I would vote for  him if I lived in NYC.  Sliwa received 28% of the vote in 2021 running against current Mayor Eric Adams who has dropped out of this race after polling in the single digits following corruption scandals & the loss of campaign funds.

Mamdani's double digit lead fell to 4 points when voters were asked how they would vote without Sliwa in the race meaning that voters don't see much difference between Mamdani & Coumo who could not bring himself to say he is a capitalist when meeting with the WSJ editorial board.  The best they got out of him was that America is a regulated capitalist market.  See more on this later.

But it is more than just a weak field.

Mamdani is a self proclaimed democratic socialist & member of the Democratic Socialists Of America (DSA).  He is also running on the Working Families Party line.

The NYC chapter of the DSA is the largest socialist organization in the country.  Their goal is to build working class power to transform NYC into a place where working people have the power through democratic means to ensure everyone can live a dignified life.  This sounds good to the people (voters) described above.  It also sounds like it could easily become Marxism-Leninism to me in that the DSA would act as a vanguard party organized through democratic centralism to seize power on behalf of working people (i.e., the proletariat) & ultimately establish a one-party communist state (e.g., the ideal of the USSR that Lenin founded).  

Mamdani's general position is that the government's job is to make people's lives better.  Below from Mamdani's website, ZohranForNYC.com, are some specifics regarding how he plans to make life better for New Yorkers.  

1. Freeze the rent in all rent-stabilized apartments & use every available resource to build additional housing to bring down the rent.

2. Fast fare-free buses will permanently eliminate the fare on every city bus & make them faster by rapidly building priority lanes & other traffic engineering ideas.

3. The creation of the Department of Community Safety will prevent violence before it happens, by prioritizing solutions like investing in citywide mental health programs and crisis response—including deploying dedicated outreach workers in 100 subway stations, providing medical services in vacant commercial units, and increasing Transit Ambassadors to assist New Yorkers on their journeys—expand evidence-based gun violence prevention programs, and increase funding to hate violence prevention programs by 800%. Police have a critical role to play - their time will be freed up from doing social safety net work to doing their actual jobs, which were not defined. 

4. No cost childcare will be implemented for every New Yorker aged 6 weeks to 5 years, ensuring high quality programming for all families. And wages will be brought up for childcare workers – a quarter of whom currently live in poverty – to be at parity with public school teachers. It will foster early childhood development, save parents money and keep our families in the city they call home.

5. The creation of a network of city-owned grocery stores will focus on keeping prices low, not making a profit. Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers. They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing. With New York City already spending millions of dollars to subsidize private grocery store operators (which are not even required to take SNAP/WIC!), we should redirect public money to a real “public option.”  Note - Mamdani is really proposing a pilot program of five city-owned grocery stores, one in each borough.  Sixty-seven percent of voters in NYC approve of the idea.

6. Mostly using proceeds from the sale of municipal bonds the City’s production of permanently affordable, union-built, rent-stabilized homes will be tripled by constructing 200,000 new housing units over the next 10 years.  Any 100% affordable development gets fast-tracked: no more pointless delays. The City’s housing agencies will be fully staffed so the work can get done.

7. The Mayor's Office To Protect Tenants will be overhauled to make sure owner landlords are held responsible for the conditions of their buildings. Tenants will be able to schedule and track inspections. If a landlord refuses to make a repair, the City will do it and send them the bill. And in the most extreme cases, when an owner demonstrates consistent neglect for their tenants, the City will decisively step in and take control of their properties. The worst landlords will be put out of business.

8. Bringing down the cost of living through city-owned grocery stores, universal childcare, & all of the other above ideas will be paid for by raising the corporate tax rate to match New Jersey’s 11.5%, bringing in $5 billion.  The wealthiest 1% of New Yorkers—those earning above $1 million annually— will be taxed a flat 2% tax.  Common-sense procurement reform will be implemented, senseless no-bid contracts will end, more tax auditors will be hired, and a crack down on fine collection from corrupt landlords will be pursued to raise an additional $1 billion.

9. All of the parents or guardians of the estimated 125,000 babies born in NYC each year will receive Baby Baskets consisting of a collection of essential goods and resources, free of charge, including items like diapers, baby wipes, nursing pads, postpartum pads, swaddles, and books.

10.  Public schools are to be fully funded with equally distributed resources, strong after-school programs, mental health counselors and nurses, compliant and effective class sizes, and integrated student bodies.  Car-free “School Streets” to prevent traffic fatalities will be created, improving play, and lowering pollution for every school, while addressing student homelessness.

11.  A massive decarbonization and climate resiliency process citywide will be pursued including building out renewable energy on our abundant public lands and fulfilling the vision of Local Law 97 through greater enforcement and assistance from the City for middle income homeowners.  A disaster preparedness program that prioritizes safe and resilient housing, public waterfronts, and other infrastructure at the forefront of flood protection will be overseen using a multi-agency approach to tackle extreme heat, which kills more people—particularly New Yorkers of color—than any other type of weather event. Finally, ConEd will be firmly opposed as it tries to raise utility rates by over 10%.

12.  The climate crisis & delivering a plan for a better & cleaner NY are intertwined with an unprecedented investment in public schools including renovating 500 public schools with renewable energy infrastructure and HVAC upgrades, transforming 500 asphalt schoolyards into vibrant green spaces, creating 15,000 union jobs, and building resilience hubs in 50 schools that provide resources and safe spaces during emergencies.

The above dozen points provide a very good flavor of what Mamdani is all about, but if you need more just click on the above linked website to learn Mamdani's thinking on LGBTQIA+ Protections, healthcare, labor, raising the minimum wage to $30/hr by 2030, regulating delivery apps & protecting delivery workers, small businesses, libraries, & Trump-proofing NYC.

In summary, The Mamdani website claims it will bring down rent, repair housing, create high-quality, universally accessible transportation, fully fund schools, ensure everyone makes a livable wage, provide universal childcare & will improve the material conditions of New Yorkers’ lives thereby fostering a safer New York City. 

The Mamdani website publicizes Mamdani being endorsed by AOC, Bernie Sanders, Elizabeth Warren, Jerry Nadler, Nydia Velasquez, Letitiia James, & NYC Comptroller Brad Lander.  In addition Rashida Tlaib, Ilhan Omar, Pramila Jayapal, Kamala Harris, & Kathy Hochul have endorsed Mamdani.  House Minority Leader Hakeem Jeffries was late to the party but he now too endorses Mamdani.  NY's two senators, Schumer & Gillibrand are waiting to see how DSA policies catch on before they align themselves with Mamdani.  That is a lot of states & congressional districts being led by people who approve of this rot.  It shouldn't take long for more leaders in California, Oregon, Washington, & Illinois to join in also.  The longer it takes politicians like Schumer to get onboard with DSA policies the worse it will be for them if Mamdani really takes off.

It is not hard to understand how Democrats flock to the above socialist doctrine since they have been moving in that direction for decades.  But it is hard to understand how self-described conservatives & life-long Republicans could accept the following examples of socialism & government interventionism along with government managed trade mercantilist policies implemented by Trump over the past nine months as just fine policy since it goes against everything they have ever stood for & is replacing the free market capitalism that made America prosper. 

The examples: 

1) During the negotiation for Nippon Steel's acquisition of U.S. Steel, the government secured a "golden share" giving itself veto power over major decisions of this private company;

2)  The government  announced it has purchased a 10% stake in the chip manufacturer Intel thereby making it Intel's largest holder of common stock surpassing BlackRock & Vanguard; 

3) In what the National Review called extortion, Nvidia & AMD obtained export licenses from the government that restricted the companies selling artificial intelligence chips to China except under the condition that the companies pay the federal government 15% of the revenue from those sales; 

4)  The government acquired a 15% stake (preferred stock) in MP Materials thereby making it the firm's largest shareholder & provided a loan for a new facility & a price floor for MP's products agreeing to buy 100% of the rare earth magnets produced @ the new facility; 

5) The Department of Energy has obtained 5% equity stakes in both Lithium Americas & the Thacker Pass lithium mine project in Nevada deferring the first five years of debt service on an over $2 billion loan for the project totaling $182 million; 

6) Commerce Secretary Howard Lutnick said the MP Materials & Lithium Americas ventures are typical of the kinds of projects the government intends to pursue; 

7) The government has leveraged its power to influence private companies & institutions, including law firms and universities or just telling Walmart to "eat the tariffs"; 

8) Because of the government shutdown Trump has not been able to provide relief ($10B - $15B estimate) for farmers who have lost a significant portion of their export soybean trade with China who has imposed retaliatory tariffs that make Brazil & Argentina's soybean prices lower than America's.  In Trump's first term he reimbursed farmers across the country over $23 billion for an identical situation & the farmers' still have not regained their market share even before China's retaliatory tariffs in 2025; 

9) Trump encouraged (strong armed) Coca Cola to use U.S. cane sugar in its trademark Coke soda instead of the cheaper high-fructose corn syrup recipe the company has used since the 1980s that was prompted by rising sugar prices & domestic corn subsidies. The firm will make two products - one with cane sugar & one with high-fructose corn syrup - both equally as bad for you in excessive quantities; 

10) The firing of people in the Labor & Commerce Departments responsible for presenting economic data on unemployment, inflation, & GDP & replacing these people with biased Trump supporters will not end well for America if this data is distorted.  Neither will firing & replacing Federal Reserve governors, including the Chairman, with similar biased Trump supporters.  The dollar is today's gold standard that the BRICS countries are only too happy to replace;

11) The firing of three members of the National Capital Planning Commission (& replacing them with hand picked yes-men) via email sent by Trent Morse, the deputy director of the White House's personnel office, cleared the way for the demolition of the East Wing of the White House with no further procedure, protocol, or oversight;

12) Trump's launch of the federal website "TrumpRx" will try to do for drug prices what ObamaCare did for healthcare insurance - which Republicans still call socialism to this day - & is similar in principle to Mamdani's city run grocery stores.  Republicans once argued that the government negotiating drug prices was a form of price controls that could limit drug research & innovation thereby denying such future world class drugs from ever being presented to the citizenry;  

13) In an authoritarian move the FCC threatened the broadcast license of ABC if it did not take comedian Jimmy Kimmel off the air when the government did not like Kimmel's comments following Charlie Kirk's murder; &

14) Because of an Ontario ad campaign run during televised World Series games highlighting President Reagan's radio address from 1987 that correctly explained how tariffs hurt "every American worker & consumer" Trump cut off trade talks with Canada & arbitrarily & punitively imposed an additional 10% tariff on Canadian goods without saying when the new tariffs would take effect, if USMCA-compliant goods would be exempt, & under what authority he is using to impose these tariffs. 

***

Based on all of the above we can see that Mamdani's brand of socialism is centered on the FDR New Deal version of expanding social services - the kind where you run out of other people's money - while Trump's version is centered on state control of private business in the more classic definition that socialism is literally government control of the means of production - which can take a little longer to run out of other people's money.  Judge for yourself which version more closely follows the DSA's 2021 national platform that called for "nationalization of utilities, critical manufacturing, technology companies, institutions of monetary policies . . . & finance."

The results of the Democrat primary & further polling since shows that socialism is winning the day in NYC.  Gallup found that Democrats' positive opinion of capitalism decreased from 51% in 2010 to 42% in 2025, while Republicans actually increased toward capitalism from 71% to 74% during these same points in time.  Independents, who I have always found to tend to be more Democrat, went from 61% positive toward capitalism in 2010 declining to 51% in 2025. 

But the majority of the readership of this blog know that what Mamdani primary voters aged 30 & 50 have seen during their lives is not capitalism.  

Susan Lee wrote in the 1980s that the United States is a mixed economy of equal proportions of capitalism & socialism.  Professor Friedman said in the 1990s that America had been more than 50% socialist for many years.

And just what should you expect from people educated in government schools during these years.  The high school graduation rate in NYC is 84% with 56% of the graduates proficient in reading & 53% able to add 2+2 & get somewhere near four.  So it would be hard for them to know the history that socialism has failed every place it has ever been tried. Do they know that the second "S" in USSR stands for "Socialist" & that the country was a single-party state led by the Communist Party, whose goal was to build a communist society.  You really can't expect such people to read & understand Thomas Sowell's classic book "Basic Economics" that provides numerous examples of why rent controls fail.

All of the above is just too hard for people who only want to slide down the stages of Death Of Democracy voting themselves generous gifts from the public treasury by electing the candidates who promise the most benefits from the public treasury - in this case Mamdani followed closely by Coumo.

Such people haven't given a thought to the fact that a socialist society has topped @ the minute it turns socialist - its standard of living becomes static @ whatever level it is in @ its first moment until its deterioration results in collapse because there is limited or no incentive for creating wealth or anything of value. 

America has far too few people making things of value & far too many people on government programs taking things of value.  If we could get the takers to be productive we would increase the GDP per capita immediately.

Economic growth is the bedrock foundation of the U.S. standard of living & our prosperity.  In essence it's how many people are working & how productive they are.  Earlier this month the importance of economic growth was recognized when the 2025 Nobel Memorial Prize in Economic Science was awarded to three economists "for having explained innovation-driven economic growth."  Socialism breeds stagnation not growth.

In addition to NYC's mayoral race, New Jersey & Virginia have races of significance.  Republicans offer Jack Ciattarelli as their candidate for governor of NJ & Winsome Earle-Sears for governor of Virginia - both excellent candidates.

Many establishment Democrat party leaders are not ready to risk the party's future on Mamdani's brand of socialism but would rather stake their hopes on self proclaimed centrist or moderate candidates like they claim Mikie Sherrill (Democrat candidate for NJ governor) & Abigail Spanberger (Democrat candidate for Virginia governor) are.  More recently Spanberger has been referred to as a careful candidate by Kate B. Odell of the WSJ editorial board.  But this moniker really applies to Mikie as well.  After watching each of them debate their opponents the only thing they are careful about is to not say anything of substance, which they never do - their candidacies are built on nothing, much like Kamala Harris's was for president in 2024.

In her debate careful, candidate Spanberger would not answer when asked four times by the moderator whether she still endorsed the Democrat candidate for Virginia Attorney General, Jay Jones, after it was learned that Jones sent text messages in 2022 fantasizing about the shooting of a political opponent, Todd Gilbert, & hoping Gilbert's children would die in their mother's arms.  Careful candidate Mikie has refused to release her full disciplinary files from the Naval Academy regarding a 1994 cheating scandal involving a stolen copy of an engineering exam that resulted in her being banned from graduation.

If Spanberger could not make a clear uncompromising condemnation of Jones candidacy after the death texts of his opponent & his children, wouldn't it be better for other Democrats to pack in their support for Spanberger & say this is just one race that maybe we shouldn't win.  They may come out ahead in the long run by doing this.

Chiattarelli & Earle-Sears have narrowed the gaps in the polls against these vapid opponents but it would almost take a miracle for either of them to win.  But the surprising, poll defying, decisive victory of Javier Milei's Freedom Advance party in the Argentine midterms on Sunday, including winning in Buenos Aires, the Peronist stronghold, puts a strong tailwind in the air for upsets in America.

To win, Chiattarelli & Earle-Sears must overcome being outnumbered by party affiliation, the Death of Democracy principles, & an electorate educated in seemingly free government schools where the graduates are little more than illiterate.

The Intractable Positions In The Government Shutdown Standoff

The federal government's fiscal year began on October 1.  This means that after September 30 the federal government can operate fully only if Congress has finalized the appropriation process that provides funds for the entire government.  The government shutdown that started last week was caused because Congress did not wrap up the appropriations process on time - even though this date has been known since 1974 when Congress officially moved the fiscal year to begin every October 1.

Obviously something else is in play & that something is leverage that one party sees as an advantage over the other.

In this case the Republicans want to pass a Continuing Resolution (CR) that extends the previous year's spending levels - but only for seven weeks such time being used to negotiate the 12 appropriations bills needed to fully fund the government.  Although they are in the minority in both Chambers of Congress & Trump is in the White House the Democrats know they have leverage over the issue.

I can't think of a shutdown that went well for the Republicans.  

The last government shutdown occurred during Trump's first term & ran from December 22, 2018 until January 25, 2019 making it the longest one to date @ 35 days.  It was caused because Congress & Trump could not agree on an appropriations bill to fund the government for the 2019 fiscal year (which had started almost three months before) or a temporary CR that would extend the deadline for passing a bill.  The fight was over a $5.7 billion line item Trump wanted included to build portions of the border wall which Pelosi & Schumer would not budge on.

This shutdown ended with a three week CR to give Congress time to negotiate a suitable appropriations bill. Trump, after welcoming the shutdown in a meeting with Pelosi & Schumer saying "I am proud to shut down the government for border security, Chuck" & "I will take the mantle.  I will be the one to shut it down. I'm not going to blame you" endorsed the plan amidst increasing security & safety concerns such as a significant number of absences of air traffic controllers.  In short Trump blinked but had a workaround.  

In February 2019 Trump declared a national emergency & diverted $3.6 billion from military construction projects as well as money earmarked for counter-drug programs & another $3.8 billion defunding projects like fighter jets & ships to fund the wall.  The One Big Beautiful Bill Act (OBBBA) signed into law on July 4, 2025 includes $46.5 billion dollars that is available until September 30, 2029 for construction of hundreds of miles of border wall meaning not only did Mexico not pay for the wall but that Congress did not fund the wall during Trump's first term. 

Note - On two occasions Biden & Congress missed funding deadlines.  It was by hours in the first case on March 23, 2024 & 38 minutes in the second case in December, 2024.  But in neither case did the government shut down.

Now this current shutdown standoff could be every bit as difficult to resolve as the 35 day shut down of 2018-2019 because both sides are just as intractable in their positions.  And it's the same participants except for swapping Hakeem Jeffries for Pelosi.

Here's why.

Trump & Republicans in Congress needed to pass a tax & spending bill in 2025 because after December 31, 2025 the individual income tax rates in Trump's first tax bill, the Tax Cuts & Jobs Act (TCJA) of 2017, would expire resulting in the tax code reverting back to the law pre-TCJA which would mean a $4.5 trillion income tax increase in 2026 that Trump acknowledged would be a death knell for his presidency.   The OBBBA passed under a special legislative process known as reconciliation which expedites legislation limited to the fiscal budget by the slim Republican margins of 218 to 214 in the House & 51 to 50 in the Senate with the Vice President needed to break the tie.

The reconciliation rules were added to the Senate rules in 1974 to expedite legislation on budget matters only, meaning the Senate filibuster rules that require 60 Senators to end debate in a process known as cloture does not come into play for budget matters.  The filibuster has its roots going back to the very first Senate session of September 22, 1789 & came about due to an early decision by the Senate to allow unlimited debate, hence the Senate became known as the world's greatest deliberative body - but not on budget matters the last 51 years.

So the OBBBA was signed into law with no Democrat support after the Republican leadership miraculously held their slim majorities together that resulted from the 2024 election showing once again that elections have consequences.  The OBBBA totaled 870 pages & included plenty of bafflegab but the biggest contention centered around 9 million able bodied people 19 to 64 years old who are eligible for Medicaid through the ObamaCare expansion losing coverage in 2027 for failure to meet very modest work requirements.  Democrats vowed to make this a campaign issue in the 2026 midterms which is their right & for them probably a good strategy, although it is still over a year away.

But of a more immediate nature buried in the OBBBA is the elimination of temporary enhanced subsidies for ObamaCare that were passed by Democrats on March 11, 2021 as part of the American Rescue Plan Act (ARPA).  The enhanced subsidies provided by the ARPA were originally set to expire @ the end of 2022.  However, the Inflation Reduction Act (IRA) of 2022 extended them for an additional three years, through the end of 2025 or less than three months from now.  These types of seemingly well meaning temporary provisions that turn into permanent government dependent programs are the type of consequences we get when Democrats win majorities in elections.

Democrats demand that the expiring subsidies be reinstated - that is their price that must be paid for reopening the government.  In essence the Republicans put the expiration of the subsidies in the OBBBA in July & Democrats want to reinstate them in October.  This is the basis of the intractable positions - something like asking what happens when the irresistible force meets the immovable object.  

Keeping the federal government funded & open requires legislation that is subject to the Senate filibuster & cloture rules meaning that with the slim 53 to 47 majority that Republicans have they will need some Democrat support to reopen the government.  Click here to see the October 3 vote that failed 54 to 44 with two not voting.  Note the Vote Summary says Required For Majority: 3/5  Vote Result: Cloture on the Motion to Proceed Rejected.

It raises the question - is having leverage @ the start of the fiscal year better than winning elections?  It certainly shows the fragility of the Republican majority & points out that there was no election mandate if Republicans can't pick up seven Democrat senator votes.

The Democrats' strategy is to portray Republicans as hard hearted politicians who want to increase healthcare premiums of poor people.  About 24.3 million people are enrolled in ObamaCare with 92% (22.4 million) of them receiving the subsidies including people in households who make over 400% of the federal poverty level & have costs capped @ 8.5% of income.  It is estimated that when the subsidies expire @ the end of the year that the average monthly premium will increase by 75% for people currently receiving the subsidies, which in turn could cause many people to drop ObamaCare.  Trump & Republicans have wanted to replace ObamaCare since before 2017 but they have not said with what.

In summary, both parties have used the rules (reconciliation for Republicans & the filibuster & cloture for Democrats) to make the most of their positions, which is politics.  In the shutdown standoff the public will be drawn in much more regarding the terms & conditions to reopen the government than they were in the writing of the OBBBA.

Republican pollsters John McLaughlin & Tony Fabrizio have advised Trump that there are many Republican voters, especially in Texas, Georgia, & Florida, who will get letters telling them of their upcoming premium increases that are in line with the OBBBA.  These letters are starting to come out now.

How do you think this is going to turn out?

Second Set Of Inspirational Quotes - This Time With A Theme

Back in June I posted a set of five quotations I saved from blogs & e-newsletters I subscribe to that feature quotes of the day as part of their presentations.  Although these were random selections I received comments like "good ones" & "All quoted statements are great.  I try to live what they say."

Below is a second set of five that I selected that is not random but establishes a theme.  

1.  "We have met the enemy & he is us." - Pogo, April 22, 1970

2.  "Men at some time were masters of their fates: The fault, dear Brutus, is not in our stars, But in ourselves. . ."   - Cassius speaking to Brutus in Shakespeare's play Julius Caesar

3.  "This city is what it is because our citizens are what they are." - Plato writing in The Republic

4.  "Be a yardstick of quality.  Some people aren't used to an environment where excellence is expected." - Steve Jobs

5.  "You take people as far as they will go, not as far as you would like them to go."  Jeannette Rankin

Real Life Doubling Quiz - Twice

Long time readers will remember the Compound Interest Quiz from July, 2017 that asked "If something is growing 100% per annum, how much does it grow every six months?"  There were many correct answers all of which I posted online.

The SC Businessman responded "All I want to know is what is growing at 100% per annum!."  

In response to JR who was working the problem from  a few different angles using $1,000 as a basis I offered "The $1,000 needs to become $2,000 in one year (& then $4,000 the next year etc.).

Well it actually has happened.

Check out the following graphic & you will see that Nvidia did exactly what the original quiz asked & even more - it doubled twice in two years.

Click on graphic to enlarge

Using only information from the above graphic (i.e., year 1 Nvidia's market capitalization went from $1 T to $2 T & year 2 it went from $2 T to $4 T) & without using pencil, paper, or a calculator please let me know your intuition regarding Nvidia's performance:

A.  Do you think the compound rate of growth is more in the first year than the second?, or

B.  Do you think the compound rate of growth is more in the second year than in the first?, or

C.  Do you think the compound rate of growth in the second year is less than or equal to the compound rate of growth in the first year?, or

D.  None of the above choices.

I will post all correct answers or alternatively will send it privately to anyone who requests it if no one figures it out.  

In the meantime I hope you own the next investment that doubles twice in two years.  What the heck - three times in three years.

An Analysis Of The OBBBA

Leading up to the congressional votes in both the House & Senate it was obvious that Trump had a vested interest in getting the One Big Beautiful Bill Act (OBBBA) signed into law.  Trump wasn't picky about what the OBBBA included as long as it permanently extended the individual income tax provisions of the Tax Cuts & Jobs Act (TCJA) that he signed into law on December 22, 2017 & kept his campaign promises of no tax on tips, overtime, or Social Security benefits.

The urgency of the matter was that the individual income tax rates were set to expire after December 31, 2025 which would have resulted in the tax code reverting back to the law pre-TCJA which would mean a $4.5 trillion income tax increase in 2026 which very well could have triggered a recession thereby effectively ending Trump's 2nd term presidency & marking Trump as a failed president - an idea Trump was very aware of according to his close personal friend Bill O'Reilly.

Trump worked the phones & called GOP elected reps to the White House so that the OBBBA wound up with only 5 Republicans in total voting against it - In the House: Thomas Massie (KY) & Brian Fitzpatrick (PA); & in the Senate Rand Paul (KY), Thom Tillis (NC), & Susan Collins (ME).  The vote was 218 to 214 in the House & 51 to 50 in the Senate with the Vice President needed to break the tie.  Every Democrat in both chambers voted against the OBBBA which could be interpreted to mean that they were fine with the $4.5 trillion income tax increase in 2026.

Massie & Paul voted against the OBBBA because it would increase the debt, inflation, federal spending, & interest rates while Fitzpatrick, Tillis, & Collins voted against the OBBBA because it would result in reductions to projected federal Medicaid funding they regarded as too deep - Medicaid funding actually increased under the OBBBA but the rate of growth slowed.  In Washington this is regarded as a cut even though actual funding increases.  Almost nothing is ever actually cut in Washington & this is why the national debt keeps increasing.  The OBBBA, with Republicans holding the House, Senate, & presidency gave us a chance to do better. 

Like many, if not most of the major laws passed in the past 45 years the OBBBA was passed under a special legislative process known as reconciliation which expedites legislation limited to the fiscal budget - i.e., tax, spending, & the debt limit.  Reconciliation was created by the Congressional Budget Act of 1974.  President Reagan's two major tax & spending bills (The Economic Recovery Tax Act of 1981 & the Tax Reform Act of 1986) as well as Trump's TCJA of 2017 were passed using reconciliation.  More recently Biden's American Rescue Plan Act of 2021 & the Inflation Reduction Act of 2022 were passed under reconciliation.

The reconciliation process starts with the House & Senate initiating instructions (reconciliation directives) in a jointly agreed upon budget resolution that sets overall spending & revenue targets from which lawmakers work in finalizing appropriations & revenue legislation that is specifically intended to change existing law to align spending & revenue levels with the targets outlined in the budget resolution.

Under reconciliation the House & Senate must agree on a joint bill & there is no filibustering in the Senate & no changes to Social Security are allowed.  Amendments are limited in scope with the Senate parliamentarian ruling on the appropriateness of amendments.  All of this streamlines budgetary matters from standard congressional procedures.

The budget resolution set a $2 trillion minimum deficit reduction target for mandatory spending cuts over the ten years, 2025 through 2034, while maximizing tax cuts to $4.5 trillion over the same ten year period.  The time frame specified in the budget resolution for the OBBBA is ten years, often referred to as the budget window.  Very important, under reconciliation rules the budget targets adopted in the reconciliation process cannot intentionally increase the deficit beyond the ten year budget window - this rule played a big role in passing the TCJA in 2017 & the OBBBA.

The above provides the background for the process that produced the OBBBA.  Below are some specifics of the final bill that are enlightening.

1.  Medicaid reductions - not actual cuts in total spending but reductions slowing the rate of growth

The OBBBA did reduce the rate of growth of Medicaid by $1 trillion over the next ten years.  The problem is that Medicaid was scheduled to increase by more than $1 trillion over this period so in the end the program continues to grow.  This is a part of the OBBBA that Thomas Massie, Rand Paul, & I have a problem with.  But neither the congressman or senator's votes or my opinion was able to stop the OBBBA from passing.  

Under the OBBBA federal Medicaid spending is scheduled to increase by 26% from 2025 levels which equates to a 15% reduction compared to what was previously projected for 2034.  See graphic below.

click on graphic to enlarge

The budget directive to the House Energy & Commerce committee to cut $880 billion over ten years was the catalyst that led to $1 trillion being cut from Medicaid's projected federal spending from 2025 to 2034 despite Trump's promises to never cut Medicaid & threat to veto the OBBBA if Congress did.  No matter how hard Democrats protested over the months prior to the passing of the OBBBA, Republicans & conservative pundits on TV said they would not cut Medicaid despite it being obvious that no other program but Medicaid was large enough to meet the budget directive's target for the House E&C committee who has sole jurisdiction over Medicaid. 

The biggest reduction to Medicaid's projected federal spending comes from almost 9 million able bodied people 19 to 64 who are eligible for Medicaid through the ObamaCare expansion losing coverage for failure to meet work requirements (exemptions for those with dependent children & medical conditions).  People in this category will have to prove their incomes are below state thresholds semiannually rather than annually, plus prove they have spent 80 hours a month working, volunteering, or attending school.  Does this seem too much to ask?  Similar requirements pertain to receiving food stamps - people in the lowest income decile stand to lose food stamps.  

Another big reduction to Medicaid's projected federal spending involves restricting the cash flow gimmick that states & hospitals use in gaming the system.  States charge hospitals provider taxes.  Once this tax money is received the state can use these same funds to increase Medicaid payments to the hospitals thereby reimbursing the hospitals for paying the provider tax.  The states' Medicaid payments that use the provider tax adds to the states' costs that generate federal matching funds that end up with the hospitals receiving back more money than they paid in provider taxes.  A sorry exercise for the real taxpayers.

Democrats plan on making cuts (not reductions to projected federal spending) to Medicaid in the OBBBA one of the main issues of the 2026 midterms.  See below for how Republicans should counter these claims. 

Medicaid should completely be a state function with no federal involvement.

2.  Reinstatement of the SALT (State & Local Tax) deduction

The reinstatement of the SALT deduction in the OBBBA after it was severely restricted in the TCJA of 2017 is the most inexplicable part of the OBBBA based on the merits.  But Trump wanted it included for political reasons - to help the reelection of blue state GOP congressmen who think it behooves them to have states where they're from like New York & New Jersey receive federal tax money from people in Tennessee & Florida to help pay for the high NY & NJ state & local taxes that used to be 100% deductible prior to the TCJA.  The OBBBA reinstates what are actually subsidies from well run states to states like NY, NJ, & CA.  High tax blue states had no incentive @ all to control state spending until the TCJA & even then states found workarounds for some, but not all, people.  With the OBBBA the door has @ least been put ajar.  And who thinks this issue will help GOP congressmen win reelection in NY or NJ?

The OBBBA allows SALT deductions this year of up to $40,000 per income tax return, not per person, so it starts with a marriage penalty for couples who file joint returns.  The SALT deduction lapses in 2029 & has a phase out that begins @ an annual modified adjusted gross income (MAGI) of $500,000 & reverts back to the current TCJA SALT limit of $10,000 once MAGI reaches $600,000 so it is a boon to people making several hundred thousand dollars per year who have property tax & state income tax (or state sales tax) that total $40,000.  It is no benefit for people with MAGI of more than $600,000 per return in 2025.  To use the SALT deduction you have to itemise deductions on Schedule A so you have to compare the SALT deduction benefit to using the quite generous indexed to inflation standard deduction that has to be exceeded for any of this to be beneficial.  Both the $40,000 cap & the $500,000 & $600,000 income thresholds increase 1% each year from 2026 through 2029 before the cap resets to $10,000 starting in 2030. 

In addition, taxpayers are required to check the interplay between the Alternative Minimum Tax (AMT) parallel income tax system with the SALT deductions under the OBBBA & pay the higher tax prompting Steve Moore, decades ago, to call the AMT the MMT for Mandatory Maximum Tax.    Since the new increased SALT deduction could lead to some people having significant incomes with small tax liabilities, more people could be subject to the AMT.

Accordingly, for all the reasons given above, the increased SALT deduction may be a disappointment to many well off taxpayers.

The SALT deduction should be zero.

3.  No tax on tips, overtime, Social Security, & car loans

What the OBBBA provides is a far cry from Trump's absolute statement that there will be no tax on tips, overtime, & Social Security.  Under the OBBBA there is no general elimination of taxes on tips, overtime, or Social Security - tips & overtime are still considered taxable income subject to federal income taxes as well as payroll taxes of Social Security & Medicare.  The OBBBA provides deductions for both qualified tip & overtime income.  Social Security cannot be changed by reconciliation so a special senior deduction is available for qualified taxpayers.  These topics are ripe for disappointment because they come with significant limitations.

No tax on tips, overtime, & Social Security are taken right out of Death Of Democracy principles regarding buying votes by Trump, namely, voters effectively voting themselves seemingly generous gifts from the public treasury by voting for the candidate who promises the most benefits.  

Favoring tips, overtime, & Social Security from taxes through special deductions benefits certain targeted groups.  None of this is pro-growth in that each erodes tax fairness (why should a janitor or truck driver making the same income as a tipped worker be taxed @ a different rate or someone working overtime pay less tax than a salaried worker logging in the same number of hours?), jeopardizing government revenue (Social Security trust funds are depleted faster), & distorting labor markets & benefit programs (incentivizing employers to rely on tipped workers or overtime leading to lower base wages & a tipping economy where, for example, consumers tip cashiers for handing the consumer a bag @ a takeout restaurant).  Also, many tipped workers already pay little or no federal income tax due to low earnings so no tax on tips would have limited benefits for these people in the first place.

The tip deduction isn't for all workers & is limited to $25,000 per person for tax years 2025 through 2028 for tipped income that qualifies, defined as voluntarily paid by the customer who determines the amount, & which are received in occupations that customarily receive tips on or before December 31, 2024.  The tip deduction starts to phase out with MAGI of $150,000 ($300,000 if married filing jointly) @ a rate of $100 per $1,000 of income above these limits.  To claim the tip deduction workers are required to report their tips as income & pay payroll taxes throughout the year.  How to claim the deduction will be in the line by line instructions for Form 1040.

The overtime deduction runs from 2025 through 2028 & is capped annually @ $12,500 per individual & $25,000 for joint filers with a phase out range of $150,000 to $275,000 for single filers & $300,000 to $550,000 for joint filers.  An example best shows how the overtime deduction works: if you work M-F eight hours each day & then work 8 hours on Saturday making time & a half you can deduct the half portion of Saturday's pay meaning Trump would have been clearer saying no income tax on the premium portion of overtime pay.  To be eligible for the deduction the overtime must be paid as required by the Fair Labor Standards Act which applies to employees working 40 hours per week.  Withholding will not change in 2025 so people who qualify will receive credit for overtime pay which in turn could lead to a refund next April.

The OBBBA does not eliminate income taxes on Social Security - for tax years 2025 through 2028 it offers a new senior deduction of $6,000 for single filers & $12,000 for joint filers for people 65 & over.  These deductions phase out starting @ a MAGI of $75,000 for single filers & $150,000 for joint filers but here again comes a marriage penalty - the deduction is phased out @ a MAGI of $175,000 for single filers & $250,000 for joint filers.  Without the marriage penalty the joint filers deduction would extend to $350,000.

The new senior deduction reduces taxable income including Social Security benefits subject to taxation, but it does not exempt those benefits which still come under the specific line rules of the Form 1040 instructions.

Currently nine states tax Social Security benefits - Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, & West Virginia.  The OBBBA does not affect these state taxes.

From 2025 through 2028 there is an annual $10,000 taxable income deduction for interest paid on the purchase of new passenger autos for personal use if final assembly was in the U.S.  This deduction phases out between $100,000 to $150,000 of MAGI for single filers & $200,000 to $250,000 of MAGI for joint filers.  If the vehicle weighs less than 14,000 pounds there is a good chance it qualifies but check all the rules with the dealer before purchase.  Most imported cars subject to the new 25% tariff won't meet the U.S. assembly requirement making such vehicles ineligible for the deduction.

4.  Debt & Deficits 

The TCJA of 2017 was passed under a reconciliation budget window of ten years but because the individual income tax provisions of the TCJA increased the debt if they were in place for more than eight years the individual income tax provisions were designed to expire (sunset) after December 31, 2025.  Senate reconciliation rules do not allow the debt to increase outside of the budget window.  It was well known that the individual income tax provisions of the TCJA were temporary & that this matter would require attention in 2025.  If the individual income tax provisions of the TCJA were not extended it was clearly understood that the tax code would revert to its pre-TCJA rates for individuals after 2025 (i.e., under the current law baseline) meaning a $4.5 trillion tax increase for 2026.  Since Trump thought in 2017 that he would be out of office after 2024 this matter only became important to him after being reelected.

In passing the OBBBA last month Republicans resorted to budget deficit gimmickry by changing the basis of the analysis to a current policy baseline instead of the current law baseline that was used to sunset the individual income tax provisions of the TCJA after 2025.  Under the current policy approach Republicans claimed extending expiring individual provision tax cuts would reduce the deficit by $500 billion which is very disingenuous regarding the way the individual provision tax cuts were passed to begin with.  If the tax cuts are extended beyond 2025 the $4.5 trillion in revenue is never realized thereby resulting in a deficit hole that must be closed through spending cuts per the reconciliation process - & of course Republicans are no more capable of reducing spending than Democrats.

In this case an honest gimmick-free attempt to pass the OBBBA would have found $3.3 trillion more in spending cuts over the ten year reconciliation budget window ($3.3 T is the amount of additional spending cuts that would result in the OBBBA having more spending cuts than tax cuts) which would have allowed the bill to pass without chicanery.   It is this chicanery that only Congressman Massie & Senator Paul stood up to.

The national debt held by the public was already projected to be over $50 trillion by 2034 & the OBBBA doesn't cut into this but adds to it.  Rand Paul asked why does the OBBBA increase the debt ceiling by $5 trillion if Congress claims the bill will reduce the debt?  This turned him & Thomas Massie off from the beginning.

During the legislative process Republicans faced two choices: 1) voting against the OBBBA & having Trump find a primary challenger to run against the disloyal Member in the 2026 midterms, or 2) voting for the bill & chance losing the 2026 midterm election anyway.  At one point the OBBBA passed the House by one vote with Freedom Caucus President Andy Harris having the chance to make the entire process restart by voting "No" but instead he voted "Present" & the bill continued.  No leadership by any except Trump.

Poll after poll shows the OBBBA to be unpopular - because the hostile anti-American media continues to present the bill as throwing poor people off of Medicaid in order to give tax cuts to Republican billionaires.  In the runup to the 2026 midterms expect Democrats to present a handful of people with gut wrenching stories who have been thrown off of Medicaid & are devastated by the work requirements described above.  The insidious feature of the OBBBA that has the Medicaid spending reductions go into effect after the 2026 midterms while the tax cuts are retroactive to January 1 will only help portray the Republicans as weasels. And of course Dems will milk the tax cuts for the wealthy for all its worth juxtaposing billionaires with tax cuts against poor people thrown off  Medicaid.  The American people will empathise with those thrown off Medicaid & Republican politicians will shrink from the debate.  

Disgustingly, you can @ best expect Republicans to offer pitiful responses to these charges, never mentioning the number of able-bodied people collecting Medicaid, that Medicaid spending actually increases under the OBBBA (see graphic above), or  that Medicaid began as a state welfare program sixty years ago almost to the date of this post & now covers nearly 100,000 million Americans (more than one in four) & that the OBBBA gave us the best chance ever to return Medicaid to being a state only program thereby eliminating one of the three large federal entitlement liabilities that threaten the country's well being.

Republicans will shy away from saying that the bottom 70% of taxpayers don't receive large tax cuts because they don't pay much in taxes to begin with.  It is too much to expect that defensive Republicans could explain supply-side economic principles: namely, that the reduction in the size of government & its claims on earned income is what fuels economic growth, & hence our standard of living, when coupled with sound-money policies & lower marginal tax rates for the highest income earners who are the job creators.

If we can't win with these arguments we have lost anyway.  That we can only find two out of five hundred thirty five elected politicians to make these arguments is even worse.

Congress & the president (either of the last two) keep spending @ record levels.  Fiscal year 2025 outlays were projected to be 58% greater than the pre-pandemic levels of FY 2019 based on May 2025 data.  It was necessary to pass the OBBBA permanently extending the TCJA individual income tax provisions but unnecessary to include all the gingerbread described hereinbefore, especially using the budget gimmickry of changing baselines when Congress found themselves right back in the same exact spot of December 2017 - namely, how to account for the deficit caused by the TCJA going into 2026.