Democratic Party 2020 Presidential Candidate Positions

Democratic Party candidate positions for 2020 election; we can’t make this stuff up.
Democratic Party 2020 Presidential Candidate Positions
By: George Noga – June 23, 2019

        The first debate among Democratic Party presidential candidates is this week. MLLG has compiled a compendium of the positions publicly advocated by declared candidates. It is presented for our readers in no particular order. Sic loquitur pro se.

1. Payment of reparations for slavery
2. New wealth tax of 3% per year on assets
3. Late term abortion – up to the moment of birth
4. Restoration of voting rights for released felons
5. Impeachment of President Trump
6. Raising the top personal income tax rate to 70% (from present 37%)
7. Refusal to repudiate anti-Semitism by Democrat members of Congress
8. Free college tuition for all
9. Medicare for all (It’s not really Medicare; it’s Medicaid.)
10. Raising the corporate tax rate to 35% (from present 21%)
11. Abolition of the Electoral College
12. Amnesty for illegal aliens
13. No gun rights for released felons (See number four supra.)
14. Capping interest rates on all credit cards
15. Packing the Supreme Court by adding up to four new justices
16. Federal jobs guarantee to everyone
17. Minimum wage of $15 per hour
18. Infanticide: “Make the baby comfortable while deciding whether to kill it.”
19. Impeachment of Justice Kavanaugh
20. Voting rights for felons still incarcerated (including Dzhokhar Tsarnaev)
21. Citizenship (voting rights) for illegal aliens
22. Voting for 16-year olds
23. Green New Deal including no air travel or cows and one car per family
24. Abolish ICE – US Immigration and Customs Enforcement
25. Deep cuts to defense spending
26. Abolishing senate filibusters
27. Single payer government health care for all
28. Federal licensing and control of all large corporations
29. Strict new gun control measures including confiscations
30. Federalizing all voter registration
31. Abolishing or changing the method of representation in the US Senate
32. Ending all private health insurance and insurance companies
33. Reinstituting the Iran nuclear deal
34. Statehood for DC, PR, VI, Guam: 8 new senators; 14 new electoral votes
35. Tearing down existing walls on our southwest border with Mexico
36. Raising the estate tax rate to 77% (from present 40%)
37. Rejoining the Paris Climate Accord
38. Raising the payroll tax by 2.4 points – equivalent to 15%
39. Means testing Social Security
40. Taxing capital gains as ordinary income
41. Removing all caps from the payroll tax
42. Taxing unrealized capital gains each year
43. Jailing corporate executives for regulatory violations
44. Cash distribution of $1,000 per month to everyone (UBI)
45. Forgiveness of all student loan debt – $1.5 trillion
46. Federal payment to teachers of $315 billion over 10 years
47. Outlawing all state right-to-work laws
48. Increase fuel economy standards for all cars
49. Halt all energy leases on federal land
50. Spending $5 trillion (unspecified) to control emissions
51. Opposition to nuclear energy (cleanest energy we have)
52. Creation of new Americorps – to plant trees on marginal land
53. Prohibiting the private practice of medicine (Medicare for America bill)
54. Federal licensing of all firearms – must be renewed every 5 years
55. Abolition of payday loans – by mandating ultra-low interest rates
56. Have the USPS (postal service) make low interest loans to consumers
57. Imposition of a VAT – value added tax on the entire US economy
58. Added 7% corporate tax on reported income higher than taxable income
59. Free government provided health care for all illegal aliens
60. Legalization of recreational marijuana throughout the United States
61. Require companies to obtain equal pay certificate from the US EEOC
62. Dictate national paid leave policy for the entire private sector
63. Mandate federal preclearance for states to pass any new abortion laws
64. Federal taxpayer funding of abortions (repeal of Hyde Amendment)
65. Breakup Google, Apple, Facebook and Amazon
66. New exit tax of 40% of assets for any American giving up citizenship
67. Federal government pays all rent for anyone in excess of 30% of income
68. New promises are being added at the rate of 2-3 each and every week

Next on June 30 is our special Independence Day posting; don’t miss this one!
More Liberty Less Government  –  –

Real World Summers for Students

Students should use summers to escape the PC bubble and to experience the real world.
Real World Summers for Students
By: George Noga – June 16, 2019

           High school and college students would benefit from summer jobs or activities that take them far outside their PC plastic bubbles and expose them to the real world. Students are indoctrinated in progressive dogma from the moment they set foot in school. They understandably come to believe their ersatz PC world is authentic and are unaware just how opposed it is to the real world. Upon leaving their ivy towers at graduation, they are gobsmacked by and unprepared for the world as it really is.

          You may have seen the story about a parent who asked a recent graduate of an elite school what he knew about George Washington. All the student knew was that Washington owned slaves; he knew absolutely nothing else. That is how outre life is inside the progressive bubble. Students would learn much more of value by eschewing traditional summer internships and undertaking one of the activities identified infra. In addition to better understanding the real world and the real America, they might acquire some grit, which would be of inestimable value in their future life.

          Road trip across America: Students could take a trip to see the USA including the Rust Belt, Appalachia, mid-America, mountain west and the desert southwest, i.e. flyover land. They should stay in small towns – often for days at a time and try to engage people. Above all, they must keep a contemporaneous diary and at the end of the trip write a report about who they spoke with, and what they learned. Yale has a Summer Odyssey program, which finances such trips, for their insulated students.

          Gritty jobs: While earning some walking-around money, students would benefit incalculably from jobs like plumbing, house painting, construction or surveying that expose them to a swath of humanity well outside their normal society. They will learn valuable real-world lessons about job demands as well as about human nature from their coworkers. They may also acquire some grit. When I was a student, I worked a variety of gritty summer jobs, including one managing the all-night shift in a bus terminal in a seedy part of town. The life lessons learned there proved invaluable.

        Military and ROTC: All the services have JROTC (Junior ROTC) for high school students and ROTC for college students. JROTC teaches achievement, wellness, character and leadership and offers various challenging summer programs. For college students, ROTC offers demanding summer programs that push cadets to their limits physically and mentally, including paratrooper and ranger training. Military experience offers valuable life lessons and exposure to a culture that is decidedly not PC.

         Summer in Socialist Countries: Students are taught (and many believe) socialism is a great thing – and far superior to capitalism. Such students, who have imbibed the socialist cool-aid, may want to spend a summer in nearby Cuba or Venezuela – but they should remember to bring their own medicine, toilet paper and other essentials.

         It isn’t too late to do one or more of the above this summer or you can begin to plan for next summer. Readers with children or grandchildren in HS or college may wish to encourage (and possibly to help finance) a road trip across America.

       Students can learn a great deal about America, human nature and the real world from people in flyover land, from coworkers in gritty occupations, from military drill sergeants and even from socialists and commies in Cuba and Venezuela.

Next June 23rd is our pre-debate special about Democratic Party positions.
More Liberty Less Government  –  –

Europe’s March Toward Nihilism

Europe is like a dissolute doyenne, blithely sipping absinthe at a cafe, who has traded a few more decades of decadence in exchange for her eventual suicide.
Europe’s March Toward Nihilism
By: George Noga – June 9, 2019

            Europe’s passage to nihilism is nearly complete. For more and more phlegmatic Europeans, life has no intrinsic meaning or value; nothing is morally right or wrong; they are like pigs eating whatever life drops into their trough. A meaningless life is a terrible ordeal no matter how comfortable it is (Nietzsche). Europeans refuse to defend themselves, outsourcing that to America. In the ultimate form of nihilism, they refuse to reproduce, outsourcing that task to immigrants who deride and disdain them.

          Rigor mortis is beginning to descend on Europe as it is experiencing entropy politically, demographically, culturally, morally and spiritually; the lassitude of its people – physically and intellectually – precludes any possible antidote. Just as the absinthe-sipping doyenne, Europe has made a Faustian Bargain and is grasping for time until its eventual demise – a fate it has tacitly accepted. We conclude this post with the plaintive story of Mario, who personifies Europe’s steady march to Gomorrah.

Europe no longer produces the values necessary for its survival.

        The EU as a political construct is in terminal dissolution because it places the state above the individual. It has never won an election in any EU member state; remember Brexit. Nor will the Euro last much longer. Italy is near bankrupt as are Spain, Portugal and some others. The ECB is keeping the ship afloat but monetary policy cannot overcome all the deeply embedded government barriers to growth.

          Europe is flailing economically with GDP growth hovering near 1%, persistently high unemployment, continued quantitative easing and negative interest rates despite many years without recession. Creativity and innovation are dead; when was the last time Europe produced a new technology? Of the top 50 global tech companies, only four are in Europe, but they are washed up vestiges of the past. The specter of decline is stalking Europe; it even outsources its popular culture to America.

        If demographics is destiny, Europe is headed for oblivion. Germany faces the worst demographic crisis extant, except for Japan. The ethnic European fertility rate is around 1.25 and its population will nearly halve every generation. A child without parents is an orphan, but a nation without children is an orphan people. The elites of Europe have embraced diversity but they are committing suicide by diversity. It is but a matter of time until Sweden becomes Western Europe’s first muslim nation.

The True Story of Mario Puts a Face on Europe’s Nihilism

         The last time we were in Paris, my wife and I took a hotel shuttle to the airport; we were the only two passengers and struck up a conversation with our driver. Mario was 33, trilingual, educated and personable. He was from Italy but moved to France because there were no jobs in Italy. His job (driving the shuttle) had no chance for advancement and he expected to remain in the same menial job his entire working life. He lived with a girlfriend but had no intention to marry and was adamant about never having children. He already was thinking about his pension 30 years in the future.

        Mario left his native country and family for a low paying, dead-end job in another country where he would never fully belong. He had already driven the van for 14 years and was facing another 29 years, or 60,000 more trips to the airport. He would subsist on the fringes of society, eschewing wife and children. Nevertheless, Mario’s calculus was that this bleak, hardscrabble existence was better than the life he left behind.

        Multiply Mario by tens of millions and you understand the zombie-like demeanor and look of quiet desperation we witnessed on the faces of Europe’s young people. Those countenances of hopelessness personify Europe’s march toward nihilism. Let’s hope we never see such hollow-eyed expressions on the faces of young Americans.

Coming June 16th – Suggestions for how elite youths can spend this summer
More Liberty Less Government  –  –

Blexit: Black Exit From Democratic Party

A 10 point shift (from 90% to 80%) in the Democrat share of the black vote makes AZ, FL, MI, NC, OH, PA and WI reliably red and it turns CO, MN and NV purple.
Blexit: Black Exit From Democratic Party
By: George Noga – June 2, 2019

          It’s happening! There is an unmistakable shift underway in black voting patterns. MLLG was among the very first to recognize it in our February 12, 2017 post, on our website: Now, the rest of the political world is catching up. This movement has a name, blexit, a term coined by Kanye West and Candace Owens. Blexit is the black exodus from the Democratic Party, but it also includes Latinos and other minorities. Google “blexit” to find a cornucopia of additional information.

        Let’s begin with numbers. To utterly transform American politics, Republicans don’t need to win the black vote; they only need to win an additional 10 percentage points more than in 2016, i.e. to increase their share from 10% to 20%. This would shift 2 million Democratic votes to Republican – a swing of 4 million votes.

          MLLG analyzed such a hypothetical shift on a state-by-state basis. Using official 2016 vote data, we calculated the results of moving an additional 10 ppts of the black vote from Dem to Rep. The results were shocking. Arizona, Florida, Michigan North Carolina, Ohio, Pennsylvania and Wisconsin all would become reliably red states. Moreover, Colorado, Minnesota and Nevada would go from being blue to purple.

       The black vote during Obama’s two elections was 95% and 93% Democratic respectively. In 2016 it reverted back to pre-Obama levels of 88%-90%. However, recent polls show Trump getting 20% of the black vote. Democrats are faced with the Sisyphean task of needing 90% of the black vote; if they win only 80%, they are sunk.

There is absolutely no room for Dems on the upside; it is all downside risk for them.

          This shouldn’t come as a surprise to Democrats, who pander to blacks in election years. Afterward however, blacks still live in the same dysfunctional, crime-infested neighborhoods with the same failed government schools and the same desperate economic prospects. Progressive policies don’t alleviate problems of black Americans, they exacerbate them. Blacks understand this and resent that their votes are captured. 

        Democrats must quit seeing racists behind every tree. Racism has been thoroughly delegitimized; every white supremacist and klansman in America likely could fit inside a high school gym. Blacks in America today are victims of progressivism, not racism. The best antidotes to progressivism’s failures are education, personal initiative, free markets, hard work, thrift and family values. After 70 years of horribly failed liberal policies devastating inner cities, blacks are beginning to push back – hence, blexit.

“Blacks in America today are victims of progressivism, not racism.”

       One issue driving blexit is school choice, which is the civil rights issue of our time. Black leaders (unionists, politicians, educrats) stand in the schoolhouse door keeping poor black children hostage in failed government schools. Black and Hispanic voucher moms are responsible for the 2018 gubernatorial victories of DeSantis and Ducey in Florida and Arizona respectively. If Republicans make school choice a national issue in 2020 as they should, it would scare the bejesus out of progressives.

         Liberalism has failed miserably to improve the daily lives of blacks despite 70 years of progressive rule in inner cities and in deep blue states and after eight years of a black president. Meanwhile, in just a few years, Trump virtually eliminated black unemployment. Blacks, in ever increasing numbers, and led by a new cadre of smart, articulate, conservative leaders like West and Owens, understand they have nothing to lose by abandoning their unquestioned allegiance to failed progressive policies.

         The blexit movement is catching fire and has an aura of historical inevitability. As Trump constantly reminds blacks, “What the hell do you have to lose?

Next: Hotel Europe – You can check out any time you want, but you can never leave.
More Liberty Less Government  –  – 

Enduring Principles of American Politics

The first and foremost principle is that America is a center-right country. 
Enduring Principles of American Politics
By: George Noga – May 26, 2019

           Judging by our feedback, readers can’t seem to get enough of our non-partisan political analysis. Many readers have requested a posting that contains a complete listing of MLLG’s principles of American politics. This post fulfills that request.


          Presidential elections are influenced by, inter alia, parties, candidates, events, issues, ads and debates. Based on American political history and tradition, MLLG has identified eight enduring principles that exert an outsized effect in determining who wins; such principles usually transcend parties, candidates, issues and events. These principles provide you a strong foundation to better understand the 2020 election.

1. America is a center-right country. Forget this principle and you get a Goldwater or McGovern-like outcome. This remains true in 2020; all the prattle about democratic socialism is limited to about 20% of the population. The only center-left candidates elected in the past 75 years were Carter and Clinton, southern state governors, and Obama, who ran as a centrist, was a rare political talent and faced insipid competition.

2. Economics trumps all else. Clinton’s mantra “It’s the economy, stupid.” was exactly on target. If the economy in 2020 remains robust, it creates a powerful tailwind for the incumbent. Every econometric model shows Trump winning handily if the economy remains strong. Voters always reward a politician who makes them better off.

3. There are no permanent majorities. Issues, positions, alliances and demographics continually shift and minority parties skillfully adapt. Movements of all types get subsumed into larger groups. This principle is not relevant to the 2020 election.

4. Money is important but not dispositive. Clinton spent $1.2 billion to Trump’s $600 million in 2016 and still lost. Any serious candidate will get the necessary funding. Spending money has diminishing returns and, at some point, negative returns – a case in point being Huffington’s 1994 CA senate race. Money will not be a factor in 2020.

5. Incumbency is powerful. In the past 126 years, only 2 elected presidents lost head-to-head elections. Americans always vote for the fool they know over the devil they don’t. This principle, ceteris paribus, confers great advantage to Trump in 2020.

6. The longer a party is in power, the more likely it is to lose. With only the exceptions of FDR and the post Civil War era, we must go back 225 years to see any party in power for more than 12 consecutive years. This is not a factor for 2020.

7. Define yourself before your opponent does; as a corollary, define your opponent before he does. It is essential to define who you are with the electorate; failure to do so lets your opponent define you. Like a good joke, defining yourself and your opponent must contain some truth to be effective. Trump is a master of this principle and he employed it to great effect in the 2016 primaries and general election.

8. Polls and approval ratings have limited value. The value of polls lies in identifying issues and sentiment more than who is ahead or behind. Polls today are notoriously inaccurate and undercount Trump support by 3-5 points; no major poll predicted a Trump victory in 2016. Don’t get too worked up over early polls, or any polls for that matter. Remember that many Americans don’t seriously focus on elections until after Labor Day and often don’t decide until weeks, or even days, before an election. Carter led Reagan well into October, yet Reagan ended up winning 44 states.

 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

       As you watch the 2020 election drama unfold, there is one wild card with the potential to utterly disrupt politics as usual. I am referring to the “blexit” movement, i.e. the black exit from the Democratic Party. MLLG was among the very first to identify this trend in our February 12, 2017 post (see it on our website: Next week’s post is devoted 100% to blexit. This is a post you won’t want to miss!

Blexit – the black exodus from the Democratic Party – is next up on June 2nd.
More Liberty Less Government  –  –

Spending Crisis – Part IV

We chose to steal from our children and grandchildren rather than control our spending.
Spending Crisis – Part IV
Can Catastrophe Be Averted?
By: George Noga – May 19, 2019

        This is the fourth and final post in our Spending Crisis series, available in its entirety at Our headline asks, “Can Catastrophe Be Averted?” The answer (spoiler alert) in one word is: no! If something cannot go on forever, it won’t; the spending cannot go on forever, so it won’t. America today is only 2-3 years from the point-of-no-return, from which no nation ever has escaped without grave harm.

          The USA will blow past the point-of-no-return because there is no constituency for action and there won’t be until the crisis affects people’s daily lives. Politically, there is no incentive, and in fact there is a strong disincentive, to act absent a manifest crisis. When the crisis arrives, government initially will take only quarter-measures and it will be far too little, far too late. We simply have dug the spending, debt and deficit hole too deep; but instead of beginning to fill in the hole or even to stop digging, we blithely continue to dig the hole ever deeper, oblivious to the consequences.

         The most likely initial government response to the crisis will be to hold short-term interest rates at or near zero – and perhaps even negative. If the interest rate is ultra low, the amount of debt theoretically is unlimited. However, although the Fed exerts strong control over short-term rates, they don’t have similar control over long-term rates. Alternatively, the Fed can simply buy an unlimited amount of debt in a massive quantitative easing process. Neither of these actions is without consequence and at some point everyone will know that the emperor has no clothes.

Comments from Reviewers

        Three highly knowledgeable people, to whom I am grateful, reviewed this series. No one disputed the data or the analysis. Most were less pessimistic about the final outcome, although they didn’t present solutions; one wrote, “Things are never as good or as bad as they at first seem; the sky is not falling – it never does.” Another wrote, “As long as (people) continue to invest in our Treasury debt, the crisis will not happen. The point-of-no-return comes when no one will invest.” All the reviewers noted that, despite everything, we are better off than in the past and than most other countries.

         One reviewer suggested we might be able to reduce the debt to acceptable levels, over many years, by a combination of inflation and weakening the dollar such that foreign holders of our debt absorb most of the pain. Officially, foreigners hold only 39% of the debt, but this reviewer believes the real number is higher as some foreigners mask their ownership. However, this reviewer acknowledges this tactic can only succeed if the US gets its budget into balance; otherwise, it doesn’t matter.

Two Dimensions to Crisis: Excess Debt and Balancing the Budget

        There are two distinct dimensions to the spending crisis. First, we must purge the system of all excess debt to return the debt/GDP ratio to an acceptable level. Second, we must get our spending under control and balance our budget. Even if aliens from another galaxy showed up and miraculously repaid our national debt, we would be right back in the same position unless we got our budget into reasonable balance.

        Timing: When Will the Crisis Begin?

         The most frequent questions I get are about timing. The short answer is that there is no way to know. No bell goes off when the crisis begins; no bell went off in Japan or Greece; at first, the crisis may seem transitory. I can make a credible argument that the crisis already may have begun given the ultra low interest rates. In all of recorded history (since 3000 BCE) there never before have been zero or negative interest rates.

        The best answer I can muster is the crisis will be in full bloom when the ratio is 125% to 150%. But it could happen much sooner; once markets see where things are headed, it isn’t necessary to wait until they get there. It also could happen much later. I recall Adam Smith’s admonition, “Be assured, that there is a great deal of ruin in a nation“. By that, Smith meant it requires much to completely ruin a nation, which can survive mistakes, stupidity and disastrous policies far longer than is assumed.


Concluding Thoughts

            The spending crisis has many moving parts and it is easy to get overwhelmed by the data. Fundamentally however, it is simple. The US has spent and borrowed too much in relation to the size of its economy. It is rapidly approaching a hard and fast tipping point (90%) determined by the inexorable laws of mathematical compounding and from which no nation ever has escaped without great pain and a lost generation.

           By the time the crisis is manifest, the budget gap will be over $1.5 trillion per year, or 30%, amidst punishing demographic forces. There is no realistic way to bridge that gap. Perhaps, catastrophe can be postponed or ameliorated with extreme financial repression – which in itself will put America in crisis; moreover, it won’t permanently solve the fundamental problem. Ultimately, all excess debt must be purged and the budget brought into some semblance of balance. There is no other way out!

       Charles Murray, one of the titans of our time, recently said, “The American experiment in self-government is essentially over“. I fear he is correct, as America in 2019 panders to people’s fears and prejudices, while it ignores existential threats. The spending crisis, which will cost America a lost generation, was eminently foreseeable and preventable. It is at root a moral crisis because we lacked the will to act.

          We chose to take from our children and grandchildren rather than to control our own spending. To make matters even worse, the money we stole was not put to good use. Instead of borrowing to save our nation from calamity (as in World War II), we stole the money from future generations to finance a perpetual New Year’s Eve party.

Note: Email us with questions or comments. We may publish a follow up post in a few weeks with reader questions. We also are open to publishing other viewpoints; if you are interested, email us for guidelines. We will continue to publish regular updates about the spending crisis.

Next up: MLLG’s Complete Principles of American Politics

Spending Crisis – Part III

Possible solutions: grow, cut, tax, inflate, repress, restructure, repudiate, seize, MMT
Spending Crisis – Part III
Possible Solutions to Spending Crisis
By: George Noga – May 12, 2019

           This is the third of four posts in our Spending Crisis series, which is available in its entirety at There are many theoretical ways a spending crisis could be averted; we could grow, cut, tax, inflate, repress, restructure, repudiate, seize, or MMT our way out. More likely, we will employ a combination of these measures.

          Grow: There once was a time, as recently as 5-10 years ago, where growth was a possibility: no longer. There is no way the economy can grow at a faster rate than the debt, which currently is growing by 5.25% and increasing to 8.00% by 2025.

         Cut (Spending): FY 2019-2020 spending will be about $4.7 trillion with a deficit of $1.1 trillion. To balance the budget requires spending cuts of 23.4% but, by the time an impending crisis gets Congress’s attention, cuts of 30% will be necessary. Social Security, Medicare, Medicaid, pensions and defense would have to be savaged to such an extent as to sow the seeds of civil unrest. Moreover, the cuts would have to remain in effect for 15 straight years just to get back to today’s 78% debt ratio.

       Tax: Balancing the budget will require a 36% tax increase. Even if possible, it would be self defeating, as sky-high taxes would lead to economic stagnation. Note: tax hikes are a higher percentage than spending cuts due to starting from a lower base.

        Inflate: Inflation is the cruelest tax of all and devastates everyone’s plans, hopes and dreams. Just to cut the debt in half requires 10 years of 7.5% inflation provided the deficit is not increasing during that same time. Realistically, it would require 20%  inflation for ten or more consecutive years just to maintain the status quo.

       Repress: Repression is government action that insidiously transfers wealth from the private to the public sector to facilitate financing massive public debt. It includes: (1) low or negative interest rates; (2) war on cash; (3) currency/capital controls; and (4) bail-ins. We already have repression; it will get much worse as the crisis approaches.   See our post of November 11, 2018, devoted entirely to financial repression.

       Restructure: Debt restructure likely will be part of the government crisis response. It takes many forms including: (1) lengthening maturities; (2) requiring roll-over; (3) imposing haircuts; (4) lowering interest rates; and (5) conversion to other securities.

       Repudiate: Nations that have repudiated are unable to borrow again for decades. Any repudiation would be perpetually tied up in courts and would decimate the savings of ordinary Americans who own government debt, directly or indirectly, in money market accounts, pensions and annuities. A direct repudiation is unlikely.

       Seize: When crisis hits, there will be $25 trillion of IRA, 401(k) and pension assets; government could seize some or all such assets in exchange for government pensions. In recent years, Poland, Hungary, Bulgaria, Ireland and France have, through one artifice or another, seized money from pension assets. Government, like Willie Sutton, will go where the money is and that place is pensions.

         Modern Monetary Theory: MMT has been around for a while but recently has been embraced by the democratic socialist crowd as a justification for unlimited spending. MMT asserts that a sovereign government that issues debt in its own currency, has flexible exchange rates and controls its central bank can spend without limit or constraint. With MMT, the state simply creates unlimited amounts of money.

Combination of Most of the Above

          Just to stabilize (not to fix) the ratio requires $1.25 to $1.50 trillion per year from the above sources for up to 15 years. In the early stages of the crisis, a panicky government will: (1) enact VAT and/or carbon taxes; (2) make modest spending cuts; (3) increase repression; and (4) tweak Social Security and entitlements. It will be too little, too late; at most, it could slow the progression of the crisis for a few years.

          In the advanced stages of the crisis anything is possible including: (1) massive tax increases; (2) hyperinflation; (3) severe financial repression including negative interest and currency/capital controls; (4) debt restructure; and (5) reliance on MMT to create unlimited amounts of money. When the crisis reaches the desperation stage, I would not rule out government seizure of most or all IRA, 401(k) and pension assets.

        Our final post in this series (next week) addresses the ultimate question of whether or not a spending crisis catastrophe can be averted. Don’t miss it.

Spending Crisis – Part II

Official government data are frightening – despite being wildly optimistic.
Spending Crisis – Part II
Analyzing the Data
By: George Noga – May 5, 2019

       This is the second of four posts on the spending crisis. The entire series is available on our website: Parts III and IV will be distributed on May 12 and 19 respectively. We begin with some data. The current public debt to GDP ratio is 78% and is increasing rapidly. GDP has been growing at 2.5% (with no recessions); we assume it continues to grow at 2.5% in the future, but at a net rate of 2.0% after taking into account the inevitable periodic recessions. The debt is now growing at 5.25%; we assume it grows at 6% until 2025, 8% to 2028 and 10% thereafter – again net of recessions. This assumption is consistent with projected deficits and demographics. These are conservative assumptions and actual results are likely to be worse.

          Based on the assumptions supra, the US will exceed a 90% ratio in 2022 and a 100% ratio in 2025. After 2025 it gets really ugly, with the ratio approaching 150% by 2030. Social Security is now devouring its reserves, Medicare exceeds its funding in a few years and interest on the debt skyrockets. Deficits will average $1.5 trillion over the coming decade. The deficit easily will exceed $2 trillion during the next recession and it would not be shocking for it to be as high as $2.5 trillion, or even $3.0 trillion.

          The really bad news is that the above data (mostly from government sources) are wildly optimistic. For example, CBO projected in 2018 that the deficit would not go above $1 trillion until 2022, but now is expected to exceed that in FY 2019-2020. CBO is touted as being non-political, but it really isn’t; it is required to follow the rules established by Congress. Hence, CBO is severely constrained and its data are neither objective nor accurate. MLLG’s data have proven to be far more accurate.

Caution: Don’t get hung up on the source of the numbers or the specific timing. There is no significant difference whether you use CBO, MLLG or other data; they all lead to the same ultimate outcome, only the timing differs slightly

Significance of a 90% Public Debt to GDP Ratio

          The 90% ratio is not arbitrarily plucked from the ether. Governments have been borrowing money for 600 years and there is no example of recovery from a 90% ratio without social and economic upheaval, usually accompanied by a lost generation until excess debt is purged. The 90% ratio is valid because beyond 90% the mathematics of interest and compounding results in an economic death spiral. Note: The World Bank asserts the tipping point is reached at 77%, which the US already has exceeded.

          The crisis doesn’t begin on cue when the debt ratio hits 90%; that just represents the point-of-no-return. The crisis may not begin until years later when the ratio reaches 125%, or even higher. The 90% ratio is analogous to Titanic hitting the iceberg. The ship remained afloat for quite some time after the iceberg encounter and no crisis was immediately evident to passengers. Nonetheless, the moment Titanic hit the iceberg its fate was irreversible as is a nation’s fate once its debt exceeds 90% of its GDP.

The Mathematics of a 100% Public Debt to GDP Ratio

          When GDP and the debt are equal, i.e. the ratio is 100%, it is much easier to grasp the mathematics of the death spiral. At a 100% ratio, the economy (GDP) must grow as fast as the debt to prevent a meltdown. Herein we assume that GDP grows at a sustained 2% rate net of recessions and in 2025 debt grows at 8%. The differential between the growth of the economy and the debt is then 6% per year; debt grows $2.0 trillion while GDP grows $400 billion. The annual addition to the debt now is up to $2.0 trillion and increasing; soon thereafter, the debt reaches critical mass.

           Clearly, our debt is growing at a much faster rate than our means to discharge it. This is readily apparent to creditors who are likely to demand much higher interest rates. If interest on the debt simply reverted to its historic level of a composite 6%, it would amount to $1.5 trillion a year in 2025, equal to about 25% of the budget. Long before America reaches that point, the spending crisis will be in full bloom.

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Next on May 12th – Part III: Possible solutions to the spending crisis.

Spending Crisis – Part I

At root, the spending crisis is moral rather than economic.
Spending Crisis – Part I
Introduction and Background

By: George Noga – April 28, 2019

           This is the first post in our series about the spending crisis. It is a spending crisis and not a debt or deficit crisis because it is the spending that drives both the debt and deficits. It is a moral rather than an economic crisis because preventing the crisis requires only summoning the national will to control spending. It is about who we are as a people, what kind of country we bequeath to our children and our national security and survival. I have marshalled all the facts, logic and wordsmithery I possess to explain this crisis in an objective and non-political manner.

Our series is in four parts. Part II, Analyzing the Data, will be distributed May 5, Part III, Possible Solutions, on May 12, and Part IV, Can Catastrophe Be Averted?, on May 19. The full series is now on our website The series was reviewed in advance by three experts with diverse viewpoints. I carefully considered all their feedback, incorporated much of it and offered to publish any dissenting opinions.

         In addition to my MBA, CPA background, I have studied economics for 50 years. I devoted much of one summer in Montana to constructing a quantitative model of the US economy, including the deficit, which has proven to be highly accurate. I have been writing about the crisis of spending, debt and deficits for over a decade.

Background Information

         US GDP now is $21.0 trillion; the public debt is $16.3 trillion, while the total debt is $22.2 trillion. This results in a public debt to GDP ratio of 77.6% and a total debt to GDP ratio of 105.7%. The $5.9 trillion difference between the total debt and the public debt consists of intragovernmental debt, which mostly is money owed to Social Security and, to a lesser extent, to FHA and other agencies. For example, when Treasury spent the Social Security surplus, it issued special non-negotiable bonds.

        Throughout this series we use the public debt ratio and not the total debt ratio because intragovernmental debt is notional, with interest accrued and not paid in cash. It is analogous to writing yourself an IOU. Most who cite the higher total debt ratio do so out of ignorance or as a scare tactic. However, there are some credible sources who believe total debt is more relevant than public debt. If they are right, our debt ratio is 105.7% and not 77.6% and America is much worse off than described in this series.

           There are some who minimize the seriousness of the current ratio because it was higher (115%) in the aftermath of WWII (the only time prior to 2009 it was above 50%) and America easily recovered. However, the WWII deficit saved America from totalitarianism and was transitory. Afterward, war expenses ceased, Social Security ran surpluses, Medicare didn’t exist and demographics were favorable. Now, the deficit is structural; Social Security, Medicare and pensions run huge deficits and demographics are bleak. We are in the tenth year of an economic expansion and growth is 3%; yet, the FY 2019-2020 deficit will be $1.1 trillion and increasing each year thereafter.

       It must be noted that many states, counties and cities also are in serious debt trouble and will, at some point, require federal government bailouts. Private debt is hovering at an all-time high. The world debt to GWP (Gross World Product) ratio currently is 84% and spiraling upward. Global debt (public and private) is $230 trillion and is over 300% of GWP. Although these issues are beyond the scope of this spending crisis series, they deserve at least some recognition.

          We close with some examples that seem to defy expectations. Japan’s debt ratio is 250%, but dedicated pension assets lower the effective ratio to 110%. The NIKKEI index is down 46% from 1989 and economic growth is 1% amidst chronic deflation. Greece’s ratio hit 180%; it avoided default due to its small size and bailout by the EU. It’s economy contracted, pensions were halved and there was social and political upheaval. Italy, with a 130% ratio, is following in Greece’s tracks. Even though they avoided default, Japan, Greece and Italy did not escape the consequences of massive debt; they all have suffered lost generations and their crises are far from resolved.

Next on May 5th is Part II of our series about the spending crisis.

Earth Day 2019: Print This Email!

Fight back against paternalistic, proselytizing, political preening.
Earth Day 2019: Print This Email!
By: George Noga – April 21, 2019

        “Please consider the environment before printing this email” is a common liberal animadversion appended to personal and business emails; it is wrong for four reasons: (1) it gratuitously injects politics into a non political situation; (2) the sender is clueless that it is a divisive political statement; (3) it is virtue signaling; and (4) it is factually wrong as printing does not harm the environment, but actually helps save our forests.

      Progressives would (rightfully) take umbrage if emails were appended with: “Please consider adoption before abortion”. It is even worse when businesses make political statements. Why would businesses, which would not deign to hector you about contentious political issues, arrogantly foist their ersatz environmental views about paper products on customers? You can and should push back. When I receive an offending personal email, I attach the following subscript to my reply.

         Please print this email. Trees are a farmed product grown expressly for paper. It makes no more sense to conserve paper to save trees than it makes to conserve cloth to save cotton. Paper is natural, biodegradable, organic, renewable and sustainable. Working forests employ millions of Americans and help the environment by providing clean air and water, wildlife habitat and carbon storage. There are more trees planted commercially each year than are consumed; there are more trees than 100 years ago. Failure to print hastens the conversion of forests into strip malls and parking lots.

         When I receive an offending business email, I append the preceding paragraph but also let them know that I resent their presumptive and unwanted intrusion into my personal life by injecting politics into a business relationship. I usually couple this with a demand that they remove my name from all their lists. When I receive responses from businesses, they claim they weren’t being political; they arrogantly and ignorantly believe there is universal agreement that conserving paper helps the environment. Well, if that were true, then what is their purpose in adding it to all their emails?

Tree Glut Causes Humongous Price Drop


         In the southeast US timber growing region, there is a veritable glut of trees which has driven prices down 50% to 70% and is causing growers steep losses. The volume of southern yellow pine (used for paper) has quadrupled in recent decades as many farmers replaced cropland with trees. In total, 2.2 million acres were replaced. Prices now are so low that it sometimes isn’t worth the cost to harvest trees. Somehow, this surfeit of trees, decades in the making, has eluded progressive tree huggers.

      Actually, I fully agree with the environmentalists’ admonition to “consider the environment before printing“. However, they (surprise) got it backwards. By all means, you should consider the environment – and then go right ahead and print all you want, the more the better. By printing, you can take great satisfaction in knowing you are doing your part to help the environment and to save our great American forests.

Next on April 28 MLLG begins its new series about the spending crisis;
This is by far our most thorough and analytic presentation of this issue!