(ThyBlackMan.com) With a 14.2% national unemployment rate, (https://www.thebalance.com/what-is-the-real-unemployment-rate-3306198) at our door step, a black unemployment rate of 19.5%, millions of American workers facing permanent job losses, a relief bill stalled in Congress, evictions taking place, and more looming, and a highly contested presidential election, we can take solace or comfort, in the knowledge, the United States, the nation we call home, is the largest and number one economy in the world. We live in the wealthiest nation, in modern history.
Having the above knowledge, we as a people can face and solve any problem, as we aren’t without resources, if we seek clarity and understanding, when it comes to facts. Here is what we know factually; we’re dealing with a pandemic, and an economic meltdown. Our nation is in the worst Economic Downturn, since the Great Depression. Twenty three million of us, or more are unemployed, out of an estimated national labor force of 163 million workers.
There are competing visions, as to how to fix this problem. We shouldn’t deceive ourselves, nor be deceived. We should rely on concepts, which clearly work; ideas based on facts. As an example, when it comes to COVID-19, we know, wearing masks and distancing ourselves at least 6 feet, and avoidance of large gatherings decreases the spread of the virus. We know this, because we have factual information to prove, this approach to fighting COVID-19 has worked, in New York city and nations around the world. The reason this approach works, is because we now understand the character of the virus and how it is spread from person to person.
Well, when it comes to our economic meltdown, as loyal Democrats, who want to see Mr. Trump defeated, we shouldn’t lower our standards, when it comes to processing information, in our dogged search, for a doable solution to this economic crisis. It is in our best interest, just as in the example above, when it comes to COVID-19, we base this search on facts. We want the right solution, because there is so much at stake. Beyond the evictions and job losses, we are seeing millions of us face food insecurity for the first time, as lines at food banks in cities, across the wealthiest nation in the world stretch for blocks.
The Federal Reserve (Fed) has studied the character and nature of this Economic Downturn, enabling us to understand its cause. Just as the medical experts are to COVID-19, the Federal Reserve is to the economy. They give us factually based information on our sick economy. The study states, according to a recent Bloomberg News article, “….A new Federal Reserve study squarely pins the blame (cause of this Economic Downturn), on a collapse in demand, as consumers sheltered in home to avoid infection.” The exact wording, in the Fed’s conclusion in that study, dated August 24, 2020, states, “ …Current data show that the recent drop in core PCE (personal consumption expenditures)” …. is mainly attributable to large declines in consumer demand for goods and services stemming from COVID-19.”
So, here we are, faced with the result, of the needless loss of thousands of lives, because the Trump administration ignored the advice of medical experts. The Democratic Party, which aspires to be the party of working people, however, is now facing its moment of truth, given the above factual information, from the Fed. Will they as well, ignore the findings of experts? As with COVID-19, there is also, a clear and proven solution. This solution will increase, lost “consumer demand for goods and services,” which is blamed for this Downturn, and will bring this Economic Downturn to an end.
Increasing consumer demand, is directly linked to increasing consumer spending. The severe disruptions of communal and other activities, caused by COVID-19, sharply reduced consumer spending. The reduction in consumer spending throughout our economy, has created the lost of millions of jobs, through massive lay-offs.
Consumer spending, which is responsible for 70% of our economic activity, when it comes to creating jobs, is what makes our free market economy work. The truth is, there’s no greater economic engine in the world, than U.S. Consumer Spending. It’s a proven fact, consumer spending, made the United States the #1 and largest economy in the world. Therefore, it’s a fact, if you increase consumer spending, you will shorten enormously, or end this Economic Downturn altogether. A new American economy, for our families and the next generation, can be built through restoring the lost consumer spending, due to the virus, with a 10%, $25,000 Consumer Tax Cut.
Baby Boomers, who are retiring at a rate of 10,000 a day, will be the target of the Tax Cut, are responsible for close to 40% of all consumer spending (consumption), nationally. Baby Boomers also, include an equitable number of blacks, as beneficiaries. A 10%, $25,000 Consumer Tax Cut, will drop $254 to $300 million a day into our economy, for businesses, both large and small to compete for, over the next 10 years, which would be the duration of the Tax Cut. This will bring back, by the millions, the jobs lost in the pandemic. The cost of the Tax Cut, would be less than the $1.5 trillion cost of the Trump Tax Cut, which was legislated to last for the same period of time, 10 years.
If Speaker Pelosi put the 10%, $25,000 Consumer Tax Cut on the floor for a vote, as outlined in the book, “The Fix This Time,” it will pass, in the House and Senate. The reason the legislation will pass, is because of the stakeholders. One stakeholder is the most consistent voting block in this nation; 68 million Baby Boomers! If you calculate, an additional 23 million unemployed Americans, and their families as stakeholders, you’re closing in on 100 million voters.
Additionally, the concept of giving consumers a Tax Cut of this magnitude is factually based, as consumers have proven historically through spending, they are the engine that drives our free market economy. Without consumer spending, we are experiencing in real time, as we look around, the results, which are lay-offs, evictions, and the crushing decline of our nation, economically. There will be no additional bureaucracy added either, in activating the Tax Cut, as we have already seen, due to the $1200 stimulus checks, the Tax Cut can be efficiently distributed through the Social Security system, giving that agency a lift.
Finally, there is a nagging question, many of you are probably asking and that question is, “I understand and see how it will boost job creation, as the Baby Boomers will do okay, as they spend their $25,000 Tax Cut stimulus checks, but what about me, as a member of the next generation, what’s in it for me, besides a job?”
The Tax Cut is designed to last for ten years, and include all Boomers. However, Congress, if prompted by voters, will extend the Tax Cut to the next generation of retirees. Thus, this “Direct” Consumer Tax Cut, is an opportunity for one generation, the Baby Boomers (1946-1964), to leave a legacy of reformation to America’s capitalist system, that will benefit and be felt financially, by future generations: Generation X (1965-1980); Millennials (1981-1996); and even Generation Z (1997-2012).
So, will Biden, Speaker Pelosi and the Democratic Party listen to the experts? Nothing less, then the financial security of working families hang, in the balance.
Staff Writer; James Davis
Mr. Davis is a leading expert and consultant in Financial Analysis and Social Dynamics. He is a graduate of Florida A. and M. University (FAMU), a former stockbroker, and a human rights activist who resides in Sanford, Florida. He was awarded the prestigious Governor Haydon Burns Scholarship to attend FAMU and while at FAMU was awarded the first Martin Luther King Scholarship. He is the author of three books, among them is “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M).
Mr. Davis can be reached through his blog @ https://thefixthistime.com.