(ThyBlackMan.com) That title could easily be Joe Biden’s legacy as he ends the fourth year of his presidency. Many prognosticators see the issues facing President Joe Biden as insoluble conundrums. Domestically Biden faces the issues, of Covid-19, a recalcitrant ex-president who will no doubt use whatever political power he has to question his policies, a divided Democratic Party, government and nation, the expectations of his coalition partners who got him elected, the greatest Economic Downturn, since the Great Depression, the exportation of jobs to China, Chinese trade issues, and economic growth.
However, Divine Providence has smiled on this incoming president and his team. The solutions to some of the most critical challenges of his presidency are within his reach. The eyes of the nation and indeed the world are upon him. The hopes and prayers of working-class Americans, Black America, rural whites, those in the suburbs, and cities are with him. Will he have the courage to reach out and embrace the following solutions?
It has been said that he is a decent man. The word, “decent” denotes a man of integrity and moral character. But courage is another matter. It takes courage to embrace new solutions to achieve goals for the better good of the nation, especially when others doubt. Achieving structural change, in the face of doubters, often starts with telling the truth. As if in agreement, Biden in a recent Thanksgiving eve address said, “Americans deserve “to always hear the truth” from the president.”
A Consumer (Demand Side) Tax Cut will End this Economic Downturn
The truth is, the turmoil, inequity, and distress we are experiencing in our nation today can be reversed, with the enactment of a 10%, $25,000 Consumer Tax Cut. Our nation can be transformed economically, with a Demand Side Tax Cut.
Dr. Heather Booshey, who has been selected to sit on the Council of Economic Advisors, by President Biden acknowledges in an article titled, “The Corona virus Recession and Economic Inequality: A Roadmap to Recovery and Long-Term Structural Change,” “Research finds that even in the best of times, tax cuts favor the wealthy and are not stimulative because rich households just preserve their wealth and income rather than deploying it in an economy that is 70-percent powered by consumer spending.”
But, when you take her narrative to the next level, and ask the obvious question of what would low- and middle-income Americans do with a Direct Consumer (Demand Side) Tax Cut, you reach a remarkably different conclusion, in regard to spending. Consumption data show low- and middle-income Americans are more likely than wealthy earners to spend benefits, from the government immediately and stimulate economic growth and create millions of jobs.
So, a Consumer Tax Cut, would complement, Mr. Biden’s and Democrats’ planned use of a combination of 3rd Party Programs, public spending, and TAX CREDITS, while growing GDP (gross domestic product). Once, the market style, data-based Consumer Tax Cut is enacted, consumer spending will be unleashed, creating streams of tax revenues at the federal, state, and local levels, which could be used by Biden at the federal level to pay for 3rd Party Programs and other projects, such as the Green New Deal. However, Mr. Biden must first, have the courage to embrace, what is a pragmatic economic solution to job growth.
Baby Boomers, as a homogeneous group, who are retiring at a rate of 10,000 a day, who will be the target of such a tax cut, are responsible for close to 40% of all consumer spending (consumption). Baby Boomers also, include rural whites and an equitable number of minorities. A 10%, $25,000 Consumer Tax Cut, will drop $254 to $300 million a day or more 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 $1.5 trillion or less, which is comparable to the cost of the Trump Tax Cut, which was legislated to last for the same period, 10 years. This pragmatic solution to grow the economy is doable. But, having the courage to embrace it, is another matter. (A Consumer Tax Cut is not on the Radar of Biden and Economic Adviser, Dr. Heather Booshey. : ThyBlackMan.com )
End the Practice of Under-counting the Unemployed, which Hurts all Workers, Particularly Black Americans
Courageously embracing the truth, also means abandoning President Clinton’s method of counting the unemployed, which understates the number of unemployed, which hurts all workers, but particularly black workers, because their rate of unemployment is always higher than the national rate. The nation’s employment situation has been politicized. Objectivity and who is measured, when it comes to being unemployed in the Bureau of Labor Statistics (BLS) reports, is the subject of much criticism. The truth matters, in the calculation of idle workers in our economy, who want to work.
To understand exactly what I mean, go to the following link at the BLS web site and see for yourself the range of “Alternative Measurements of Unemployment” (http://www.bls.gov/news.release/empsit.t15.htm). As you will see, there are six categories and depending on which category is used, presidential administrations can manipulate the “official” unemployment rate, for their own political purposes.
The Clinton administration chose to make the U-3 category as the official unemployment rate. When you read the description of who is measured, when it comes to the unemployed, U-3 is not extensive and leaves a lot to be desired. Most experts, who follow these numbers see the U-6 category as being the “Real Unemployment Rate” of the U.S. economy. Getting America back to work, means having the courage to get our unemployment rates right. (https://www.thebalance.com/what-is-the-real-unemployment-rate-3306198)
A China Trade Policy that Creates American Jobs
Mr. Biden said, while on the campaign trail, his administration will use $400 billion under his control as president to purchase goods and services from businesses and corporations in the United States. It is pretty apparent in his statement, he thinks working-class Americans are getting a raw deal, when it comes to the exportation of America’s consumer demand. In regard to deciding on the future of U.S. tariffs on China, Biden has said he wants to consult with America’s allies. However, whether he realizes it or not, Mr. Biden has already decided, on a strategy. In spending the $400 billion in the United States, he is in essence globalizing away from China and back to America.
Collectively globalizing away from China with other free market nations, is by far the best strategy, because it negates the need for inspections, and grappling with China when it comes to changing its behavior on issues like trading, intellectual property theft, human rights, Taiwan, and the South China Sea. As American businesses and corporations globalize away from China, the United States gains leverage in negotiations on issues it cares about, by reducing the fuel China needs to robustly grow its economy. Negotiating a better deal for working-class Americans can be an additional benefit, through increased exports to new trading markets.
Using the leverage of globalizing away from China begs the question of where the United States, Corporate America and its allies should globalize to, when sourcing labor. Africa has a population of 1.3 billion people, that is expected to double to 2.6 billion people by 2050, according to the United Nations Department of Economic and Social Affairs, Population Division, is an area worthy of consideration. It is composed of as many as 55 nations in various stages of economic development. The United States has proven its ability to advance nations economically using, American consumer demand. China is an example of that fact. However, the Truth, Integrity, and Courage Matter, when it comes to the Biden administration making this decision. ( What You Need to Know About the Trade War and the Label, Made in Africa! : ThyBlackMan.com )
Success in the areas above, is the glue that will bring the factions within the Democratic Party and the nation together. A 10%, $25,000 (Demand Side) Tax Cut is doable. There is no greater economic engine in the world than U.S. Consumer Spending which made us the #1 and largest economy in the world and is responsible for 70% of our nation’s jobs. Unprecedented times require great wisdom and understanding. Counting ALL the unemployed is simply the right thing to do. Finally, if we say China, as an authoritarian government, is indispensable to the success of Capitalism, then Capitalism, as an economic system, as we know it, is already doomed. As there is no historical reference, I am aware of, where American Capitalism and entrepreneurship, as practiced in the United States, has coexisted successfully, with an authoritarian form of governance.
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.
