(ThyBlackMan.com) If Democrats fail to grow our economy and jobs, they will lose the House and the Senate in the midterm elections, in 2022. On the other hand, if they succeed, voters will, no doubt, reward them by expanding their majorities in both Houses of Congress, allowing them to pursue their progressive agenda. There are reasons, we needlessly suffer or are downright victimized, racially, and economically, as we navigate, what is called a constitutional democracy, which is the United States. One of those, not so insignificant reasons is, elected officials, such as those that sit in Congress and in the White House do not adhere to data or material facts, when it comes to matters of public discourse.
Former President Trump’s policy of non-adherence to data, and facts in regard to wearing masks, and social distancing of six feet in curbing the spread of COVID-19 is, an example of such poor decision making. Needless to say, his approach of bringing the virus under control cost lives, as many followed his example in not wearing a mask and properly social distancing, causing the virus to spread. He even held events, in which he was a participant, that were considered super-spreader events. We can reasonably say, because he did not embrace data and facts needed to bring the pandemic under control, he lost the presidency, and his political party, the Republicans, lost the Senate.
Now, we have a new President in Mr. Biden, who has said he will follow factual data, the science, and experts, in eradicating COVID-19. However, Mr. Biden and his advisers face a similar test, as Mr. Trump, but in a different area. His success and his party’s success depend on him making the right decisions, in following factual data, the science, and experts when it comes to the economy and job growth. Democrats, whether they believe it or not will not survive as the majority party, controlling the House of Representatives and Senate, if their coalition of working-class Americans, blacks, Progressives, intellectuals, and suburban voters feel they failed them, in the crucial task of job creation. Republicans, as the elections approach, will remind voters of President Biden and Democrats’ failure in this critical measurement.
Just as data was clear to Mr. Trump, when it came to the pandemic, data is just as clear, regarding the COVID-19 Economic Downturn, to Mr. Biden, when it comes to job creation and growing the economy. Will Mr. Biden having taken the presidency from Mr. Trump, because of his lack of adherence to data, turnaround, and make the same mistake?
Here is what we know when it comes to data, factually and statistically. The United States is a Consumer driven economy. It is the Consumer and Consumer Spending that is responsible for the creation of approximately 70% of the jobs in our economy. To demonstrate that fact, when we examine “The Cares Act,” the single largest relief bill in the history of the nation, signed into law on March 27, 2020, we find at least 75-80% of the money legislated, went to enhancing Consumer Spending in one form or another.
1) Of $2.3 trillion, legislated by, The Cares Act, direct payments to the consumer in the form of tax cuts of $1200 per adult, $500 per child went to households making up to $75,000. This direct spending by consumers stabilized and added to the stock of existing jobs.
2) $484 billion went indirectly to the consumer through the Payroll Protection Program. Additionally, loans and grants amounting to $367 billion, were extended to businesses large and small to keep the consumer employed, on the payroll and spending money in the economy. For those laid-off, the expansion of unemployment benefits included people furloughed, gig workers, and freelancers. Benefits to the unemployed were increased.
Consumer Spending, as a result of The Cares Act (stimulus) tax cuts, was a major contributor in the rate of unemployment dropping from 14.7% in May 2020 to 6.7% in November. As the economy reopened in May with 2.5 million jobs, strong Consumer Spending enhanced the recovery. The Cares Act (stimulus) tax cuts created demand for products, and services, which lasted for approximately eight months, as Consumer Spending slipped and fell in November and December of 2020, which was an indication the COVID-19 Economic Downturn is deeper and more severe than originally thought.
Federal Reserve Chairman Jerome Powell stated, at the Federal Reserve Open Market Committee news conference on January 27, 2021, “The real unemployment rate is close to 10 percent (for December) if you include people that have left the labor force,” and not the 6.7% advertised by the Trump administration, as the official unemployment rate. He further stated, in that news conference, “Something like 9 million people remain unemployed and that is, as many people, as lost their jobs at the peak of the global financial crisis, in the Great Recession.”
Biden unveiled a $1.9 trillion COVID-19 relief plan that would provide among other things, $1,400 checks for most Americans which on top of the $600 checks already being distributed would bring the total to $2,000 per adult. But it is obvious Democrats, and the nation can bank on SLOW ECONOMIC GROWTH, after these benefits are exhausted, just as politicians gear-up for the 2022 mid-term elections. These tax cuts, perhaps as much as $390 billion after being means tested, may drive an increase in Consumer Spending for only 8-10 months.
However, if Mr. Biden in his wisdom, would use our wealth to enact a 10%, $25,000 Consumer Tax Cut (stimulus), augmenting the COVID-19 relief plan, “THIS ECONOMIC DOWNTURN WILL BE BROUGHT TO ITS KNEES.” The tax cut (stimulus) would be comparable in time, 10 years, and in cost, to the $1.5 trillion Trump Tax Cut. Once, buying into Consumer Spending, as the driver of our economy, as so indicated by the above factual data, President Biden going forward, can be more strategic in spending $1.9 trillion. 40% of all Consumer Spending is driven by the 50 plus demographic, of which the Baby Boomer generation is the overwhelming majority. By laser focusing the 10%, $25,000 Consumer Tax Cut (stimulus) to a smaller group of consumers in volume, but homogeneous in makeup, increasing the amount to get the same spending impact, and spreading the distribution of $1.5 trillion over 10 years, President Biden intelligently, with great savvy, provides a grateful nation with its first Long-Term Data Driven Economic Growth and Job Creation Plan, through a Demand Side Tax Cut.
The incredible outcome of doing this is, Biden stays well within the parameters of the $1.9 trillion goal he has set, when it comes to spending, with $400 billion to spare (The Consumer Tax Cut Explained – Jobs and Their Creation (thefixthistime.com). He achieves his goal of bringing the nation together as Baby Boomers include rural whites, and minorities, from every corner of this great country. He touches some of the most less serviced areas in the nation in terms of job creation, as Baby Boomers across this nation, spend the benefits, providing approximately “$254 to $300 million “a day” or more” for businesses large and small to compete for, creating demand, as they retire at a rate of 10,000 plus per a day. He is able to lambast his critics, with irrefutable statistical data that supports this approach in spending, as consumption data show, that low- and middle-income Americans are more likely than higher earners to spend benefits from the government immediately and stimulate economic activity, creating millions of jobs. Finally, these not so unimportant achievements are realized, also; HE ENDS THE COVID-19 ECONOMIC DOWNTURN, RAPIDLY GROWS OUR ECONOMY AND SPREADS THE COST OVER 10 YEARS, leaving room for additional spending! All of this happens, of course, because, yes, Mr. Biden adhered to data!
The Tax Cut is designed to last for ten years and include all Boomers. However, Congress, if prompted by future 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).
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.