Friday, June 18, 2021

Biden Should Go BIG with a “REAL” Job Creation Plan.

June 1, 2021 by  
Filed under Business, Money, News, Opinion, Politics, Weekly Columns

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( Investors are saying, while not blasting it across the cable channels, the U.S. economy, needs to grow. We need to increase the number of good paying jobs steadily and predictably over the long-term. However, many investors are thinking Biden is not really serious about growing the economy and are hedging their bets. More later when it comes to Biden’s seriousness regarding economic growth.

When some of you look at the Biden administration, you tend to think of race, and that is a mistake. Some of you look at the number of African Americans and other races in key positions and assume this administration is racially sensitive, meaning they are consciously attuned to the black community. Way too many of us equate a racially diverse roster of employees, to a racial equitable administration when it comes to political and economic policies, and that makes no sense. No one should use color as a standard, when judging the political bent of anyone, especially the members of the Biden administration.

Results, and not the racial make-up of the Biden administration is what will tell us what Mr. Biden and his presidency is about. What is relevant or irrelevant to him, eventually comes out in the wash, called our social, economic, and political reality, which we have to both deal and live with.  So, if we can, let us set aside the racial make-up of this administration and concentrate and focus on his economic policies, because at the end of the day, that is what really counts. You owe that to yourself.


Remember, pre-pandemic, Mr. Biden and the Democratic Party were a party that saw economic growth through the lens of “third-party programs.” Democrats doubled down on these programs, offering 45 of them in the run-up to the presidential election. 3rd party programs always involve a go-between, or a middleman, middle woman, who is there to determine, whether you qualify for the benefits of a federal program, such as housing assistance, the weatherization programs, or meals on wheels. This intermediary can rule you in or rule you out for whatever the benefits the programs offer, determine the amount, or how long you will receive such benefits. The negative of 3rd party programs is, they do not drive long-term economic growth. Thus, Democrats during the Obama administration were constantly accused of overseeing a slow growth economy, which was in part, responsible for the election of Donald Trump to the presidency.

Voters, Black Americans among them, realized, 50 years of such programs did not advance them economically. Then Covid-19 became our new reality. Because of the pandemic, and as a result of going through it, Democrats and Mr. Biden discovered, as the rest of us did also, consumer spending is the key to creating jobs. Nevertheless, it is hard for Biden and the Democratic Party to shake the addiction of third-party programs, which is a top-down approach relying on well-meaning politicians telling you what economic programs are best, rather than allowing consumer spending, which is a market driven, data-based plan of job growth to be their marquee or big-name initiative, when it comes to growing our economy. ( ).

Recent stock market activities around inflation suggest, in the projected spending of trillions of dollars, investors are fearful the Biden team is not going to get it right when it comes to a job creation plan. The probability of this administration’s chosen engines of economic growth, illustrated in the following paragraph, will not be successful is remarkably high, and for good reasons, as will be explained. The Biden administration is relying on tax credits and infrastructure programs as the engines to drive economic growth through consumer spending, while investing in third-party programs.

Specifically, they are using the Child Tax Credit, the Child and Dependent Care Credit and the Earned Income Tax Credit programs as the engines, to create consumer spending. Once these tax credits are applied against any federal taxes you owe, and if there is money left over, the Internal Revenue Service (IRS) will convert those credits to cash and send you this money by check or, deposit the money in your checking account. Starting with the 2021 tax year, all three programs offer this benefit. These programs are a part of the American Rescue Plan Act of 2021 signed into law on March 11, 2021, by President Biden to provide additional relief for individuals and businesses affected by the coronavirus pandemic.

It is a fact, 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, will the tax credits and the resulting tax cut checks these programs are offering be enough to stimulate long-term economic growth and create the millions of jobs the economy needs?

The jury is still out on this question, not because of the programs themselves, but because the Republican Party is not in agreement with Democrats when it comes to what many Republicans perceive, as an increase in welfare payments without any requirement to work. They state, “If made permanent, (these changes) would reverse the “Clinton-era” welfare reforms (where) conservatives-imposed work requirements for families to receive cash assistance.” Additionally, the Heritage Foundation in a commentary stated this according to the Balance; “The return to unconditional cash aid would undermine work and marriage in low-income communities and make it more difficult for children in those communities to climb the ladder of upward social mobility.”

Because the changes to these tax credit programs are in trouble, as President Biden seeks to make them permanent, there is a significant risk their impact will be muted when it comes to stimulating, economic growth and the creation of jobs. Without these programs driving consumer spending, Mr. Biden and Democrats are left with infrastructure spending and 3rd party programs, which take us back to a slow growth economy reminiscent of the economy, after the 2008 Great Recession. Surely, Mr. Biden and his economic team have to know, if the direct tax cut benefits (stimulus) of these programs are compromised which is highly likely, this puts the American economy on a perilous course, as the Federal Reserve after over twelve years of near 0% interest rates, may have to at some point in the near future raise interest rates due to possible inflation, which will result in even slower economic growth. We have learned, programs are fine, however it is the programs that generate direct tax cuts are the ones that grow consumer demand, creating jobs.

Here is where the seriousness of Mr. Biden becomes questionable when it comes to economic growth. Knowing the tax credit programs will not survive, without changes, or as presented, does he have a second JOB Creation Plan? It is not as if consumers cannot be given a tax cut in another way, which would facilitate consumer spending and grow jobs and our economy. However, such a job creation plan would have to be beneficial politically to both parties.  Having agreed, consumer spending, is the driver of our economy, as indicated by his use of tax credit programs, President Biden can be strategic. 40% of all consumer spending is actually driven by the 50 plus demographic, of which the Baby Boomer generation is the overwhelming majority.

By focusing a 10%, $25,000 Consumer Tax Cut (stimulus) to Baby Boomers, a homogeneous group in makeup, matching the amount of the stimulus or, tax cuts provided by the tax credit programs, and spreading the distribution of the cost, $1.5 trillion, over 10 years, President Biden will provide the first long-term data driven economic growth and, Job Creation Plan. It will be historic, as it will be this nation’s first Demand Side Tax Cut. By doing this, Biden achieves his goal of bringing the nation together as Baby Boomers include rural whites, which should appeal to Republicans. He’ll also touch some of the most less served rural areas, geographically in our 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” over the next 10 years for businesses large and small to compete forcreating demand, as they retire at a rate of 10,000 plus per a day (The Consumer Tax Cut Explained – Jobs and Their Creation (

Our economy is out of sync! A near 0% interest rate economy is not normal, the Federal Reserve purchases of over 50% of our debt through quantitative easing is worrisome, slow economic growth biting at our heels, can easily become our new normal and, Baby Boomers, who are responsible for 40% of our consumer demand are under tremendous financial stress, and need relief, during and, as they reach retirement. The solution: All four of these problems can be resolved with a 10% Consumer Tax Cut!

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 (

Mr. Davis can be reached through his blog @

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