(ThyBlackMan.com) Working-Class Americans, and Black America are the “Biggest Losers,” in Biden’s version of Build Back Better, as economic growth and long-term job creation will invariably suffer, or be considerably SLOWED, as I will explain. Biden and Democrats, along with the Congressional Black Caucus (CBC) repeatedly tell us they are in the corner of working-class and Black America, and that’s questionable. The doubtfulness is reflected in their spending of some $2.0 trillion.
If you are genuine advocates of working-class Americans and Black America (Black America mentioned here, because they have the highest unemployment rate of any worker group at 14.3% and the lowest percentage rate of business ownership), you advance logical, and rational economic policies to make the lives of working-class Americans of all races, including blacks, better and more productive.
Probably, the best description of this country’s political intent and attitude, when it comes to its various constituencies is, what former President Abraham Lincoln said in 1863, in his Gettysburg Address, at the Gettysburg Battlefield in Pennsylvania. He said, “Four score, and seven years ago our fathers brought forth on this continent a new nation, conceived in liberty, and dedicated to the proposition that all men (and women) are created equal.”
Notice, he didn’t say, “we are all equal” in this nation. It is obvious, we are not equal based on the aforementioned black unemployment rate above, which is perpetually 5% to 6% higher than the real jobless rate, which is for October, 8.3%. But what he insightfully said, “the nation was conceived in liberty,” and, as the Commander and Chief in the Civil War, which he eventually won, the nation was actively “dedicating itself to this proposition,” of equality, by actually fighting and dying, to defend the concept of equality.
Frankly, I agree with Mr. Lincoln, especially when it comes to Black Americans. Black Americans today have “a seat at the table of power,” and it was in large part, due to the nation’s dedication, as a whole, to the proposition of equality. It could not have been done without a goodly number of this nation’s majority population’s mutual support, in war and in peace. Don’t get me wrong, nothing was handed to Black Americans. They died for, worked for, marched for, voted for, and in some instances even rioted for, the seat at the table. Nevertheless, the battle to have a voice in our future was done, for the most part, within the framework of this Constitutional Democracy, supported by the Bill of Rights, which I have personally used in marches and pickets.
So, now we find ourselves at an inflection point. We must question the Democratic Party, President Joe Biden, and the CBC, in regard to their dedication to economic policies, that will enhance the principles of liberty, which got all of us, to this juncture. There is nothing wrong in doing this. We do this willingly, with good will in our hearts, being advocates of our sons and daughters and others who are suffering due to the Economic Downturn caused by the pandemic.
We are seeing the Biden Administration’s economic policies, in response to getting our economy back on track, are not as good, as they could be. This is largely due to them, ignoring facts and DATA. Biden’s team has yet to set our economy on a predictable, DATA DRIVEN trajectory. Mr. Biden does not appear to be a champion of DATA. He undercounts the real jobless rates of the unemployed with impunity, giving the impression his official jobless rate, 4.6% for October, is a true reflection of our unemployment situation, and of course, it is not.
One of the lessons that Covid-19 and its variants taught us is how to create jobs and grow our American economy. However, it is based on facts, and DATA. Like the Goliath of all armies, Covid-19 struck, and our economy went into a dive, not seen since the Great Depression. A consensus was reached, we would spend our way out of this pandemic, using the Consumer and Consumer Spending.
And that is just what happened, the Federal Government fed the Consumer money through several Tax Cuts. One of the largest of those Consumer Tax Cuts was to the Families with Children. Here are the facts in regard to the current Consumer Tax Cut to Families with Children and its cost. Using Democrats’ figures, roughly $15 billion monthly in TAX CUTS started going out with 170 days left in this year, as the Tax Cut to Families programs got underway in July and is scheduled to end on December 31st. It resulted in $529 million a day being given to and spent by consumers, every day, on average.
This is something the Biden administration got right; he gave America its first acknowledged Consumer Tax Cut. Remarkably, it appears, some officials within the administration and in Congress did not realize what they had carried out, as they kept calling what was clearly a Direct Consumer Tax Cut, a “Tax Credit.” Nevertheless, the Consumer Tax Cut predictably did its job. Consumer Spending is working efficiently when it comes to creating jobs. It is no longer theoretical. Consumer Spending contributed to the creation of 1.091 million jobs in July, 483,000 in August, (in spite of the onset of the Delta variant), and created 312,000 jobs in September, as many experts attested to the cresting of the effects of the variant, as fewer workers were sidelined in mid-September, as cases climaxed.
And this month’s unemployment situation report shows, Consumer Spending contributed to the creation of 531,000 jobs, in October. There is no denying the consistency of Consumer Spending in growing our economy. It is being affirmed, that which Consumption DATA shows. Consumption DATA shows, low-and middle-income Americans are more likely than wealthy earners to spend benefits, from the government immediately, and stimulate economic growth, creating millions of jobs. We have a multi-faceted economy, yet there is agreement among economists that the United States is a consumer driven economy, as consumers and Consumer Spending are approximately 70% of the fuel that makes our economy work.
Therefore, being a consumer driven economy, when the Consumer Spends, our economy grows. Handing a direct Tax Cut to Families with Children is a clear illustration of DATA in action. In this spending package under consideration, Democrats have the means, and the money, an estimated $2.0 trillion, to achieve the task of continuing to grow our economy, and jobs on a long-term basis. There is no question, a legitimately growing economy will produce surpluses, and a means to pay for popular, and 3rd Party Programs, even some that produce deficits.
However, the Tax Cut to Families with Children is flawed as a long-term job creator. Interest rates are a blunt tool. When the Federal Reserve uses rate increases to control inflation, it affects the entire economy. The beneficiaries of the Tax Cut to Families with Children are prone to be laid-off like all other workers. Layoffs will reduce the effectiveness of the Tax Cut to Families with Children when it comes to job creation, due to a loss of income to the recipients, as a result of them being laid-off from their jobs. This will lead to a reduction in consumer spending, which will reduce economic growth, and usher in “a SLOW GROWTH ECONOMY, which will hurt working-class and Black Americans.”
The Tax Cut to Families with Children, which cost approximately $180 billion on an annual basis; Biden can shift that money to a more resilient demographic, which do not have the problems listed above, and continue our economic expansion and job growth. That demographic is the Baby Boomer generation. He can finance the first year of the Baby Boomer Tax Cut. Because the Boomer Tax Cut was designed to start in 2021, he would have to finance 2021, and 2022, with Tax Cuts going out the door, beginning in January of 2022, which would result in approximately the same amount of money, $529 million a day hitting the economy.
Baby Boomers, as a homogeneous group, who are retiring at a rate of 10,000 a day, is statistically the best target of the consumer tax cut. When it comes to daily interest rates increases, Baby Boomers are not affected, because they are for the most part retired. Thus, they are able to continuously spend benefits from the federal government, consistently sustaining job creation, and growing the economy at the same current rate, as the Federal Reserve incrementally raises rates to control inflation.
Additionally, DATA shows, they are responsible for close to 40% of all Consumer Spending. That means they will “widely spend the benefits from the federal government,” sustaining Job Creation across our nation. Baby Boomers also, include a fair number of minorities and rural whites, who will be touched by this Tax Cut. 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 is the duration of the tax cut. This $1.5 trillion Consumer Tax Cut Plan, (https://thefixthistime.com/the-10-25000-consumer-tax-cut-explained) as a result of Consumer Spending, will continue to consistently create jobs at a hefty rate and expand our economy.
Democrats should be looking ahead, knowing the success of the Clinton administration’s use of Consumer Spending, as a result of a similar Tax Cut to Consumers. Democrats should be preparing themselves for the REAL battle AHEAD, which Gore lost to Bush, WHEN IT CAME TO, HOW TO SPEND THE SURPLUSES? Once, this round of the Consumer Tax Cut is in the right vehicle to make it successful, Democrats can start preparing arguments to defend these programs, rather than see the surpluses go to the wealthy, billionaires, and corporations. We know their political talking point, and it was successful. That argument is, when there are surpluses, this money should go back to those who pay the most.
There is nothing wrong with good 3rd Party Programs. There is nothing wrong, with the CBC competing for HBCU’s, and there is nothing wrong with Progressives wanting to see the Tax Cut to Families with Children extended; that’s why creating a long lasting and long-term foundation, or platform, for these and future programs to grow, makes the practical use of facts and the practical use of DATA, so important.
American Voters, working-class, and Black Americans want to feel assured, the Democratic Party’s long-term job creation plan is solid, will work, and do what it is supposed to do, grow the economy, and create jobs, on a long-term basis. You see, any other outcome, will not in any way, “Measure-up” to working in the best interest, of these constituencies and their communities.
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.