(ThyBlackMan.com) Take the time, think about, and sort out the reason, JOBS are up, Unemployment is down, and Retail sales are up. It is due to Consumer Spending, due to a Consumer Tax Cut, to Families with Children.
Astutely OBSERVE, with your own eyes, “not a single shovel has gone into the ground,” due to Biden’s infrastructure bill, and Build Back Better has yet to pass the Senate. So, what is driving economic growth and Job Creation? We are growing OUR economy and creating JOBS, because of a Consumer Tax Cut, which is leading to Consumer Spending, which is creating millions of JOBS.
Republicans will have you believe, a Demand Side Economy (another name for a Consumer Economy) will create uncontrollable inflation (price increases), supply chain issues, and wages, small businesses cannot afford. But guess what else a Consumer Driven Economy surprisingly creates,
1) more JOBS, which leads to more choices for American workers,
2) historic record business openings last year,
3) long overdue wage increases,
and
4) decreasing unemployment rates. In comparison, we did not live in a Consumer Driven Economy during the Bush, Obama, and Trump administrations.
Would you like to know how this Consumer Driven Economy was created, so you might understand the coming issues of inflation versus JOB creation? The theory, the American economy is a Consumer Driven Economy is no longer theoretical. It is factual and is being confirmed every month when the U.S. Labor Department gives us our Job Situation, which shows consistent job creation and declining unemployment rates. We have a multi-faceted economy, yet there is agreement among economists, the United States is a Consumer Driven Economy, as Consumer Spending is approximately 70% of the fuel that makes our economy work. When consumers spend money, our economy grows.
What we should ask as informed, and intelligent VOTERS is: “HOW DO WE MAKE CONSUMER SPENDING more EFFICIENT so, we can maintain this positive and favorable trajectory and continued economic and JOB growth?” That is a GOOD question! And you have to ask, why isn’t President Biden and his economic team asking, that very question, also?
After all, isn’t this the kind of economy Mr. Biden, Democrats, and all of us envisioned, one which has consistent “declining unemployment rates, and is creating JOBS on a daily basis?” Isn’t THIS the economy we want? Well, isn’t it?! It is here, and we are actually living in our desired economy right now, which is producing millions of JOBS for us.
Here is what happened in regard to the Consumer Tax Cut to Families with Children, which is producing the Consumer Spending, and JOB creation, we are seeing. As the COVID 19 pandemic attacked, the Federal Government decided, the United States would spend its way out of the Economic Downturn caused by the pandemic. To do this, it fed the Consumer money through Tax Cuts. Among the largest of those Consumer Tax Cuts was to the Families with Children.
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.
Consumer Spending through the Tax Cut performed remarkedly well when it came to creating JOBS. When it comes to creating JOBS, 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 379,000 JOBS in September during the peak of the variant, as many experts attested to the peaking, as fewer workers were sidelined in mid-September, when the variant climaxed.
And October’s unemployment situation report shows, Consumer Spending helped to create 546,000 JOBS. November was lower as consumer spending contributed to creating 210,000 JOBS. Remember, what I said at the beginning, and of course you yourself, can now attest to this, not a single shovel has gone into the ground as a result of the Biden infrastructure bill, and the Build Back Better spending has, yet to be approved by the Senate. So, these measures are definitely not driving or causing the current job creation and growth we are seeing. However, our economy continues to grow JOBS!
There is no denying the consistency of Consumer Spending in growing our economy. It is being affirmed, every month, what 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.
Here we are, presenting the truth to you, Mr. Biden, and Democrats. Now, if you yourself, can see that Consumer Spending is driving our economic growth, and creating JOBS, you have to wonder, why don’t Mr. Biden, Democrats, and the Congressional Black Caucus see and understand this DATA, also?
Having discovered, how to grow our economy and create JOBS through Consumer Spending, due to a Consumer Tax Cut, give this question some thought; What if the Tax Cut to Families with Children, which Democrats have sent to the Senate in the Build Back Better package is, diluted, watered-down or ended? What group will TAKE A HIT, as the result of less Consumer Spending at this crucial time?
The economy itself would be the first victim, because it would slow, similar to the Slow Economic Growth we experienced after the 2008 Great Recession, and of course, the Families with Children would be the next group. Beyond that point, the ripple effects would spread to working class Americans, and especially to Black Americans, who have the highest unemployment rate at 13.8%.
Biden’s use of the U-3 category unemployment rate of 4.2%, as his official unemployment rate, is misleading, at best. It gives voters the impression, we have a better economy than what is factually true. This political maneuver hides the fact, Black people are in a perpetual Recession; perhaps Biden’s aim in using this illusion. The real unemployment rate is 7.8%.
If Democrats want to be the party of working-class people and win the 2022 elections, opening their eyes to prioritizing a Consumer Tax Cut for Americans in some form, whether it is through the Tax Cut to Families with Children, or through some other means, which we will discuss, is “the right thing to do.” It is, what they have to do to keep our economy, and job creation on the positive trajectory, we are currently experiencing.
Now, let us answer the question, “HOW DO WE MAKE CONSUMER SPENDING more resilient and why is there a need to do this?”
Here is why. Potentially, Republicans will demand the recipients of the benefits of the Tax Cut to Families with Children be “mean tested,” and work requirements be applied to the beneficiaries of the tax cut. Obviously, these requirements would reduce the effectiveness of the tax cut, as Consumer Spending would take a big hit as fewer consumers would take advantage of the tax cut, and millions will be eliminated because of means testing, thus reducing spending and job creation. This is clearly a ploy by Republicans to DILUTE the Tax Cut.
The demanded changes are the result of old talking points. Republicans employed these same tactics during the Clinton administration, when a similar Tax Cut to Families with Children, and the earned income tax credit were used to grow our economy. As these Republicans demands derail, the Tax Cut to Families with Children, higher interest rates will also take a heavy toll on the Tax Cut.
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 layoffs, like any other worker group. 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, because of the layoffs.
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 plan 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 at least, the same amount of money, $529 million a day hitting the economy, in 2022, consistently continuing to create millions of JOBS.
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 tightens, or 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 and efficiently 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 $1.7 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.
It is clear, “an intact,” and solid Tax Cut to Families with Children, OR a 10%, $25,000 Consumer Tax Cut to Baby Boomers is, what it will take to continue to grow this economy and JOBS, at its current rate. Democrats will not win the 2022 or 2024 elections, without a strong economy. Unless Democrats do what, Voters elected them to do, grow our economy, and create JOBS, on a long-term basis, we are in trouble. The past tells us, infrastructure spending, and 3rd Party Programs are not enough to pull this off! Hence, a Slow Growth Economy, could be our future, once again.
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.