(ThyBlackMan.com) In a recent article, I wrote, “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.”
This has come true, as American workers are now staring at an economic storm on the horizon, as the Federal Reserve (Fed) considers raising interest rates three times, in 2022 to reduce inflation. But Mr. Biden can still set our nation’s economy, on a perceptive, DATA driven trajectory of long-term JOB growth, even as rates rise, as this piece will show.
Let us get a clear understanding of our slowing economy, which will be more obvious, come February, March, and the rest of 2022. The coming economic storm is REAL, and it could result in our unemployment rates increasing, perhaps dramatically, wiping out any economic gains of working-class Americans, and Black America especially, if the Biden-Harris administration does nothing, about the expected LAYOFFS.
The slowing of our economy is not difficult to understand, and certainly does not require a degree in economics; just an open mind, and about ten minutes of your time (the length of this article). Because you were around, at the start of the COVID 19 pandemic, understanding what is ailing our economy and how to fix it, will be clear, because you will recall much of the information, I am going to share, with YOU.
On August 31, 2021, I tweeted the following message: “We’re headed for a robust period of prosperity with stock indexes reaching new highs, up to December 31st. Christmas will be lovely! Then it will all come to an end unless Democrats extend the Families with Children Consumer Tax Cut or an alternative one.” Indeed, since that tweet, all the stock indexes, the Dow Jones, the Nasdaq, and S and P 500 index have reached new highs.
The point, in recalling this tweet for you is, I want you to see, what it is I am seeing, with clear eyes, and that is, the negative effect of this Economic Downturn, LAYOFFS, can be avoided, or substantially reduced. The key to doing this, and the right question to ask, when it comes to understanding our economy is: what is currently driving our economic growth, and job creation?
Astutely OBSERVE, with your own eyes, “not a single shovel has gone into the ground,” due to Biden’s infrastructure bill. So, infrastructure Spending is not driving the current job creation and economic growth. Yet, our economy continues to grow JOBS!
If we know what is driving JOB creation, this will help us in discerning, how WE can continue this upward trajectory? Think about this! When you look at our economy for the last six months, 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, we have it, and we are actually living in our desired economy, today, right now, which is producing millions of JOBS for us. All Mr. Biden has to do is, take care of, and sustain this thriving, and successful JOB creating economy!
To do this, he needs to know, like YOU, what is driving the creation of JOBS. 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. This should not surprise anyone, especially economists. They agree, the United States is a Consumer Driven Economy. So, logically, and rationally speaking, the Consumer Tax Cut to Families with Children, referenced in the above tweet, is delivering, when it comes to JOB creation, as Consumers spending makes-up 70% of the U.S. economy. When the consumer spends, our economy grows!
Here is what happened in regard to the Consumer Tax Cut to Families with Children mentioned in the tweet above. It produced 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 Consumers money through universal Tax Cuts. They called the Tax Cuts by various names. Remember, they were called stimulus checks, tax credits, and extra unemployment benefits.
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 in July, with 170 days left in 2021. This was when the Tax Cut to Families programs got underway, beginning in July, and ending on December 31st. “It resulted in $529 million a day being given to, and spent DIRECTLY by consumers, every day, on average.”
Consumer Spending, through the Tax Cut performed remarkably well, when it came to creating JOBS. The $529 million a day Consumer Tax Cut contributed to the creation of 1.091 million JOBS in July, its highest number of Jobs & 249,000 JOBS in November. In December, according to the BLS report Consumer Spending contributed to 199,000 JOBS, its lowest number, for a six-month average monthly rate, since July, of 518,166 JOBS.
Regardless of the JOB creation numbers we are seeing ABOVE, and experiencing; this Consumer Tax Cut delivery system, has been found to be flawed, and unacceptable, to Republicans. They 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. 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 and muting spending and job creation. Hence, the “SLOW GROWTH economy,” I alluded to, that will cause millions of American workers to be LAID-OFF.
To get around these objections, by Republicans, the Biden-Harris administration, and Democrats can offer the GOP a more acceptable, delivery system. After all, the principle that Consumer Spending works, when it comes to JOB creation is not affected by the GOP’s perceived flaws, of the Tax Cut to Families with Children. The Tax Cut to Families with Children, which cost approximately $180 billion, on an annual basis; Biden can shift that money to a DATA based “resilient” demographic, which do not have the cultural delivery system problems associated with the Tax Cut to Families with Children, and continue our economic expansion, and job growth.
That demographic is the Baby Boomer generation. Look, consider this. We are in the midst of a legitimately growing economy. It is already producing surplus income for the U.S. Treasury, which means popular, and 3rd Party Programs, even the Tax Cut to Families with Children, at some point, can be fully appropriated. Without a growing economy, 3rd Party Programs will not survive. 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 to Boomers, 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 creating millions of JOBS.
Baby Boomers, as a homogeneous group, who are retiring at a rate of 10,000 a day, is statistically the better target of the consumer tax cut. When it comes to daily interest rates increases, Baby Boomers are not affected when it comes to LAYOFFS, 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 simultaneously, as the Federal Reserve tightens, and incrementally raises rates to control inflation, as the Fed did, with great success in 1994, and 1995.
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 positively touched, by this Tax Cut. A 10%, $25,000 Consumer Tax Cut, will drop $254 to $300 million, a day into our economy, in addition to the estimated $529 million a day in the first year, 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 do what it has ALREADY DONE successfully, for the last six months; consistently create, “declining unemployment rates, daily JOB creation, and produce a STREAM of SURPLUS federal tax revenues, like a successful DATA based, Growing Economy ought to, and is currently doing.”
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.