(ThyBlackMan.com) With Consumer Spending, or consumption spending accounting for 68-70% of U.S. gross domestic product (GDP), according to the Bureau of Economic Analysis (BEA), “the 68-70% figure alone is proof,” it is Consumer Spending that is at the heart of growth and Job creation. Increase Consumer Spending and you increase Job creation. It makes you wonder why policy makers would risk wrecking our economy with Trump’s projected $3.8 trillion to $5.0 trillion Trump tax cut bill, that unwisely, unfairly and unjustly gives tax cuts to billionaires, millionaires, and corporations, when Consumer Spending is responsible for 7 out of every 10 Jobs in our economy. If you want to grow the economy, give a tax cut to consumers, instead (https://thyblackman.com/2025/06/01/donald-trumps-tax-cut-of-3-8-trillion-vs-a-1-5-trillion-10-consumer-tax-cut-proposal/).
With the wealthiest 10% owning 90% of all stocks, there is simply no credible argument for giving a tax cut to billionaires, millionaires and corporations, when the Bureau of Labor Statistics (BLS) economists stated the most comprehensive unemployment rate for May is 7.8%, and not 4.2%. The African American rate, the highest of any worker group, which is 2.7% higher, over the real, and most accurate rate is, 10.5%. Logic would dictate, policymakers should be arguing for a 10 year 10%, $25,000 consumer tax cut, to create millions of Jobs and grow the American economy, as Consumer Spending drives 70% of the U.S. economy and when consumers spend money, the economy grows.
When you look back over the years and see how the two major political parties and their billionaire-donors have undermined and ruined the American economy, for Americans, American workers, professional, blue collar, union, working-class Americans, and retired Americans, it makes you think. They mismanaged our Social Security trust fund, underreported our unemployment rates, and are currently looking pass a practical way to create Jobs, and grow our economy, through a 10% Consumer tax cut. They are acting as if the economic problems we are facing today suddenly just materialize. The book, “The Fix This Time,” states it differently.
The nation’s problems with Job Creation, deficits, tax cuts, and Social Security (an entitlement program Republicans and most billionaires want to do away with) did not originate with Trump, however. The saga started with former president Ronald Reagan, the Republican’s hero of sorts, and his Secretary of the Treasury, Donald Regan, who was the former chairman and chief executive officer of Merrill Lynch, one of the most prestigious investment banking houses on Wall Street, at the time. They came up with the template used to raid the Social Security trust fund. Today, it is the major reason, Social Security payments are being made from the current account of the nation’s budget.
Politics, as opposed to common sense, may be at work here (I get that), but President Trump’s Tax Cut proposal will wreck the economy that made him, and his supporters wealthy. He has to know, if he is a decent businessman, his success of growing Jobs with his tax cut is very low. We know this because we have the statistical results of the 2017 Tax Cut Act, which he wants to extend. However, America can grow its way out of economic weakness, if the wealthy and powerful delay giving tax cuts to billionaires, millionaires, and corporations. It’s simple. The percentage is high, extremely high, we will grow the economy, create Jobs and surplus revenues, if we support a 10% $25K Boomer Consumer Tax Cut proposal, because number one, a tax cut to the “70 percent who is responsible for growth,” makes common sense; and we have done it before successfully, in our recovery from Covid 19 (click TheFixThisTime.com). Because of the brevity of this article, we can only review the highlights of how we got into this mess – you will have to read “The Fix This Time,” to get more information, and details. It’s not rocket science, I can assure you.
In 1983 the Reagan administration was tasked with fixing the Social Security trust fund because it was incurring deficits, since 1972. The deficits were small initially but by 1983, the program incurred a $14.90 billion deficit. There was a call, for the need of a bipartisan committee, to address the problem of not only the current Social Security deficits, but the task of preparing the Social Security program for the retirement of the Baby Boomer generation. President Reagan appointed a blue-ribbon commission headed by Alan Greenspan, who would later be appointed by him, the Federal Reserve chairman.
The mandate was to study the issues concerning the Social Security program and make recommendations for legislative changes. In 1983, a bill was signed into law. The changes made, which were important in order to fix the deficit problems associated with the trust fund; payroll taxes were gradually raised over a seven-year period and the retirement age was raised from 65 to 66 years of age, at which time Boomers could get full retirement benefit payments. This was a good fix, as the trust fund would, if properly managed, enjoy accumulated interest over approximately 30 years.
When former president Reagan signed the Social Security Amendments of 1983 into law on April 20, 1983, he said, “We promised that we would protect the financial integrity of Social Security.” He additionally stated, “the Social Security System must be preserved.” Because of this legislation the Social Security trust fund in 1984 ran a surplus and would continue to run surpluses, until 2012. However, in 1984, when the surpluses of the Social Security trust fund started rolling in, due to the higher payroll taxes, former president Reagan instead of forwarding that capital to the trust fund, which in essence would have made the program an off-budget program (separate from the regular operational federal budget of the federal government), Mr. Reagan through his treasury secretary, Donald Regan, made the Social Security trust fund assets a part of the regular federal budget.
Thus, the mismanagement of the Social Security trust fund proceeds, was born. Even though the Social Security trust fund book of accounting noted non-marketable government IOUs were placed on the ledger, to indicate the money had been taken, it was merely a means to keep track of the misappropriated funds, as they came in. The raiding of the trust fund proceeds, started during the Reagan administration in 1984, and would continue into the George W. Bush presidency in 2000, as the Bush administration would divert to the general operational budget, almost all of what was left of the Baby Boomer generation’s payroll tax trust fund.
Be that as it may, or in any case, the following are some comments from Democrat Gene Green (House of Representatives -Texas’ 29th Congressional District), which puts the issues of the Social Security trust fund in a frame of understanding. Many Republicans want to see Social Security ended or its benefits reduced. These comments were made on the floor of the House on February 9, 2005, and are part of the Congressional record. Green said this, “Mr. Speaker (Speaker of the House of Representatives), Social security is neither broke nor bankrupt…If our government is going to pay back the debts we owe to someone in a foreign country that invests in Treasury notes, why should we not be required to pay back the Social Security trust fund, whether it is 2018, 2025 or tomorrow.”
But Democrats and their billionaire supporters are just as bad as Republicans. As stated above, Democrats in 1994, thought it was a great idea to underreport our unemployment rates, which I have written about any number of times, and is documented at theFixThisTime.com. That was 31 years ago. The most comprehensive unemployment rate, according to the Bureau of Labor Statistics (BLS) economists, for May, is 7.8% (U-6), and not 4.2%, which is the U-3 category rate. The Clinton administration wrongly promoted the U-3 rate, as the most comprehensive rate, starting in 1994 and U-3 is promoted as such, today.
Thus, we have a high “Real and comprehensive unemployment rate,” and someone in the Democratic party thought it was okay, to open up the border to general immigrant labor, as a matter of policy, for the Biden administration and the Democratic party. With African American unemployment, at 10.5%, and the national rate at 7.8%, how could anything good for working-class Americans, result from a policy, like that?!
Nevertheless, a 10% Consumer Tax Cut, “to consumers who are 70% of the engines which drive the train of economic growth,” is mathematically sound economics. America can grow its way out of this Downturn just like we grew our way out of the Covid 19 Downturn. If you want to support something people, if you are a Consumer, and we all are, a 10% Consumer tax cut works in the best interest of all of the United States (US). To the wealthy, genuinely growing the Real economy, at the end of the day “grows more wealth,” and who doesn’t need more! We can grow the REAL Economy, and continue to argue and debate about troubling issues, just as we walk, and chew gum at the same time. We can do two things, well.
Staff Writer; James Davis
Mr. Davis is a Financial Analyst. His articles are about relating facts in a usable, truthful, and understandable way. That way, WE ALL WIN. James is, the author of three books, among them, “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M). Reach out to James @ his blog https://thefixthistime.com.
Question? Comment? One may use this email address; MrDavis@ThyBlackMan.com.
