(ThyBlackMan.com) The United States has the greatest economy in the world, the number one, and largest economy in the world; it is an over $20 trillion economy. China by comparison, the second largest economy, is reputed to be an $18.6 trillion size economy. Additionally, some comments stated, at the Shanghai Conference, recently sponsored, by Chinese President Xi Jinping, from August 31 to September 1, 2025, where U.S. global influence was challenged, ought to grab your attention. The leaders of South Africa, Brazile, Russia, and India were present.
India and China’s population size of 2.8 billion people, in a world population estimated to be more than 7 billion people, was discussed. And the conclusion of some of the attendees is, the more populous nations, with China at the leadership, should be the global economic leaders, based on their population. Yet, the United States population of 342 million people, is the #1 economy, making it the economic leader. There is no question the United States is punching way above its weigh-class, when measured by population, against other economies of the world.
And by the way, it is no accident, that the U.S. is the largest and number one economy. So, how is this possible, you ask? What got the United States to this point, putting it in such a powerful and envious position? What is the core of the United States economic strength and success? It is consumers spending, that is, you, and me and, everyone else in this economy spending money, that has made the United States the largest economy in the world. Here are the statistics to show you that it is true. Consumer spending, or consumption spending, accounts for 68-70% of U.S. gross domestic product (GDP), according to the Bureau of Economic Analysis (BEA).
What does that mean to you as an average person. Well, we have a $20 trillion plus economy as stated above, and when you add up all the buying and selling transactions within our economy, it’s dominated by you, the consumer. 70% of all those $20 trillion plus economy transactions, when you add them up, are done by you, and me, and everyone else, as consumers. It is not the exportation of goods and services to other nations, and it is not the size of our military, although the United States spends more money, by far, on defense than any nation in the world, it is every day consumers spending money that makes the U.S. the greatest economy in the world.
When the consumer spends money, the United States economy grows, creating millions of Jobs and when consumer spending declines, the economy slows, resulting in layoffs and low job creation, as recently illustrated in the August Job Situation numbers. While China and India have greater populations, consumer spending in India accounts, according to the World Bank, for 60% of India’s GDP. However, India, in terms of size, is reputed to have a $4.3 trillion economy, compared with the United States over $20 trillion economy. While India maybe one of the fastest growing economies globally, the size of its economy is no match for the United States. This is why India wants to export or sell goods to the larger U.S. economy, so that it may grow.
China, as indicated is the second largest economy in the world at $18.6 trillion, but when it comes to consumer spending, the United States is ahead of the Chinese. Chinese leaders, without question, recognize the United States lead in this area. Peng Sen, president of the China Society of Economic Reform, said in an article by Bloomberg News on 3/25/2025, “Authorities (the Chinese Communist party – the CCP) should make efforts to boost consumption, as a share of gross domestic product (GDP) to 70% by 2035 from about 55% currently.” Peng remarks add urgency to calls for China to adjust its growth model, as geopolitical tensions threaten to slow exports, and returns on investment diminish. The Chinese government has made boosting domestic demand, particularly consumption (consumer spending), the top economic priority this year, although authorities didn’t put a number to that goal.”
So, as the United States economy slows, based on the August Job Situation report showing, only 22,000 Jobs were created in August, boosting consumer spending has become a priority, as it should. The most comprehensive unemployment rate, per the Bureau of Labor Statistics (BLS), the U-6 category rate, from the Table of Alternative Measures of Labor Underutilization moved higher from July’s 7.9% to 8.1%. This pushed the African American unemployment rate, which averages 2.7% over the U-6 rate to 10.8%, for August.
To compound the nation’s Job problem, the BLS also stated, in that August report, 911,000 fewer Jobs were created between April 2024 and March 2025. Obviously, low job creation numbers affect consumer spending, because when the United States more than 170 million people work force decreases, consumer spending declines. With that said, the “Mainstreet media” promotes the false narrative as stated by the Trump administration that unemployment is at 4.3%, which means 96% of Americans are employed at full-time Jobs, if they want one. That means America has a full-employment economy, per Trump, which just isn’t true. How can the Trump administration have a full employment economy at 4.3%, when economists estimate the job market needs to add as many as 230,000 Jobs a month to keep the unemployment rate positive. 29,000 Jobs per a month, over June, July and August, which is what the U.S. economy has averaged, isn’t a full employment economy.
Furthermore, low- and middle-income households are struggling to make ends meet, as inflation increased for the fourth month in a row to 2.9%, annually. The Federal Reserve is tasked by law with a duel Congressional mandate to maintain 2% inflation and keep unemployment rates stable, which leads to U.S. economic growth. If unemployment rises, the economy won’t grow. It uses raising and lowering interest rates (the cost of money when you borrow it) as a tool to manage this delicate balance. Higher interest rates dampen inflation but contribute to a slow economy and layoffs. Click on, https://thyblackman.com/2024/08/18/kamala-harris-economic-policy-the-truth-behind-undercounting-unemployment-rates/.
Therefore, it is logical and critical that the two major political parties, Democratic and Republican, should prioritize, and promote economic proposals that keep the consumer spending, as consumers spending money is integral to economic growth. Consumer spending is not only the way the United States maintains its world leadership economically, but it also keeps money in working-class Americans and families’ pockets, creates Jobs, and grows the U.S. economy.
So, how do you increase consumer spending and consistently create the millions of Jobs working-class Americans need? It is obviously not through President Donald Trump’s “$3.4 trillion One Big Beautiful Bill,” as he said the United States as a result of its passage would experience a “Boom,” in Jobs. Here is what was stated on the White House web site on June 24th, 2025, where the “One Big Beautiful Bill,” Trump’s tax cut proposal, was promoted: “The One Big Beautiful Bill delivers for the American worker: The One Big Beautiful bill delivers the largest tax cut for working-and middle-class Americans in history. Put simply President Trump’s One Big Beautiful Bill will unleash our economy and deliver a Blue-Collar Boom.”
Mr. Trump defied common sense and well-known economic principles, by extending the 2017 Trump Tax Cut which is what the OBBB did. Wealthy earners, as a result of his bill, got an outsized share of tax benefits, not everyday consumers. Statistics and empirical evidence show tax cuts to the wealthy are not necessarily stimulative. This means, there is not a direct connection to giving tax cuts to billionaires, millionaires, and corporations, that results in job creation. Congress having passed the bill, and President Trump having signed it into law, we can see with our own eyes, we are not experiencing the BOOM in Jobs, the bill promised. It’s because rich households just preserve their wealth and income rather than spend it.
However, the recovery in the United States from Covid 19, tells us a different story. The Covid 19 pandemic showed us, we have a relatively simple economy, when it comes to growing Jobs, unlike some other nations. The consumer as stated above powers 70% of Job creation in our economy. Consumer spending, as a result of the Cares Act through tax cuts, tax credits, stimulus payments, was a major contributor in the rate of unemployment dropping from 14.7%, in May 2020 to 6.7%, in November 2020.
When the nation was on its knees economically, due to the pandemic, policy makers did not turn to what Republicans have sold us, as a fix for the economy, tax cuts to billionaires, millionaires and corporations. They turned to consumer spending money to consistently create Jobs and grow the economy. So how do you increase consumer spending you ask? You do it through a 10 year 10% $25,000 Boomer Consumer Tax Cut, that’s how. Click on TheFixThisTime.com for details regarding the tax cut. With diversity as our strength, capitalism and the economy should work for everyone. The TRUTH matters.
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.
