Earl Ofari Hutchinson's take on the politics of the day
The Hutchinson Report
American Urban Radio Network
Al Sharpton Show
Monday 10:00-11:00 AM PST 2:00 to 3:00 EST
Streamed on http://tunein.com/radio/WURD-900-s23419
KPFK Radio Los Angeles 90.7 FM
Saturdays Noon to 1:00 PM PST
Streamed on http://www.kpfk.org/programs/181-hutchinson-report.html
Here is what the President of the United States says the American Jobs Act will do, “It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans, and more jobs for (the) long-term unemployed. It will provide -- it will provide a tax break for companies who hire new workers, and it will cut payroll taxes in half for every working American and every small business. It will provide a jolt to an economy that has stalled, and give companies confidence that if they invest and if they hire, there will be customers for their products and services.” While it may initially fulfill some of those objectives, the American Jobs Act will not bring us a sustained long term recovery from the greatest downturn since the Great Depression and to the President’s credit, he does not make that claim. You see, however that’s what we want to hear, because, let’s face it, we want this recession to be over, like yesterday, if that were possible. Well speaking for myself, that’s what I want to hear. We want him to find and embrace a plan, where he can confidently say to us, “The plan I am about to present to you will bring this recession to an end.” Wow, now that’s leadership.
Why isn’t the American Jobs Act not good enough? Because, it is limited in its impact. It will affect teachers because money will be provided, and we don’t know yet through what entity it will be provided, to rehabilitate our schools. We know if the authority to issue funds is given to certain Republican governors, county and city administrators, it may not get spent or will be spent on projects other than schools. How do we know this? We know this because, it happened with the last stimulus dollars. As for the payroll tax deduction, we are currently experiencing its impact and it has been negligible. Why? It’s just not enough money to cause the jolt to the economy the President wants. The deduction is active right now. The President wants to extend it. Unemployment has actually gone up while the deduction has been in place. The tax reduction to companies, that he speaks of, may engender some companies to hire workers, however some of these companies are not capital poor. It’s widely reported , many corporations are holding 2.6 trillion dollars on their balance sheets. So for those corporations, money is not the reason they are not hiring. But never the less, I am sure there are a lot of businesses who will take advantage of this credit, causing some reduction to the unemployment rate. Will it create more construction jobs? That will depend upon how many projects are “shovel ready.” And once again, through what channels the money will be distributed. Look, I am sure the President and his team will insist the entities to whom the money goes will see that the money is spent speedily and on the projects that are worthy. The extension in unemployment insurance benefits is badly needed and will help those out of work over six months, but I tell you it is not enough. So all and all, we can see where the American Jobs Act will have some impact, but not enough of an impact to end this down turn.
The American Jobs Act plan while needed should be part of a broad approach. You see, when we took the American Jobs Act plan apart, we saw it affects certain parts of the problem within the economy , rehabbing school buildings, fixing roads and highways, and tax breaks to businesses and corporations who hire unemployed workers. His Job Act, however, doesn’t create enough demand to completely lift us out of this downturn!!! And I think that is why he left open the possibility of doing more. In order to completely end this recession, he has to engage consumers in a meaningful and sustained way. You say why? Because the consumer accounts for 70% of the economic activity in this country. Just like the bread winners in your own household when they pay bills and buy food, it accounts for 80-90% of activity in your household. Eliminate you ( the bread winner ) and your household falls on hard times. Well, the same thing is true for our country, it’s the consumer who drives prosperity in this country, and he and she are now MIA (missing in action). This President has to find a way to legitimately put money into consumers’ hands without increasing the budget. Then you will see the economy rapidly heal, especially with the American Jobs Act in place!!!
I know I have said this before and it bears repeating until we get some traction on this proposal. Nothing is more important than seeing that 18% unemployment rate for Black men head south. The President and Congress can act now, to put money into consumers’ hands, and end this recession by changing the laws governing Social Security to allow 9,600 baby boomers who will be retiring each day over the next 18 years to take partial distributions of $20,000.00 dollars from their Social Security principal. Congress, by extending the partial distribution option, which is required among private pension funds( private pension plans must present this option, among other options also, at the time you are thinking of retiring and rolling over your retirement funds), to Social Security effectively creates a pool of capital big enough to stimulate the economy, thus creating jobs. Additionally, waiving the taxation on the first $20,000.00 dollars withdrawn from any retirement fund, Social Security included, gives all income classes, especially the middle class, a needed tax break and an incentive to take the partial distribution. Boomers, who are estimated to be 68-72 million consumers, could dump as much $192,000,000 dollars into our faltering economy each day, based on the waived tax benefit, and the $20,000.00 dollar partial distribution, ( $20,000.00 x 9,600 ). It’s a fact, as I said consumers account for about 70% of our economic activity or GDP, ( gross domestic product). Therefore put money into the hands of consumers. They could inject approximately $70 billion dollars a year, into this economy as THEY PURCHASE PRODUCTS, SERVICES AND REDUCE DEBT TO COMFORTABLY RETIRE. Imagine, that number doubles to $384,000,000 dollars per day or approximately $140 billion dollars a year pumped into the economy if the partial distribution is raised to $40,000.00 dollars. Our objective should be to have Congress enact legislative changes to Social Security to make this possible and put our country back to work !!! I feel it should be offered to all retirees @ 66 years of age who are taking down “full” retirement benefits.
Look, this plan addresses every objection Republicans have. It creates jobs without increasing the deficit and lowers taxes on the wealthy and middle class. It's big! Lifting all boats in the water at the same time, and answers businesses’ need for long term planning. www.sslumpsum.com.