It's the ECONOMY stupid-III

"It's the economy, stupid" was a phrase in American politics widely used during Bill Clinton's successful 1992 presidential campaign against George H. W. Bush. For a time, Bush was considered unbeatable because of foreign policy developments such as the end of the Cold War and the Persian Gulf War. The phrase, made popular by Clinton campaign strategist James Carville, refers to the notion that Clinton was a better choice because Bush had not adequately addressed the economy, which had recently undergone a recession.

It's seems like all we hear these days is deficit this, deficit that. As talk of a Government shut down hangs in the balance. I started to wonder how would African-Americans be impacted under these proposed deficit cuts? I cannot say I was surprised in what I found and if I am writing it here it cant be good. As I have reported here on the blog before, the expectations of the population growth of Hispanics will help to make  minorities the  majority by 2050. With that being said; Latinos, African-Americans, Asians and Native Americans will ultimately be responsible for President Bush's out of control deficit spending. This demographical shift will fall on the shoulders of our children.  They will pay for Bush's bad decisions. 

In December 2010, President Obama's deficit commission  released it's proposed deficit cuts.   A proposed $4 Trillion  in  deficit cuts would be achieved through spending cuts in the area's  of domestic and defense spending as well as tax revenue cuts.  Economist say that "Minorities will be hit harder under these proposed cuts." Disagreeing on timing of proposed deficit cuts, economist Alegman Austin stated that "We can't be talking about deficit reduction until we have a strong economy" Austin went on to say "It would be like talking about someone's physical state while they were plagued with fever." 

Don't get fooled here, it's timely to talk about deficit cuts but, if it stalls the economy that's the best that the Republican's  could hope for.  All this talk about how tax cuts for the rich will help the economy is pure bunk. It's still President Reagan's trickle down economics, which did not work then and will not work now. If you are unfamiliar with this idea, Reagan believed,  thus all Republican's still believe, that if you cut the tax's of the rich their expansion in wealth will "Trickle Down" to the rest of society. It does not work. In a 2003 report that covered  50 years, found no direct correlation between tax cuts for the wealthy and growth in the economy,  growth in the Income, growth in wages or  in job growth. The report did find that when taxes were higher these four areas also saw growth.

Keep in mind that this is just President Obama's proposal, every President needs to have an idea, a blue-print for Congress. It's all politics after that. The House will  pass their proposal and then the Senate will pass their proposal.  The final deficit cuts that are enacted will be a composite of the Presidents, The House and The Senate. It has been contentious. USA Today reports that the House Republicans  just released their proposed cuts in spending of about $5.3 Billion, still leaving $4.8 Billion in "earmarks."

What are "earmarks," these are pet projects that Congressional members usually bring home to their states. The earmarks here are mostly for the military spending.  Like I said before, this is where it gets tricky because Republicans go after Obama for being a Socialist while they pad legislation with earmarks, which ultimately hurts all of us. So much for spreading that pain around.

The concern that most have in Obama's proposal is an attempt to rein in out of control spending in social programs and making broader cuts in Medicaid and Medicare which would impact minorities. The payroll tax holiday provision, a 2% reduction in payroll taxes,  that most of us received at the beginning of the year, will indirectly shrink the coffers of Social Security down the road. If current and future payees  have to face a smaller check  this impacts our community.

Furthermore, making them more dependent on their family members who are already suffering under current economic conditions.  Some are proposing a change in the retirement age would also create financial hardships for minorities.  

 Bloomberg reporter, James Rowley, wrote ; that if  the Democrats and Republicans are in a standoff over this year’s budget, with Republicans insisting on $61 billion in spending reductions. Current spending authority ends April 8, and a failure to agree by then would force non-essential government functions to shut down.