Immigration, again
In honor of the creepy, anti-immigration Preserving Western Civilization Conference, which convenes at Baltimore/Washington International Thurgood Marshall Airport this weekend, we reprise this column:
So President Barack Obama, presiding over what will surely be the biggest budget deficits in history, doesn't want the country to go bankrupt."If we do nothing, then we will continue to see red ink as far as the eye can see," he said at a news conference two weeks ago. He'll summon a "fiscal responsibility summit," he told The Washington Post last week. America, he said, must make "hard decisions" about Medicare, Social Security and other expensive programs.
Hard decisions, of course, will include cutting costs and benefits, which will anger Democrats. We'll also need to raise taxes, which will anger Republicans.
But the hardest decision of all may be about increasing immigration, which even Obama doesn't seem to want to talk about. The retreat from trillion-dollar deficits must include recruiting millions of new Americans to share in this country's bounty as well as the cost of running it.
Immigrants have freed the United States from tight spots before. Properly managed, a doubling or tripling of immigration in the coming decades can help get us out of this one.
We can't cut our way entirely to solvency. The senior lobby is too entrenched, the profligate Medicare program too cherished to shrink it to a size within the country's present means. (Social Security, on the other hand, is easy to fix if we slightly cut benefits and increase contributions now.) Extending national health care to everybody will raise spending even higher.Nor can we tax our way completely out of the red. Raise taxes too high, and they hinder growth.
And growth, after all, is a critical piece of the solution. Because tax collections rise with the size of the economy, a percentage-point increase in annual gross domestic product, sustained over decades, can mean the difference between insolvency and surpluses.
One way to improve the economy is productivity - higher output per worker or per factory. But the technology boom that increased productivity since the mid-1990s may be stalling. Every worker is on the Web who needs to be. Everybody has a cell phone, and pretty soon everybody will have a BlackBerry.
The only other way to expand the economy is by adding to the work force. Americans alone aren't doing the job. At recent birth rates, the population would decline if it weren't for immigrants, leaving an inadequate pool of younger Americans struggling to pay debt incurred by their elders.
So immigration is another way out of the deficit debacle.
The national debt just surpassed $10 trillion and will surely head higher. We need new taxpayers to help pay it off.
There are nearly 20 million vacant homes and apartments across the United States. We need new renters and owners to live in them.
There are companies that can't find enough competent employees. We need new workers to help them grow. There are retailers going bankrupt. We need new consumers to buy their stuff.
About 1 million people a year have immigrated to the United States recently, or one third of 1 percent of the population. A century ago, immigrants boosted the population by much more - 1 percent a year.
Good thing, too. Millions of new Polish, Russian, Irish, Italian and Greek citizens gave the country the economic strength it needed to win two world wars.
Opponents focus on the short-term costs of immigration - increases in social services use, supposed competition with domestic workers or alleged higher crime.
But these costs can be smart, long-term investments. The United States is living proof. No country is better at merging many into one, at building strength through diversity. Those who "packed up their few worldly possessions and traveled across oceans in search of a new life," as Obama described immigrants in yesterday's inaugural speech, helped themselves but also bequeathed a rich future to their descendants.
The U.S. government is spending trillions to bail out banks, consumers and everybody else.
Immigrants can bail out the bailer.
Comments
This article does bring up some interesting points, by the timing is awful. With unemployment set to reach double figures, increasing immigration is the worst course of action. Once the economy starts working again, then perhaps an increase may be warranted. The unemployment rate isn't up because there aren't enough workers to fill the jobs, it's because there aren't enough jobs to go around. Increasing immigration will only lead to an increase in the unemployed.
Posted by: Halibut | February 6, 2009 10:36 AM
Maybe Jay should change his last name to Ponzi as his belief that growth will cure all is the mechanism that the pyramid scheme requires. The U.S. will not be a better place to live with a billion people - the population by 2090 if immigration is not reduced.
For an irreverent, but realistic portrait of immigration, check out
http://www.youtube.com/watch?v=cBw1nUlf38I
NumbersUSA is the hero.
http://www.numbersusa.com/content/resources/video/recommended/immigration-gumballs.html
Posted by: WandaGB | February 6, 2009 10:46 AM
I believe you hit the nail on the head. Imagine this... last year’s immigration reform bill that passed the Senate included some $6,000 in fees and fines per applicant. If you multiply this number by 12 million, you would get 72 billion dollars that would go to the government’s bank account. Additionally the bill required the payment of taxes (this would bring in another sizable amount). The successful applicants would thereafter receive a social security number and would be required to pay taxes otherwise they would not be granted their permanent legal status. Legalization of these people would not only assist in the bailout but would resolve the issue of immigration reform. Without a comprehensive immigration reform the lives of many American families are being destroyed.
Posted by: moses | February 6, 2009 12:26 PM
I think this article brings in an interesting point of view that the govt should consider. If you charged 10 grand to make each person a perm resident within a month the govt bank will be flooded with cash. Of course some restrictions are needed like a high education and ability to contribute to the economy. Given this America is getting a competitive advantage with great talent and the govt is filling its purse... what say Senators?
Posted by: Nashi | February 6, 2009 12:59 PM
This has to be the worst idea I have ever read.
Posted by: Neil B. | February 6, 2009 2:09 PM
Neil B. called it. Excessive immigration is part of the reason we are in the mess we are in. How many foreclosures in your state are recent immigrants who had nothing to lose, and were grist for the mill of mortgage brokers only interested in fees.
Now Senator Dodd, Barney Frank, Charles Schumer and the rest of the left intend to tax responsible people to give money to irresponsible people.
Are we doomed, or not?
Posted by: Erik Kengaard | February 6, 2009 3:07 PM
Sadly, most US citizens (including anti-immigartion zealots) actually have no clue about the immigration policy and procedures in their own country.
Current immigration system in the US is broken and it does not benefit either potential (legal!) immigrants nor US citizens or economy. For some reason the lawmakers seem to favor the illegal workers, who, so to say, just "jumped the fence" over, say, a brain surgeon born in India, who's already working in a hospital near you, pays taxes and, most likely, spends money in the US instead of wiring it back to India.
Moses mentioned 6000$ fee that could be collected from a "legallized illegal". Well, guess what - every employer who wants to bring in a foreign worker, has to pay 1500$ to some mysterious fund, which is supposed to increase employment among US residents. Immigration application fees paid by skilled workers or their employers already range somewhere between 3000$ and 5000$ per person. I myself have to pay for employment authorization $340 every year. Where does all this money go?
Posted by: Jelena | February 6, 2009 3:20 PM
The economic analysis you used to come to the conclusion that we need more Immigrants to solve our deficit problem is way to simplistic and ignores way too much. It sounds more like the reasoning of a couple of Frat Boys who ran out of Beer at their last party and so have concluded that they will have more Beer if they invite more guests.
There is a field of Science called Demographics that goes hand in glove with Economics. It says that unless the Demographics of a larger group is radically different from the Demographics of a smaller group, the larger group will tend to behave the same was as the smaller group. So if 300 million Americans ran up a $300 billion per year deficit, then 400 million Americans will run up a $400 billion per year deficit. So unless you intend and requiring all new immigrants to America to be between the ages of 18 and 25, have graduated from ALL their planned education, and each and every one must work until retirement, immigration will never solve our deficit problem. In fact, it will only make it worse.
Currently our politicians run our government just like those Frat Boys mentioned above. They have a big party and give out all kinds of freebies. America has become one giant kegger with everyone trying to make sure that they do not get stuck with the bill. The only way to make the bill go away is to stop the kegger and tell everyone who was there to pay it off. Aside from not making economic sense I cannot believe that this analysis even thinks to suggest that we should invite Immigrants to the USA just to stick them with the bill from our give-away programs. I think they used to call that “indentured servitude”.
The purely economic reason that Immigration is not the solution to our deficit mess is much more fundamental. Human beings require a certain level of income in order to survive. They must pay for food, housing, clothing, medical care, and transportation. Once these basic needs have been paid any extra income is wealth. It is on this wealth that all of our economy is based and from which our taxes must come. If you increase the size of this wealth you can increase the size of the economy without adding a single person to our economy. Whereas every time you tax this wealth you reduce the size of the economy. And Immigrants to the USA do not add to our economy in any significant way unless they earn a level of income far in excess of paying their basic needs. Please also note that recently published scientific articles say that our birth rate in the USA is such that even if another immigrant never sets foot in our country our population will continue to grow. And US Bureau of Labor Statistics says that we will have one half million more Citizens entering the workforce each year that we have retiring for the next five years. The only thing that Immigration has done for us in the last twenty years is to either mask the fact that through increasing taxes, our government has been slowly but surely shrinking our individual wealth or to subsidize our lifestyle as Illegal Immigrants push Citizens out of work by taking below market wages.
And finally, if we were at full employment importing more people is not necessarily the best alternative. In fact, if we are at full employment, people would then start investing their excess wealth in other countries. Every 401k Plan usually has a foreign investment fund. And those investments would yield billions in profit. And since those billions in profit would be purely increases in wealth they would be 100% taxable, yielding billions in economic activity in the USA and billions more taxes without any immigration at all. History proves this in the development of what used to be called the “Four Tigers” of the Pacific. Of course this will never happen because eventually this alternative would cut off the supply of cheap labor as the rest of the world gets as rich as we are.
Posted by: Norski | February 6, 2009 4:21 PM
Using the logic that larger is better, if we could make the fee $100,000 think of the money we would have when we multiply that by the 30 million illegal immigrants that are here now... more is always better.
Feed the monster
Posted by: McMorty | February 6, 2009 4:30 PM
More immigrants could fix the economy? Kinda like saying pneumonia is the cure for the common cold
Posted by: Kev B | February 7, 2009 4:28 AM
The US population is estimated to grow from today's 306 million to at least 420 million by 2050. I can't imagine that it will be a better place to live. Think New York or California. Overcrowded, congested, overpriced a declining quality of life. Americans leave those states at a higher rate than they move in because they are too expensive. By 2050, there will be nowhere in America to go to escape high living costs and overcrowding.
Posted by: Jay Firth | February 7, 2009 5:23 PM
Those who believe as Jay Hancock does that flooding our shrinking job market with more immigrants is as dumb and shortsighted as those who believe Obama's stimulus plan is the solution to our economic problems.
Dave Gorak
Executive director
Midwest Coalition to Reduce Immigration
Posted by: Dave Gorak | February 11, 2009 12:02 PM
Mr. Hancock seems to believe that the more warm bodies you have, the richer your country is going to be. I quess that's why Bangladesh is so prosperous.
No, Mr. Hancock, huge numbers of consumers will never consume their way to prosperity. Weath creation, especially in these times, requires educated and skilled workforce. And it helps when they are united by common purpose instead of divided by "multiculturalism" and "diversity."
As demonstrated by the comprehensive study of the National Research Council, immigrants are less educated and skilled, on average, than natives. They take out more in services than they pay in taxes. Also, their numbers drive down wages, thus lowering, rather than enhancing the tax base.
Mr. Hancock says that immigrants in the previous Great Wave assimilated. Yes, but that was because we cut immigration sharply in 1924. This encouraged those immigrants to assimilate, while allowing their wages to rise.
Like many economists, Mr. Hancock sees the world through the lens of his own discipline. He would do well to reflect on what endless mass immigration will do to our culture, our values, our living space, and our environment.
John Vinson
Editor, Americans for Immigration Control
Posted by: John Vinson | February 19, 2009 12:27 PM