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July 11, 2007

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So why haven't Cowen, Caplan, Boudreaux, Mankiw, and all the rest figured this out? My answer: they're willfully ignorant. Since they hold the liberal view that any kind of discrimination is wrong - even discriminating among those who you'll allow into the country - they have decided not to look at these numbers like HS has.

Enough with this ridiculous anti-immigrant saber-rattling. We get enough of this from Lou Dobbs.

And let's not get started on your hand-wavy math. Each marginal immigrant worker gets doubled to two since only half work and thus their marginal cost to the US government gets doubled...while native American workers, presumably only half of whom work, magically have the same marginal cost.

That hardly seems fair.

Also, let's not forget - you (we) benefit from their presence in the form of lower cost goods and services due to increased supply. How much in cost savings do these "unskilled" workers provide? Sure they pay less in taxes, but I'd bet they more than "make up" for it in other cost savings. They probably don't get sick for BS as much and are probably harder workers. I'm guessing they have a net positive benefit on the overall economy, though of course you only choose to look at one narrow subset of statistics and extrapolate wildly from there.

Anyway, I'm not even trying to defend immigrants here (not really). Just bad logic. You fear increased competition and possibly a drop in salary (as evidenced by your rants on "higher level" jobs going to migrants) and now you want the government to step in and coddle you.

Perhaps you should be right to fear such things. But the first step towards conquering that fear is to get real with it, not to make up flimsy statistical inferences and scream the sky is falling.

The economic underpinnings of this country lie in pure capitalism. Artificial government controls in the form of tarrifs on imported goods, restrictions on more efficient technologies, or restrictions on more efficient workers have been proven to be bad. Not even surgeons are safe from the fundamental laws of supply and demand.

One thing is for sure - when has a bigger government ever helped you? Very rarely. We already have laws against "illegal" immigration and we see how well those are working. So the answer isn't more laws to justify higher taxes that will magically end up in the pockets of various Haliburton-like cronies.

So, as I said, the answer is for you (us) to realize the situation you're (we're) in and realize you (we) have to help yourself (ourselves).

Sure they pay less in taxes, but I'd bet they more than "make up" for it in other cost savings.

I would bet not. The average kid of these high fertility Hispanics in the LA Unified School district costs taxpayers over $8,000 a year. The ESL kid probably costs even more.

To put this in perspective, here is a remark from Ring Wing News' immigration FAQ about savings from illegal alien labor in the agricultural sector:

"Phillip Martin, an economist at the University of California, Davis, has demolished the argument that a crackdown on illegals would ruin it, or be a hardship to consumers. Most farming � livestock, grains, etc. � doesn't heavily rely on hired workers. Only about 20 percent of the farm sector does, chiefly those areas involving fresh fruit and vegetables.

The average "consumer unit" in the U.S. spends $7 a week on fresh fruit and vegetables, less than is spent on alcohol, according to Martin. On a $1 head of lettuce, the farm worker gets about 6 or 7 cents, roughly 1/15th of the retail price. Even a big run-up in the cost of labor can't hit the consumer very hard.

Martin recalls that the end of the bracero guest-worker program in the mid-1960s caused a one-year 40 percent wage increase for the United Farm Workers Union. A similar wage increase for legal farm workers today would work out to about a 10-dollar-a-year increase in the average family's bill for fruit and vegetables. Another thing happened with the end of the bracero program: The processed-tomato industry, which was heavily dependent on guest workers and was supposed to be devastated by their absence, learned how to mechanize and became more productive."


We already have laws against "illegal" immigration and we see how well those are working.

No one is enforcing these laws. Build a 2,000 mile wall and crack down severely on those who employ illegals and then come back and tell us that enforcement doesn't work.

Of course, there are also non-economic externalities that never concern libertarians:

New Libertarian Motto:

Capitalists of the world, unite! You have nothing to lose but your nations!

Or maybe,

Capitalists of the world, unite! You have nothing to lose but your neighborhoods!

Illegal immigrants pay Social Security taxes ("payroll taxes"), but don't receive Social Security benefits.

In my area, illegal immigrants earn a lot more than $8/hour.

Dennis Mangan writes:
[Cowen et al.] hold the liberal view that any kind of discrimination is wrong ...

Actually, libertarians generally support an employer's right to discriminate. They object when it is governments doing the discriminating. At any rate, I'm not sure that "discrimination" is the right term to describe immigration restrictions.

This is known as the average-cost fallacy in finance. I remember GM some years back saying that their manufacturing cost was $6,000 per car, which was more than what they got from fleet sales. They cut back their fleet sales, losing those revenues, AND saw their average production cost go up. Oops, only about 20 percent of their production costs turned out to be variable against production volume over the remaining life of their plants.

HS has close to zero support that anywhere near 100 percent of government costs are variable against population size. The figure could well be less than 20 percent. In fact, there is a good argument to make that government costs are variable only along one dimension--tax revenues. In other words, for every $1.00 that comes into the treasury, the government spends, oh, a $1.05. If our population dropped in half, and another dollar of taxes came in, how many of you think government spending would be cut in half? Anyone?

The reason that Cowen, Caplan, Boudreaux, Mankiw, and all the rest haven't "figured this out" is that they understand financial economics. That's it.

For the illegal aliens to pay social security taxes, they have to do it with a stolen SSN. That means that someone will collect on those payments and means the additional costs of identify theft that many Americans experience.

The illegals cost a huge amount.

Making a semi-regulr drive in Northern Virginia yesteray, I passed a 7/11 that serves as a day labor gathering place.

When the day laborers started there about three years ago, there was a golf store three doors down from the 7/11. It closed two years ago because do golfer is going to walk pass 20 Hispanic loiters to get to get. T

This week I notice the industrial rental place that was next to the golf store has closed and a restaurant has closed. Once used to get a strip shopping center now has a 7-11, a laudromat, and a check cashing place. Every other business within view of the gathering point has closed.

I wonder if the sales taxes lost to the state and city make up for the cheaper dry wall?

Interesting link here. Obtained by searching for "immigration externalities" here.

In the future, I recommend you at least survey the economic literature before making a claim like this.

Excerpt:

The standard approach to the fiscal impact of immigration in the
international literature consists of combining a demographic profile of the
population before and after an immigration influx with the cost per capita of
providing public consumption and transfer payments. Similarly, tax revenues
are estimated based on the incomes and consumption patterns of different
demographic groups. This literature suggests, by and large, that the fiscal
impact of immigration is positive: immigrants add more to tax revenue than to
government consumption or social security payments. The positive impact
increases over time (at least up to the time of retirement). For example,
Gustafsson and Österberg (2001) found that upon arrival in Sweden immigrants
did generate a net burden on the public sector budget, but this was reversed
after a few years. Refugees initially put a larger burden on the public sector
budget, but the difference with other immigrants declines over the years.

The main cause of the positive net impact is the age profile of immigrants.
They tend to be relatively young, and often also single. Given the very strong
links between age and the major public expenditure items of health and
education, immigration tends to increase education expenditure and lower
health expenditure, with the net balance being a reduction in total expenditure.

However, it is important to take a lifecycle perspective rather than a single
year or ‘snapshot’ perspective. Studies of the latter type (such as Nana et al.
(2003) in New Zealand) are misleading because they do not take the lifecycle
of migrants and their offspring into account. Lee and Miller (2000) note that
“the only meaningful calculation is longitudinal, tracing the consequences of an immigrant’s arrival through subsequent years, and taking full account of all the
immigrant’s descendants” (p.351). Taking such a longitudinal perspective, Lee
and Miller (2000) find with US data that the Net Present Value of the fiscal
impact of an additional immigrant (i.e. the marginal net fiscal benefit) starts
out negative, then turns positive within the first 25 years and keeps on
increasing from then on.

Social Security, Medicare, and Medicaid are the most financially ruinous federal government programs. It is impossible to determine whether immigrants are a net plus or a net minus without looking at their impact on those three programs in detail.

When the day laborers started there about three years ago, there was a golf store three doors down from the 7/11. It closed two years ago because do golfer is going to walk pass 20 Hispanic loiters to get to get.

Since when are cartball players willing to walk, period?

The logical coutcome of all this is the destruction of the white middle class. Which certainly seems to be the plan.

This analysis is weak. Someone else already pointed out the average cost fallacy. I would add that you're operating as if the fed gov got most of its spending money from personal income taxes, which also turns out not to be the case. Lastly, even if you could show that a minimum wage worker is typically a net negative (which I expect is true, though you haven't shown it), you would need to estimate the distribution of incomes among illegal immigrants and the rate at which they were able to move into higher-paying jobs. Not fair to assume they all make the minimum wage or will continue to do so.
And I'm actually against unskilled immigration. But with arguments like this the opposition doesn't even need to construct their own straw men.

Wow, a bunch of nonsense economists--the same ones who try to tell us that 800 billion dollar a year trade deficits are okey-dokey--disagree with a simple, straightforward economic analysis of the illegal alien nightmare. Yes, all the other economies who have trade surpluses are weak and in trouble, while we who consume far more than we produce are strong, strong I tell you! Nonsense. Of course these people are caosting us far more than they give. We all know it.

YOU LIVE IN A LAND OF THEORY! The general public knows quite well that the illegal aliens take far more than they give in this country. In fact, the government makes it that way in order to attract them here. That's why the border is wide open. The government wants them here!

Libertarian atheists and their nonsense theoretical economics. What a joke.

Your premise is wrong: the immigrants don't cost anything because it was the taxpayers themselves that demanded the welfare state that they pay for. It is the mostly white taxpayers that are screwing themselves, not the immigrants, who would still work without all the government programs.

One of the unmentioned problems about illegal immigration of the lower classes of Mexico and Central America is that the supporters of the welfare state are counting on these people and their progeny to ensure its survival. Ultimately, racially and culturally diverse societies tend to be unfriendly to welfare states, but I don't expect the transition to be pretty. Shouting "you're a racist" at anyone who questions the acceptance of a new underclass probably won't work forever.

I'm willing to bet that the Welfare statists are correct in assuming that the illegals won't become small government classical liberals anytime soon. The governments they're fleeing are wonderful, aren't they?

Mu

None of these individuals is well informed on the issue of immigration economics. It is rare that any of these people, when discussing immigration, even cite any numbers for their case. I recommend George Borjas if you want a well-informed immigration economist.

Sorry, my last comment got chopped somehow. I was referring to the economists mentioned by Half-Sigma.

Autistic Libertarian Alert:

Your premise is wrong: the immigrants don't cost anything because it was the taxpayers themselves that demanded the welfare state that they pay for. It is the mostly white taxpayers that are screwing themselves, not the immigrants, who would still work without all the government programs.

Could you be any more simplistic? Immigrants and their descendants using welfare services (including public schooling) cost taxpayers plenty. At no time did taxpayers demand foreigners illegally enter their country and and make use of services intended for their fellow citizens.

Not fair to assume they all make the minimum wage or will continue to do so.

Even aside form illegal aliens themselves, we know that most illegal aliens' children, grandchildren, and great-grandchildren are not going to be particularly well educated if current stats are any indication. Even fourth generation Mexican-Americans have a 40% high school drop out rate. Less than 10% have any sort of post-high-school education. We also know that they are far more reliant on welfare than white Americans. It would seem difficult, then, to make the case that they are going to cover their own costs.

Interesting link here. Obtained by searching for "immigration externalities" here.

In the future, I recommend you at least survey the economic literature before making a claim like this.

In the future, I recommend you not make the elementary mistake you just made: confusing legal (and often high-skilled, high IQ) immigration with illegal (invariably low-skilled, low IQ) immigration either by combining the two or ignoring illegal immigration.

For example,
Gustafsson and Österberg (2001) found that upon arrival in Sweden immigrants
did generate a net burden on the public sector budget, but this was reversed
after a few years. Refugees initially put a larger burden on the public sector
budget, but the difference with other immigrants declines over the years.

Unfortunately, the authors might want to take their own advice about looking at the "entire life-cycle." Here is a reference to a study from neighboring Norway on where immigrants stand when it comes to welfare dependency:

Ekhaugen’s study shows that after 17 years in Norway refugees become less welfare dependent than non-western immigrants. 50% of the non-western immigrants who settled in Norway in the period from 1966 to 1975 were welfare dependent 25 years later. 60% of the group of refugees who arrived between 1992 and 1996 were still receiving welfare benefits 5 years later, while this was only the case for 36% of the non-western immigrants and 18% of the immigrants from western countries. After 8 years 55% of the fugitives was still receiving welfare subsidies. Of the foreigners who arrived between 1966 and 1985 40% was getting welfare payments after 20 years. For native Norwegians the figure is 27%, but because this group is on average older the difference with the immigrants is even greater than the figures indicate.

Of course, there are more of those pesky externalities that aren't entirely economic here also. Sweden and Norway are experiencing an immigrant gang rape epidemic, for example.

If immigrants overload the system and bring it crashing down, so much the better. And if taxpaying suckers must keep paying, well that is well deserved. The government, local and federal, is a corrupt banana republic, thanks to Republicans and Democrats, not recent immigrants.

Quote: The government, local and federal, is a corrupt banana republic, thanks to Republicans and Democrats, not recent immigrants.


Wow dude, you must not get into Mexico much. As corrupt as the US is, it is still one of the least corrupt places on earth. Political and business assassination, as in the movie The Matador, is standard practice in Mexico today. I'm not exaggerating. I have a friend who fled Mexico when his business partner was gunned down before an important court hearing the next day.

That has nothing to do with whether the US is corrupt, which it is. Try a little logic sometime. I hope the whole edifice crashes and burns, and that I can help it along.

That has nothing to do with whether the US is corrupt, which it is. Try a little logic sometime.

Leave it to a libertarian to argue that more Hispanic immigrants will make America less of a Banana Republic.

I hope the whole edifice crashes and burns, and that I can help it along.

...but don't question his patriotism.

Since when did the "whole edifice crashing and burning" in Latin America ever result in pure libertarianism? Hugo-Chavez-style populism is a more common result. Again, if you think Latin America does it right, why don't you move there?

Would it be possible in this post-modern New World Order age to assemble an army of disgruntled office workers to invade and go conquistador on Mexico (or in any third-world country)?

It looks like this little girl may have been killed (and God knows what else) by an illegal:

http://www.foxnews.com/story/0,2933,289165,00.html

(I say may because he hasn't been convicted yet, but...come on...he told them where her body was.)

I don't know if WND is a reliable source or not, but reading different blogs about this poor girl I came across this link:

http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=53103

If those numbers are any where near accurate, what are we doing?

I have friends in LAFD and LAPD. Their constant complaint? That the jails are filled with illegals, and they are constantly being called out to help illegals. Far more than citizens. What's the burden on our police and fire departments from illegals with no health insurance, and does that burden put citizens at risk in addition to taking their tax dollars?

Also came across this link on illegal alien criminals and gangs:
http://www.city-journal.org/html/14_1_the_illegal_alien.html

How much time do police spend trying to deal with illegal alien gang bangers? How many other crimes go unsolved because of this burden? I have to say, the thought that gang bangers can be deported after serving time and waltz right back into my country makes me sick.

I'm sick of cost/benefit arguments. We're talking about lives here. People mugged, beaten, raped, killed. Children molested. Because we have no control over our borders we are allowing criminals to come into our country at will and rape our population and system. And then come back for more after they've been released from jail and deported! If they are even deported after getting out of jail. (The illegal in the first link, a convicted child rapist, was never deported.)

U.S. citizens have the right, and their government the duty, to decide who gets let in and who gets turned away. That's not racist or racial discrimination. We should be able to set the max number, and choose who comes in. NO criminals should be entering this country. I don't think it's wrong to expect our government to stop criminals at the border. Quite the opposite, I think it's sick that citizens are harmed because our government refuses to control the border and filter the criminals. IMHO, that's a blatant disregard for the Constitution and the citizens the government is supposed to serve.

Sorry. I say build a wall, kick every illegal out, then control our borders and ports with an iron fist. Illegal entry should be a crime that prevents the person from ever entering our country again or applying for citizenship in any way. 1st time is deportation and black list. 2nd time - 10 years prison. Hiring illegals on purpose? Lose your business, go to jail for 10.

I'm sick of it. I want it stopped.

Your math is dodgy.

Total government spending includes huge amounts of inter-government transfers. When the Feds give a billion dollars to California, who then gives that money to school districts, that gets counted as 3 billion in "total spending at all levels of government", but requires only one billion in tax revenue (or deficit spending).

Not all tax revenue is personal income taxes (including social security and medicare taxes). Everyone who employs illegal aliens does so to increase their profits; this results in higher corporation taxes paid. Illegal immigrants spend money on items subject to sales tax, and increase the demand for housing, driving up real-estate prices and thus property tax revenue (outside California).

Lastly, do a sanity check. You claim that the average illegal immigrant worker costs $26,000/yr. How many working Americans pay $26,000 in taxes? Probably less than half of them, even if you add up their total tax bill.

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