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May 09, 2013

David Frum Is Going to Rock Your World on Immigration

Wait, what? Sarcastically, right?

No seriously. I have to break embargo here because his piece is very good and there is no fair way to excerpt it without a link.

Unless you posit that the newly legalized immigrants will dramatically outperform the existing immigrant population, you will reach a result very like that of the Heritage Foundation: that the taxes paid by the newly legalized will not begin to equal the costs of their Medicare, Medicaid, Social Security, and other benefits.

(The Wall Street Journal is trumpeting a letter from the Social Security Administration declaring that the Senate bill will have positive effects on the solvency of the retirement program. But in a really shabby piece of misleading reporting, the Journal's lead paragraph refers to the program's "long-term solvency" and waits until paragraph four to note that this "long term" extends only to the program's next ten years - long before the vast majority of the newly legalized will become eligible for benefits! The SSA promises in its letter to provide a 75-year accounting somewhat later. I can well imagine Senator Rubio urging them, "take your time, take your time.")

Let me put this in boldface: Heritage's cost estimates are driven not primarily by welfare, but by healthcare. Every newly legalized immigrant, no matter how ambitious and hard-working, will get old. When he or she gets old, he or she will qualify for Medicare. Medicare is very, very expensive, and getting more expensive all the time. Fewer and fewer Americans - whatever their ethnic origin - pay enough in taxes to cover their predicted future health care costs. Inevitably, Medicare is becoming a more redistributionist program. People on the left get this point when they scoff at the imputed Tea Party slogan, "Keep your government hands off my Medicare." Why do they forget the point when they speak of immigration?

He then gets into the objections lodged by the pro-low-skilled-labor-pool right -- those who say but you haven't measured the effects on the economy.

No. This analysis measures fiscal effects, budget-related effects. The government's budget is not the economy -- not yet, anyway, though we are getting close to that. And this amnesty would bring us closer to that.

Those who claim that bringing in a lot of low-skilled, low-income workers into our social safety net will actually pour money into the safety net have to answer one question: In what country, anywhere, are the poorest citizens net-payers into the government's fisc?

It's ludicrous. It is no knock on poor people -- no slight to their humanity -- to note the obvious fact that the poorer a person is, the less he pays into the government (lower taxes, if any at all) and the more he takes out of it (needing more frequent use of welfare, foodstamps, unemployment insurance, and, of course, Medicare and ObamaCare).

You are either stupid or lying if you claim that adding 20 million fairly poor people into our social safety net is actually a net fiscal winner for the US taxpayer and treasury.

As DrewM. has noted, it's not as if the country wants for poor people. If poor people are the Gateway to National Prosperity, why bother training people to have more in-demand skills at all? After all, since poor folks are the key to a government fisc overflowing like a cornucopia filled with cash and stock options, we shouldn't "invest" any resources in skill-training or education. We should just endeavor to produce as many poor folks as possible, and, as DrewM. says, "let the good times roll."

Larry Kudrow demands that the Heritage report add "dynamic scoring," a demand Frum himself rubbishes. I'll direct you to his article; I don't want to restate what he wrote.

But I'd add this thought. "Dynamic scoring" is the notion that as policy changes, so too does economic performance. That is, you can't change policy and expect the country will be precisely the same. Changes in policy create changes in life as actually lived. Thus, Kudrow argues, we must take into account the effects of this policy on our economy.

Okay. But I've got another idea about dynamic scoring myself. If the idea is that we want to properly forecast the effects on the economy due to a change in policy, let's talk about all of it.

Because illegal immigrants are in fact illegal and not entitled to welfare, ObamaCare, etc. -- all the free gifts to the poor of government -- they have to work. And, everyone says that illegal immigrants do in fact work rather hard. Most people praise them for that.


What happens when they don't have to work anymore? What happens when Daddy Government tells them he's gonna provide for them working or not?

Are they still going to be working quite so hard at hard manual labor and unpleasant jobs like working in a slaughterhouse?

As Larry Kudrow is keen to account for changes in behavior attributable to a change in policy -- as he insists on the "Magic Asterisk" of dynamic scoring (Frum's term; a fudge factor, a guess) -- let's factor the dynamic change to work ethic effected by now having the overflowing cabinet of the American dole opened to one.

digg this
posted by Ace at 07:44 PM

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