3Illegal Immigrants Appear to Be Helping the Economy
What You've Heard:
You've heard the argument from political demagogues and your racist uncle alike -- every year, thousands of illegal immigrants pole vault over the southern border and run free in these United States, feeding off the government teat. Once here, not only do they take jobs from honest, hard-working Americans, but they also suck all the money out of social services and don't pay taxes. It's obvious that, if we ever want to get out of this economic slump, we have to round each and every immigrant up, ship 'em all back to Mexico (even the ones that didn't come from Mexico), and fortify the American border with lasers and electric eels.
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Also snake cannons. Halliburton's heavily invested in rattlesnakes.
But Actually ...
The idea is that these impoverished people cross over, live off the grid, and soak up America's precious tax dollars. But actually it's estimated that illegal immigrants pay $15 billion a year into social services and only take $1 billion out of it. Social services actually relies on illegals' taxes to help the system remain solvent.
How the hell is that possible? Well, for one thing, you can't exist in America without paying taxes -- just by living here and buying things, you're paying sales and property taxes. It's true that some immigrants aren't paying income taxes (in America, if your income is low enough, you aren't paying taxes anyway), but somewhere between 50 percent and 75 percent are. On the other hand, very few illegals are able to benefit from Social Security because it's really hard to get it without a legitimate Social Security number.
"I'm sorry, sir, but 'four' is not an acceptable Social Security number."
And then you have the "they're taking our jobs" narrative, but for the most part, illegal immigrants are taking jobs that Americans just won't do -- farmers who want to hire Americans are often unable to find people willing to do the work. In Alabama, after they enacted tough new laws to drive out the illegal immigrants, the poultry industry went into crisis because legal Americans would rather be unemployed than spend their days carving up chicken parts.
Then there's the argument that illegals drive down wages, because they're basically willing to work for peanuts, right? Well, it's true that illegal immigrants lower wages somewhere between 0.4 percent and 7.4 percent for low-skilled workers, but for the rest of America, there is virtually no impact on wages. In fact, immigrants actually increase the income of American families a small amount. By taking on the grunt work that Americans don't want to do, immigrants free up skilled workers to do more of the work that they're paid higher wages for.
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Like "gold coin shirt screamer."
Boil it down, and the majority of economists agree that illegal immigrants have a net positive effect on the economy. Which seems hard to argue against -- if they're "taking our jobs," it means they're working, and getting paid, and spending that money. That isn't bad for the economy -- that is the economy.
But while we're stepping into hot-button issues ...
2Deficits Aren't Always Bad
What You've Heard:
It's a simple principle -- if you make $2 and spend $5, then you are $3 in debt and need to tighten your purse strings, Spendy McSpenderson. But Obama and Congress must have been four hours into a rampant coke binge when this very simple concept was explained to the rest of us and they can't seem to get it through their heads. We're in a recession, and yet they still choose to run deficits, because they're big-spending nanny state socialist wackjobs.
"Bring me two espressos, and on your way back, make it illegal to dance in Montana."
But Actually ...
The big problem when trying to understand deficit and budget stuff is that everyone wants to compare it to their own household budget (a favorite tactic of pundits). It's understandable that people want to try to simplify the issue, but this is one of those times when simplifying makes it wrong.
While it seems absurd to think that a country, a business, or anyone else can "spend their way out of hard times" (because it sounds like a drunk spending more money on gin in order to forget the problems caused by yesterday's gin), for every government, running a deficit is just something they have to do when the economy is bad in order to keep it from getting worse.
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"Hey, buy your ol' lady somethin' nice, eh? It's on us."
It works like this: When the economy goes into recession, people obviously have less money. That means the government has to cut taxes to give people a break. That means less revenue, and on top of that, the government has to spend more on unemployment benefits, food stamps, and such because a lot more people need them now. So basically the government has less money and higher bills. And you want the government to keep spending that money, not because we're all communists who want to be enslaved by Big Brother, but because that spending helps the government to stabilize the downfall.
The biggest problem with an economic downturn is the potential for a death spiral -- you lose your job, so you don't have money to spend at McDonald's, then McDonald's closes and all those people lose their jobs, then they don't have the money to spend at the grocery store, then it closes, etc. The government, however, can use its borrowing power to break that chain reaction -- you lose your job, but you have food stamps, which you spend at the grocery store, so it doesn't have to close and its employees can keep drawing paychecks. That way you don't get into a situation where everyone is out of work at once -- you keep things afloat until people can find work again.
Then once things have turned around -- and this is key -- you start paying those deficits back. Oh, look at this -- the U.S. deficit has been slashed by a third just over the last few months. How about that.
Mandel Nagan / AFP / Getty
"Nothin' but net. And sound fiscal policy."
But the point is, this is why the political arguments about the deficit tend to be somewhat full of shit -- it's not a war between the hard-working private sector and the evil oppressive big government. It's about how much money the government should pump into the private sector to keep it afloat, and how much debt it can take on.
Which finally brings us to ...