Friday, January 25, 2008

Immigration and the baby boom

Two of the big debates that resurface every time there's an election are immigration and Social Security. Everyone seems especially concerned that Social Security will face difficult sustainability concerns, particularly now that the "Baby Boomers" are reaching retirement age. There are figures and documentation that show how drastically the system has changed over the years-- the ratio of taxpayers to Social Security recipients has practically inverted since the program's inception. Naturally, there's a question about whether we can continue to pay everyone the rates we are with much fewer taxpayers on the other side of the ratio.

In a different (seemingly unrelated) discussion, immigration is a perennial concern. Most people who promote tightening immigration restrictions seem to argue one (or both!) of two sides: either the concern is that an increase in immigrants will result in great upsurge of welfare, Medicaid, and Medicare recipients, or that the immigrants will rob existing citizens of jobs-- especially low-wage ones. I even recall hearing both arguments made by one politician at the same time, which could be contradictory since wage-earners are often not the primary recipients of social programs.

I was talking with Russ Campbell this morning, and I echoed
the sentiment that my friend Jon once mentioned, wondering why no one ever thought another baby boom would solve the Social Security problem. After all, if the problem is essentially not enough taxpayers, one obvious solution seems to be to increase the number of taxpayers! As Russ and I talked about it, we had the thought (mostly Russ's) that one benefit a looser immigration system would bring would be an instant increase in the number of taxpaying citizens. Welcome to the United States!

Obviously there would need to be some restrictions, particularly for older immigrants-- but these are largely already in place, since no current citizen is vested until they've paid into the system for 10 years. And you (allegedly) get back something in proportion to what you contributed anyway; that's why we get those statements every so often that remind us
how much cash we've dumped down a hole how much we've contributed to our retirement future.

Would this work? I'd love to hear feedback on why this idea shouldn't be some candidate's winning ticket to the White House this year...

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