Reality 101: How to Create an Immigration Depression

[The following is an portion of a column by John Mauldin in Frontline Thoughts. Info on subscription is at the bottom of this page. While the political season could also be described as the silly season, there are serious issues that need to be addressed... seriously. While many Realtors absolutely will not include any political commentary (ever), I sometimes will. That's why it's called The Real Blog.]

How to Create an Immigration Depression

The call by Huckabee and others to deport 12,000,000 illegal immigrants is simply economic suicide. It would create a depression (not just a minor recession) in short order. Let's reduce productivity by 10-15%. Let's reduce consumer spending by 7-8%. Shut down hundreds of thousands of businesses who could not get workers they need. Who will pick the crops? Or do any of a hundred jobs that Americans don't want to do? It would drive up labor costs and create inflation. It would be a disaster of Biblical proportions.

Now, I am all for controlling the border. I want to know who is coming in. But we have to deal with reality, and the reality is that we need those workers who are here. The economy simply will not function without them. You can't send them home and then tell them to apply and hope they can get back in, and then expect business to function as usual. It will take years for a bureaucracy to handle the paperwork.

Go ahead. Close the borders. Find out who is here illegally and make sure they do not have a criminal record. If so, they go. The rest need to get documented, and we need to radically increase the number of immigrants we allow (after we control the borders!), especially educated workers who can help us build our knowledge economy.

And yes, this is amnesty. That is the cost of not controlling the border all these years. Nothing we can do about it, unless we want to shoot ourselves in both feet just to prove a point. Sounds rather dumb to me.

The great irony is that within ten years we are going to need even more immigrants to replace retiring boomers, as well as to pay into social security and Medicare programs. We are going to be competing with Europe for those immigrants. We need to get a head start.

And yes, it is a lot more complex than this quick analysis. But pandering to voters who for whatever reason want to stop illegal immigration by throwing out everyone who is here illegally is not the answer. Establish fines, require documents, whatever. But recognize reality and stop telling voters what they want to hear when your policies simply cannot work and will be destructive.

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John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

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