More Immigrants Could Fix Entitlement Mess
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Why More Immigrants Are An Answer to the Coming Boomer Entitlement Mess
was born in 1946, just when the boomer wave began. Bill Clinton
was born that year, too. So was George W. So was Laura Bush. And Ken Starr (remember
him?) And then, the next year, Hillary Clinton. And soon Newt Gingrich (known
as "Newty" as a boy). And Cher. Why so many of us being born in 1946?
Simple. My father was in World War II. He came home. My mother was waiting.
Ditto for the others.
Sixty years later, we boomers have a lot to be worried about because most of us plan to retire in a few years and Social Security and Medicare are on the way to going bust. I should know because I used to be a trustee of the Social Security and Medicare trust funds. Those of you who are younger than we early boomers have even more to be worried about because if those funds go bust they won't be there when you're ready to retire.
It's already starting to happen. This year Social Security will pay out more in benefits than it receives in payroll taxes. The tipping point came sooner than anyone expected because the recession has kicked so many people off payrolls. But it was coming anyway. And it adds new urgency to reforming Social Security - a task the president's commission on the nation's debt is focusing on.
So what's the answer?
Fed Chair Ben Bernanke this week listed the choices. "To avoid large and unsustainable budget deficits," he said in a speech on Wednesday, "the nation must choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above."
Bernanke is almost certainly right about "some combination," but he leaves out one other possible remedy that should be included in that combination: Immigration.
You see, the biggest reason Social Security is in trouble, and Medicare as well, is because America is aging so fast. It's not just that so many boomers are retiring. It's also that seniors are living longer. And families are having fewer children.
Add it all up and the number of people who are working relative to the number who are retired keeps shrinking.
Forty years ago there were five workers for every retiree. Now there are three. Within a couple of decades, there will be only two workers per retiree. There's no way just two workers will be able or willing to pay enough payroll taxes to keep benefits flowing to every retiree.
This is where immigration comes in. Most immigrants are young because the impoverished countries they come from are demographically the opposite of rich countries. Rather than aging populations, their populations are bursting with young people.
Yes, I know: There aren't enough jobs right now even for Americans who want and need them. But once the American economy recovers, there will be. Take a long-term view and most new immigrants to the U.S. will be working for many decades.
Get it? One logical way to deal with the crisis of funding Social Security and Medicare is to have more workers per retiree, and the simplest way to do that is to allow more immigrants into the United States.
Immigration reform and entitlement reform have a lot to do with one another.
Open Article On Originating Site
Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," and his most recent book, "Supercapitalism." His "Marketplace" commentaries can be found on publicradio.com and iTunes.
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Comments
#1 He claims immigrants are young. Work has shown that the average of immigrants is only slightly lower than the average age of the US population. As an example, my mother in law first came into the USA at age 83. Never paid into Soc.Sec but she was ready to get SS Benefits.
#2 Immigrants coming to the USA are overwhelmingly poor. Two weeks ago I sat 4 (four) feet from Alejandro Mayorkas, the director of USCIS and heard him say that he did not want to riase processing fees on immigrants (even though USCIS needs the money) as so many of them are poor. That means that many new immigrants are getting subsidized from day one. Don't plan on those people supporting you. They can't even support themselves.
Not only will the Fair Tax provide the funds to rescue Social Security and Medicare; it will revive the economy and bring back most of the jobs that have fled overseas to avoid the onerous burden placed on U. S. manufacturers by the IRS and its income tax. It will also bring back to the U.S. trillions of dollars now languishing in overseas tax shelters. It will create a renaissance and a boom in this country that may result in a real need for immigrant workers!
We have suffered through the worst redistribution of wealth from the work force to the executive suite and the stock holders since the robber barons of the late 1800's. So why are the working poor so willing to stand up for the bosses who are ripping them off!
It reminds me of a quote from "1776", John Dickenson, the leader of the opposition to independence said, "most men would rather hold onto the dream of being rich than face the reality of being poor..."
If you want to be conservitive then lets go back to the "Happy Days" when we taxed thoes who could afford it, we had a state of the art infrestructure and a GI bill that took care of our vets. Back when we had a swelling middle class and life was always getting better.
There is also the simple truth that the USA is running lower and lower on water as time goes on, and the human population needs to diminish, not increase. It won't matter if someone is born here or is an immigrant if there isn't enough water for them.
But water availability and control remains a huge issue. Here in California, our politicians have bought in to a new Peripheral Canal that will simplify the theft of our water by our psychopathic billionaires to be sold to the highest bidder or just stockpiled as they are doing with energy supplies. I'm already imagining fire season where our impoverished state must buy water from the monopolizers and of course cut more funding from schools and health.
What does the FAIR tax consist of?
1.Higher progressive taxes for the rich.
2.Higher taxes on Wall St trades and hedge fund manipulators and offshore corporative shenanigans.
3.No more useless, shameful wars. Reinstituting the draft will help.
4.Nationalize the major banks
5.Instituting universal health care which will save billions.
5.Higher retirement age (work is healthy)
It's just the opposite. Those who use false Social Security numbers pay into Social Security and never get a penny in return. They add a huge amount of money to the fund that the rest of us use! In addition, all these people pay income taxes, and also they pay sales taxes when they purchase things, and property tax to landlords when they rent, or directly when they purchase a house. Would you rather ship a job overseas where no taxes or purchases go toward our economy, or at least get something from the workers who live here -- with or without papers.
We are beating the poor over pennies while our pocket are being picked by the rich!
Keep people OUT of the US, and start shrinking our bloated overpopulation.
The drive to cheap consumer goods and to ever larger houses in which to store them is what has done us in.
We should be able to invest more into social security in order to get more back out, instead of having to go to the equity market. Equity investing by the masses has been a huge contributor to the dissolution of the laboring middle class, because if equity driven companies feel that their primary responsibility is to stockholders, they will continue to move their businesses to the sweatshop companies in droves.
It is through this that the Chinese are beating us without weapons. Buying from Walmart damages this country more than 9/11 ever did!
SS was invented so old folks won't die in the county poorhouse. But the way the U.S. is regressing on social policy --- more people will be have to stay working beyond retirement like the Boomers are facing now --- the soon-to-be amnestied immigrants will be working for slave wages and not entitled to "liberal" social security dollars.
Undocumented aliens do not contribute to social security since most work underground and pay no taxes whatsoever. They do send their kids to public schools and use the emergency medical facilities (that must raise their prices for the rest of us who may require medical care).
They also send most of their earnings to their impoverished families back in their country of origin, thus depriving our economy from the boost that spending money within this country would generate.
Wouldn't it be more effective and less costly for our government to simply assist other nations to develop their own economies and thus provide decent incomes for their citizens rather than export their surplus population to this particular impoverished American nation?
Assistance need not mean "send money". Instead, send "new policy". One reason economies south of the border are in such disarray is US intervention, financial, political, and military. Some candidates: Close the School of the Americas, which supports dictatorships and terror campaigns. Renegotiate trade deals that cause high paying jobs here to become subsistence jobs in transit abroad. Stop our "war on drugs", which creates criminals, cash and immigrant incentives.
Most immigration should be discouraged--by discouraging unwholesome policies. Immigrants--especially illegals--ought to be seen for what they are: victims, forced into a personally wrenching, but certifiably rational choice.
So who benefits from this nonesense? The wealthy of course, whose greed exceeds any semblence of patriotism, of course.
And yes, that criminal institution, the School of the Americas, needs to be completely destroyed.
Lastly, again you are right about the war on drugs. Massive shipments of drugs come here and massive shipments of weapons go there and everybody gets hurt. There simply is no policy sanity in the war on drugs when safe, effective and economicly sound alternatives abundantly exist.
Jack Lohman
http://MoneyedPoliticians.net
Legalize more immigrants as our economic salvation? Tell it to the millions of U.S. high school and college grads who have only low-wage service jobs available to them.
But I agree with Brynn that we need a higher quality immigration, and not just those slipping over the border for a better life.
Jack Lohman
Your point (and Reich's) that continued population growth is good and necessary for our way of life is the one I have a hard time with. If it's really true that our way of life depends on having more people to replace us when we die (and not just the same number, but real population growth) then aren't humans doomed within a few generations, when we physically run out of space and food?
I am sympathetic to immigrants and to other arguments for letting them in, but to let them in just to pay for our SS benefits seems really short-sighted. They will in turn need yet more people to pay for theirs. To me it seems better to let the population explosion tail off. We would deal with the ensuing budgetary problems by borrowing, raising taxes, and limiting benefits. That's of course painful, too, but from my non-expert point of view, it's less painful to have the buck stop at our generation than to saddle the next with the burden of coming up with more people.
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