Editor's Note: This is the fifth of a six-part series by Matt Horween, CPA, FSO (retired). The previous columns were Iran, Pakistan Biggest Threats, Political Class Choking America, Bring the Troops Home and Fix America First.We have a few new religions in the U.S. They are the belief in free trade, growth, and immigration is always good. All of these new religions have new converts who are most fervent in their propagation of their new faith. In fact, the converts are so ideologically and money driven that it is impossible for anyone to change their minds, and they do not have to change their minds because they own Congress and the president lock, stock and barrel. We have the quaintest immigration and citizenship laws in the world. We are among the last of nations to grant birthright citizenship to anyone who happens to be here when they are born to non-U.S. citizen parents. We also radically changed our immigration laws over 30 years ago to make up for a preference toward European and or white immigrants as opposed to immigrants of all colors from other parts of the world. We even put in a lottery system where we issue about 50,000 green cards to anyone who applies at our consulates around the world, and we then pick them in a lottery that year. We have even picked some lovely terrorists this way. The bottom line is you can be sleeping on the streets of Mumbai one day and a happy resident of New York City the next day. We also allow into the U.S. people with very serious diseases that immediately become a burden on our health care system.
There was a recent case where the New Zealand government gave permission to an Englishman to immigrate to New Zealand for employment but the New Zealand government denied permission to his wife to immigrate because they said she was too heavy and would become a burden on the health care system. New Zealand is a very liberal and socialist country, but it seems to have a sense of fiscal survival. In California, people who enter our country illegally get heart transplants and liver transplants at the expense of the citizens of the state, and in some cases, this can result in the death of an American citizen who cannot get a donor organ. In addition to the infamous outsourcing that our public and private employers do to save costs, we have used work visas to develop a huge in-sourcing of labor from around the world. Microsoft Chairman Bill Gates and many other CEOs who supported President Obama in the election want the government to issue unlimited work visas so they can import cheaper labor that they say is not available in the U.S. President Obama wants to give amnesty to the 12 million to 20 million illegal immigrants in our country now, and he and Ms. Pelosi want to double legal immigration quotas. Why do we need so many new immigrants every year? One reason expressed over the years by many in Congress was that we needed many new workers to replace retiring baby boomers in the Social Security system. However, Congress worked out a deal to give an earned income credit to lower-paid employees when they previously tried to fix Social Security and raise the minimum wage. In effect, the earned income credit returns most of the Social Security tax to the employee. It also has the effect of making more and more people exempt from paying any income tax, which allows Congress the opportunity to raise taxes more easily because it affects fewer and fewer people.
OK, we need new immigrants to go buy things, which is the American way to prosperity. It also means we need new schools, teachers, stores, roads, health care, electricity, gas, oil and houses. It also means that state and local governments have to raise more tax revenue to provide services for the new immigrants. However, right now almost every sanctuary state for illegal immigrants is broke, including California, Illinois, Florida, New Jersey, New York and Nevada. It seems that as we have been bringing in immigrants of all kinds, we have been ratifying trade agreements of one kind. We have been ratifying one-way trade agreements where the other party can sell us anything they want, and we are blocked one way or the other from selling them much of anything. The result: a massive negative trade deficit with almost every country with whom we have a trade agreement. For a while, we were absorbing all of our immigrants both legal and illegal. We were so happy building homes that even an illegal immigrant could buy with nothing down and no payments for one year or choose a pick-and-pay mortgage or a teaser 1% mortgage. The system worked very well for a time. Local government loved the sales taxes from the homebuilding and the buying of anything by immigrants, and the auto industry helped with zero rate loans and subprime auto loans. Easy Al Greenspan helped with super-low interest rates and no bank regulation.
The housing bubble created massive property tax increases that local government wasted on all types of fringe benefits, excessive hiring and salaries and pensions plus massive local government service programs. Things were just so good here until they were not good and then they were terribly bad. Now we are losing only between 300,000 and 400,000 jobs per month. President Obama says this is a vast improvement, so he will now push to grant amnesty to all illegal residents and go forth to give Bill Gates and the Chamber of Commerce what they want, which is unlimited work visas and double the number of current green cards per year. Is there anything wrong with this picture? President Obama said he would not sign any bills with earmarks, and he did sign one right away called the stimulus bill. He said he would not hire lobbyists, but he has. He said he would not allow other countries to abuse their free trade agreements with us but he has done nothing to level the playing field. Do not despair, because my next installment will fully explain how we can rectify all of these problems and grant amnesty to illegal residents who can read and write English and perhaps allow our legal immigration to rise. We also can eliminate the horrible lottery that is not needed any longer since we have a rainbow society and more than enough poor people and high school dropouts to last us for at least one business cycle. Stay tuned because an answer to our problems is coming soon.