Avoiding GOP Immigration Reform Self-Sabotage, Pt. 9: The Lure of $$$

By Stanley Renshon on June 30, 2014

If there's one thing that Democrats, Beltway Republicans, and their supporters agree on it is that immigration is good for America's bottom line.

Larry Kudlow makes that case in National Review as follows: "The dynamic idea is that immigration significantly increases the size of the U.S. labor force, and that more workers mean more growth."

He then goes on to quote former acting CBO director Donald Marron: "The direct economic effects of expanded immigration — bigger population, bigger workforce, more wages — were so straightforward, that folks accepted this exception from the standard [static] protocol."

According to Kudlow, "At a time when the U.S. labor force has stopped growing, and anemic economic growth has become the new normal, now is the moment to promote pro-growth immigration reform."

He presents the economic consequences of more and more immigration as quite straightforward and, without exception, additive and costless. More new immigrants mean more new workers. More new workers mean more wages added to the country's GNP. More new workers earning more new wages result in more tax revenues for the government. And of course, with all of those new revenues, the government deficits will be reduced.

It sounds wonderful. All we have to do is keep adding more and more immigrants, above the million-plus who gain legal permanent residency each year and our economic problems will be solved. GNP will be guaranteed to rise every year. Government revenues will increase every year and those trillion-dollar deficits will melt away, by one estimate by more than $2.5 trillion should immigration "reform" pass.

And Kudlow reminds us:

[L]et us not forget the economic benefits of opening the door to more brainiacs — foreigners who will boost American technology by filling engineering vacancies. Then there are the immigrant students who get advanced degrees at our best universities. They'll make enormous contributions to economic growth and innovation if we let them.

And if we're talking 50-year periods, the next Google or Apple or Amazon can employ so many and pay such good wages — creating massive wealth through capital and consumer goods — that the economic dynamism of new immigrants could cover all the costs of immigration reform and then some.

So there you have it. More and more immigrants of every kind will economically revitalize and rescue the United States, which can look forward to unimpeded economic growth and prosperity.

It sounds almost too good to be true. And, alas, it is.

Like many other too-good-to-be-true promises, the emphasis on the magical economic properties of even larger-scale mass immigration attempts to gain our support by presenting only one side of a decidedly more complex economic picture, and by ignoring the non-economic elements of immigration policy.

A wag might term this the free-lunch economic theory of immigration reform. But beyond any mocking this view might legitimately deserve, there is a serious question of analytic integrity.

Promoters of the free lunch theory include many people who probably do know better, and others who ought to. And in their silence about the diverse reality of the narrow "truth" lies their misrepresentation.

Next: The Myth of Economic Cost-Free Immigration, Pt. 1