Governments and non-governmental organizations around the world apparently have promised more than they can deliver to the citizens and voters.
For the United States, John Mauldin says that we must open the borders to allow more people to immigrate. Unfortunately, the policy conflict between opening the borders and maintaining a war against terrorism is glaringly obvious.
More immigration can create more revenue for Social Security and Medicare. Obviously, the U.S. Government is allowing immigrants to enter the U.S. However, it seems a deceptive way to make amends for the unsustainable promises made by our leaders.
Link: A Conversation with John – Thoughts from the Frontline Weekly Newsletter – John Mauldin
Demographic changes are predictable: we know how many people are going to be here in forty years because they’re already born. We know how many forty-year-olds we’ll have in forty years because they’re already born. So, we can see these changes coming at us.
If you’re Japan, you’re walking into a demographic nightmare. Russia is a demographic train wreck. And it’s not going to be but a few decades, in the grand scheme of things, until Iran will have more people than Russia. That’s got to be fit into your equations. You’ve got to look at these large, broad changes that are happening.
In the US, we’re going to be running into the freight train of Medicare and Social Security. There’s just not any way to get around it. We’re going to have to make tough generational decisions about how to handle that. And how we handle it is going to have enormous implications for our economy. If we handle it the way it’s likely to be handled – which is by raising taxes – then we have said we’re making a decision, conscious or not, that we’re going to become Europe. That means high residual unemployment and difficult, slower growth of individual opportunities.
There are other large changes when you talk about the demographic issues. Europe would have to take massive numbers of immigrants in order to support their system. They’re just not prepared for that. Neither is Japan. The US is blessed with a world population that wants to come here and are not very culturally different from us – especially the Hispanic populations. We’re going to need those immigrants. I think that one of the most economically suicidal things we’re doing today is trying to figure out how to close the borders. We need to be doing the opposite. We need to figure out how to open the borders. It needs to be a more rational policy than we have now. Again, you have to put those things into the financial equations.
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