What if illegal immigration isn’t a border crisis – but an economic strategy? Whole nations have profit-ed from America’s open-door policies. Brandon Smith of Alt-Market.com explains how this trend will lead to further economic disruption…
Tensions over mass illegal immigration in the U.S. are finally coming to a boil after 4 years of open borders under the Biden presidency and six months of obstruction by Democrat politicians and judges interfering with deportations. Today I want to examine how we got here in the first place and why so many foreign governments are so intrusive when it comes to U.S. immigration policies.
Think about it for a moment and ask yourself: Why is the rest of the world in our business?
Why do they care if we have tighter controls on borders and stricter vetting for immigration?
Why don’t foreign governments also complain about strict Chinese immigration standards, or Saudi Arabia’s standards, or even Australia’s standards?
Why does everyone else think they have a say in how America handles immigration?
There are, of course, ideological agendas at play here, but I believe the primary reason for foreign meddling is economic. Specifically when it comes to Central America and South America.
Illegal immigration is an economic issue
I’ve covered these issues briefly in the past but I think it bears repeating that the U.S. is widely considered a kind of global buffet, or a wounded gazelle that the entire jungle shows up to take a bite of.
We’re the cash cow of the planet ready to be milked. American taxpayers pay for the entire world. Not only that, but pay for the inflation created by every dollar printed and circulated to fill the pockets of foreigners.
This is the enduring curse attached to any country “lucky” enough to maintain world reserve currency status. When the Bretton Woods agreement was put in place after World War II there was an unspoken but clear trade-off, a devil’s bargain attached to the dollar’s ascension.
First, Americans were going to have to pay the vast majority of defense spending in the new international order (which would ultimately become NATO).
Second, America was gifted the ability to print dollars with wild abandon while mitigating hyperinflation by exporting dollars overseas to foreign banks and corporations.
However, the expectation was that the U.S. would share the wealth and feed the coffers of other countries through various subsidies, foreign aid and perhaps even open immigration.
The question is, how does mass immigration play into this arrangement?
The economic and social steam valve
Using Mexico as an example, we can see some obvious economic advantages for foreign governments if U.S. immigration policies remain unenforced.
Mexico has enjoyed an exceedingly low unemployment rate for several years, not just because untold numbers of U.S. manufacturing jobs have been outsourced to the south, but because Mexico has the option of encouraging their unemployed citizens to sneak into the U.S.
This serves a couple of purposes.
It allows Mexico to maintain low unemployment. It saves them loads of cash when it comes to social welfare programs (they can send their poor to the U.S. where American taxpayers foot the welfare bill). And, in terms of crime and civil unrest, Mexico can relocate their own discontented rabble over the border and let the U.S. deal with them instead.
The same goes for most of Central and South America. The benefits are just too numerous to ignore. The more open the U.S. border is, the more every country near us stands to gain.
Immigration as economic extortion
Most readers might not remember, but under the Biden Administration there was a concerted effort to spin the immigration crisis as a problem of financial instability and humanitarian response. Kamala Harris, the supposed “border czar,” spent years avoiding a visit to the southern border to witness the migrant surge first-hand.
Instead, she claimed that her energy was better spent on trips to other countries where she could “solve the problem at the source.”
This meant that the Biden Administration would not close the border, but pay off foreign governments with billions of dollars in subsidies that would theoretically trickle down to third world populations and keep them at home. Harris promised $4 billion over the next four years, and private sector contributions added another $3.2 billion in 2022 and 2023. These payoffs were intended to make South American and Central American politicians stop encouraging their people to enter the U.S. illegally. “Foreign aid to reduce migration pressure.”
As you might imagine, foreign leaders were licking their chops. The more migrant mobs tried to force their way across the U.S. border, the more subsidies they would collect from the U.S. government.
The incentive for them to continue sending migrant trains north was overwhelming.
Remittances: Extracting wealth from the U.S. economy
While scrolling through Mexican news sources I came across the story that inspired this article: This week Mexican President Claudia Sheinbaum seemingly threatened the U.S. over a proposed tax on “remittances.” If you are not familiar with remittances, they’re money earned by non-citizens in the U.S. that’s sent back home.
I have related my own experiences with this issue in past articles. As a construction worker in Florida in my 20s, I witnessed extensive hiring of illegal imm*grants who were paid around 30% less than American workers. Most of them went to the local Winn-Dixie supermarket on payday to cash their checks and wire money to Mexico through Western Union. There would be a long line of them around the front of the store, all of them sending money outside the U.S.
Now imagine this is happening in every town in the U.S. with illegal imm*grants, and you’ll start to understand the sheer scale of remittances. The tax on remittances that is currently under review is only around 3%. Yet, Sheinbaum was hostile:
“If necessary, we’ll mobilize. We don’t want taxes on remittances from our fellow countrymen. From the U.S. to Mexico…”
The socialist president did not specify what she meant by “mobilize,” but many commentators assert that this is a threat to mobilize unrest among migrants already within U.S. borders. As we have seen in Los Angeles in the past few days, the threat is not idle.
It seems like madness, until we look at how much U.S. cash is actually sent “back home” by migrants.
Mexico alone received at least $65 billion in remittances from the U.S. last year. That’s 3.4% of the entire nation’s GDP! Mexico collects more dollars from remittances than from oil exports.
The Mexican economy enjoys a yearly boost of around $65 billion just by encouraging illegals to cross the border. To put this in perspective, Mexico’s entire social welfare budget is about $40 billion.
Illegal immigration is big business.
Also keep in mind that a money goes a lot farther in Mexico… A three-bedroom, $320,000 home in the Midwest costs about $100,000 (or less) in Mexico.
This is yet another reason why illegals march across the border; even for a paycheck 30% below an American worker, they still triple their buying power at home.
Sheinbaum understands full well that her country is highly dependent on the cash flow from illegal workers. The same goes for numerous Central and South American countries. Again, the expectation attached to the current financial order is that Americans get the world reserve currency, but Americans must foot the bill for nearly every other country. Guatemala, El Salvador and Honduras are the other major destinations for dollars earned in the U.S.
This dynamic is changing and the dependent nations don’t like it. Their economies rely on cash from the U.S. and they don’t know how to function any other way.
Immigrant unrest is just beginning
Panic is certain. The economics of illegal immigration are ugly. Some progressives will argue that open borders are “good for America” because remittances and cash outflows help reduce inflation. Obviously that’s not the case, otherwise inflation would have been non-existent under the Biden Administration and their unprecedented migrant invasion.
Not only that, but the mere presence of millions of illegals creates a massive demand spike in goods, services and housing which drives up prices. Add to this the billions of dollars spent every year on subsides for migrants collecting Medicare, Medicaid, SNAP and other welfare, and you have an undeniable economic burden.
But the economics of illegal immigration are more complex than that.
U.S. employers willing to overlook immigration status to save money on payroll are a big part of the problem. It’s estimated that one in every six construction workers are illegal imm*grants. Other sectors equally dependent on cheap illegal labor include hospitality and accommodation, food service and restaurants, agriculture and food processing, cleaning and janitorial services, landscaping – the list goes on. Physically demanding, low-wage jobs that offer few if any benefits.
Now, employers will tell you that, if they didn’t have access to low-cost illegal talent, their costs – and therefor our prices – would go up. Or they’d go out of business completely, because American workers simply can’t or won’t do jobs that imm*grants are happy to do. Businesses and sectors that are totally dependent on immigrant labor are facing a real challenge.
Foreign governments want illegals here because they are yet another tool for bleeding the U.S. for extra funds.
For better or for worse, the illegal immigration economy is changing. The impacts of those changes here in the U.S. won’t be as bad as in Mexico, Guatemala, El Salvador or Honduras – but that doesn’t mean we won’t feel it. Expect more economic volatility ahead.