Monday, April 12, 2010

Guest Voz: Robert Reich: Why More Immigrants Are an Answer to the Coming Boomer Entitlment Mess

My friend, Robert Reich, posted the following on Huffington Post. He is blogging about what I have been recommending for years:
I was born in 1946, just when the boomer wave began. Bill Clinton was born that year too. So was George W. Bush. 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 did so many of us begin getting 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:
1. higher taxes,
2. modifications to entitlement programs such as Social Security and Medicare,
3. less spending on everything else from education to defense, or
4. 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:
5. 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.
Cross-posted from RobertReich.org

11 comments:

Vicente Duque said...

Thanks Dee for Important and Opportune Information

The Economic Reasons are extremely important and are ignored in the Heat of Discussions, and Economic Reasoning is despised by Stubborn People that constantly incessantly allege with lots of passion and derision and few Economics.

Latinos have filled the great vacuum of the Beverage and Foods Industry... ( because of the recession and low demand )...

These industries and services would have had great losses without the Latinos. There are now great marketing studies showing the impact of Latinos in many industries and how they have saved many businesses of Great Losses. Those figures come from these sources :

Analysis of Census Bureau and Bureau of Labor Statistics Consumer Expenditure Survey data for 2005 to 2008

Youth is the Greatest Treasure and a big percentage of Youngsters are Minorities or Non-Whites.

In this year 2010 more than 50% of babies born in America are non-White.

There is no better way to sink a nation than to expel, expulse, extradite, drive out and kick out the youngsters that are studying in high schools, colleges, universities, etc .....

Progroms have sunk many nations in the past, or at least caused great economic damage.

But many people want to live in "Elmer Gantry", "The Great Gatsby" and "Gone with the Wind".....

In my site MILENIALS.COM I study the Demographic and Economic impact of Latinos.

Youth, Minorities, Politics :

Milenials.com

Vicente Duque

ultima said...

Talk about a simplistic solution!!
What is the end point for all of this immigration? Is population-drven economic growth really sustainable in the long run? What will more people mean in terms of the availability of scarce resources? Where will the water and fertilizer come from to grow the food needed by these immigrants? What will be our population under Reich's recommendation? What he proposes is just another Ponzi scheme, take from the new immigrants to give to the boomers. How long can that Ponzi scheme last before the whole thing collapses? If you take away all the arid land, the national parks and monuments, and the state parks, how much land is left for new occupants? I guess we could build some more anthills like New York City or LA but the food and water for those people will have to come from somewhere. Perhaps Reich thinks we should continue to grow and build de-salinization plants until we have sucked the oceans dry.

He deals with only a fragment of the overall problem and ignores most of the negative effects of immigration and population growth.

ultima said...

Looks like Arizona does not subscribe to Reich's point of view at least insofar as llegals are concerned. All of the states need to adopt this type of bill.

ultima said...

What vacuum is El Duque referring to in the Food and Beverage business. Are they eating more and drinking feeding their diabetes?

I thought El Duque was in favor of secure borders, at least so he suggested at one time. He, like
Dee, has not come forward with any concrete proposals on how to improve what we are already doing. Deep in their hearts they know nothing will work except vigorous internal enforcement using E-verify. They just can't being themselves to say it or make any other positive suggestions. They give only lip service to border security.

ultima said...

Did anyone notice that Reich deals with only a small part of the problem? He didn't mention that all these youthful workers he wants to import will want to bring their aged parents and grandparents and get them on the roles for Social Security and Medicare or Medicaid. I'm surprise that a man with his credentials is able to get away with such a superficial economic analysis. He doesn't even mention all of the other costs associated with more people and their impact on our standard of living and the availability of natural resources. Seems like these are all rather critical elements of the analysis.

ultima said...

I wonder why Reich didn't address the question of who got us into this mess by their inaction over the years. Surely any actuaries worth their salt could have pointed out this problem in the beginning and over the years as the trends materialized.

Dee said...

Ultima,
What you call a simplistic solution I call an intelligent, logical solution. Our friend Robert Reich is a brilliant, world-renowned economist and former US Secretary of Labor. I am sure he has given his recommendations a significant amount of thought, analysis and study.

I agree with Robert.

What you fail to consider is our aging boomer population and low replacement birth rate. As Robert said, most Boomers are planning on retirement soon. If all remains status quo, Social Security/Medicare are at the tipping point. For the first time in history, this year, we are paying more in benefits than we are taking in. We need more young people to legally pay into the system. Otherwise, who is going to care for us? Are you recommending we cut off SS for all Boomers? What about all we paid in? Shouldn't each of us at least get our money back?

We need more young people paying in. SS isn't a pyramid scheme. We need to sustain the youthful population paying in.

Don't worry. After the Boomers pass on, we go through a lull. The next few generations are much fewer in numbers.

Additionally, we should target our children and grandchildren into entering into the Medical Field. That is where the severest shortages fall. We need more doctors and nurses.

Healthcare Reform came into place just in time. We need reform. We could not allow the Health care providers to monopolize the industry and continue to pocket their profits as costs go sky high and they continue to deny coverage for their bogus claims of previous/existing conditions.

For all the Dream Act children: pass the bill and ask them to enter Healthcare. This makes sense.

Education is the great equalizer!

Dee said...

Ultima,
Who got us into this mess?
Hello...
Remember what our old friend used to tell you?
Bush made a wrongful turn to Iraq for the bogus war. He paid for the war by borrowing trillions from China.
That is what got us into this mess. That and all the deregulation and tax cuts for the rich.

Dee said...

Ultima,

No one will bring in aged parents. They haven't to date. Why would it be different in the future. Remember, these folks save their money, live frugally, and send any extra from their earnings home to their parents.

The same can be said for the legal immigrants from the south.

The old folks don't want to leave their homes. Part of the culture.

Dee said...

Latino and European cultures are the same in this regard.

Latino cultures and European cultures: Old folks stay at home; where they were born.

It is different in 3rd world countries where they bring generation after generation with them.

Dee said...

Ultima,
You are wrong. I have said the same thingfor years. I am for Secure Borders and Employer Sanctions and for allowing those here that are felony free to apply for citizenship.

As far as strengthening the border security: I have said all along. We need TRAINED Border Patrol securing our borders, ports and points of entry. We provide them funding to upgrade their current systems technologically. Since we have upped our trained BPs and previous technology, we have seen a drastic reduction of usurpers, in border crossers and ports and all points of entry. My recommendation is upping the numbers and the technology of TRAINED personnell. What HAS NOT worked is the untrained armed MM and Militia types driving their pickup trucks, with shotguns, shooting off their mouths and causing violence and danger towards the American Public. Also, what has NOT worked is crazed, mad goons like arpaio and his masked henchmen stalking and racial profiling Latino neighborhoods. All that has wrought is racial profiling and hard feelings, wrongful arrests. ICE Raids of workers ALSO DOES NOT WORK. All we have to do is look at Postville Iowa and see the pain and hell those ICE RAIDS and MASS Deportations wrought!!

As I have said, I have been VERY VERY CLEAR:
. Increase Trained Border Patrols for ALL Borders, Ports, and points of entry.
. Increase/Enhance Technology in pursuit of securing borders.

Additionally:
. Imprison ALL Employers who illegally hire and exploit workers who are brought here illegally and have them work in unsafe conditions.
JAIL THEM.
NO BAIL.
IN JAIL UNTIL THEIR COURT DATE.

Join me in this recommendation Ultima. JAIL THEM. NO BAIL.

This will stop illegal hiring.

Mandatory e-verify does NOTHING but harm people in process of correcting their immigration status.

JAIL EXPLOITIVE EMPLOYERS. NO BAIL. NO EXCEPTIONS.
THIS WILL IMMEDIATELY STOP EXPOITIVE EMPLOYERS TODAY.
Be BRAVE Ultima.
Join me in Recommending this!!


ultima said...Dee, has not come forward with any concrete proposals on how to improve what we are already doing. Deep in their hearts they know nothing will work except vigorous internal enforcement using E-verify.

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