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Buy a House, Get a Visa
Add Thomas Friedman to Tyler, myself, Lee Ohanian and others suggesting immigration as a way to alleviate the recession:
Leave it to a brainy Indian to come up with the cheapest and surest way to stimulate our economy: immigration.
Note that the multiplier on the "buy a house, get a visa" strategy would be much larger than any possible domestic multiplier since the money would come from outside the economy (and efficiency would improve as well.)
I think there would be considerable support among economists that immigration (buy a house, get a visa), a payroll tax cut and maintaining state and local funding would be reasonably good policies in this recession (albeit not necessarily sufficient) yet these policies seem to be the ones that the political system rejects out of hand. (See also Matt Yglesias here and here). Now, I can understand rejecting these policies as compared to doing nothing, ala a precautionary principle, but why these policies are rejected compared to taking a trillion dollar gamble is puzzling even to someone like myself schooled in public choice.
Posted by Alex Tabarrok on February 12, 2009 at 07:10 AM in Economics | Permalink
Comments
add my voice too.
Posted by: babar at Feb 12, 2009 7:48:13 AM
That's the best proposal for ending the recession I have ever heard. The demand-side/supply-side effects would be brilliant.
Posted by: Michael Lachanski at Feb 12, 2009 7:54:42 AM
A capital idea!
Posted by: Bo at Feb 12, 2009 8:10:33 AM
Indians don't vote or make (legal) campaign contributions; those who do mostly wouldn't understand the advantages.
Posted by: Alan Gunn at Feb 12, 2009 8:11:44 AM
That is a stroke of genius. Seriously. You provide genuine support for the housing market by increasing demand, and you get people coming with both money and ambition. I love it. Surely there must be someone in Congress looking for a little good publicity who's willing to sponsor the bill?
Posted by: Slocum at Feb 12, 2009 8:14:54 AM
Brilliant. You need to add one of those thumbs-up for this idea checkboxes next to this post!
Posted by: missmarketcrash at Feb 12, 2009 8:39:26 AM
Yeah, well sure, this is one of the first ideas Bernanke/Geithner/Paulson/Kashkari came up with. Here's the problem: by stealing away these hardworking, creative Koreans/Indians/Chinese, we are depriving their host countries of the very resource they need to aid recovery.
Pass this into law and you will see a disastrous opening of borders across the globe as the whole citizenship market unravels.
Posted by: NE1 at Feb 12, 2009 8:42:11 AM
Stunningly brilliant.
Posted by: goodnessOfFit at Feb 12, 2009 8:50:26 AM
Here's the problem: by stealing away these hardworking, creative Koreans/Indians/Chinese, we are depriving their host countries of the very resource they need to aid recovery.
No. First of all, other countries (Canada, in particular, have skill/wealth based immigration policies). Second, the success of Indian ex-pats in the U.S. has been a huge boon for Indian development. Many of these people ultimately return or, at least, maintain business contacts with the home country (that's where India's IT industry came from).
Posted by: Slocum at Feb 12, 2009 8:53:43 AM
Always very nice to hear how things change yet always stay the same: now Asians are considered hard-working and virtuous above other peoples and in no way threatening to society's fabric. A bit like Northern Europeans more fit for America than Mediterraneans, Protestants more hard-working then Catholics. Maybe M. Friedman didn't think of importing people from the Middle East?
Seriously, if you want serious immigration debate you should go beyond simple racial judgements and think in terms of education, age, internal demand for specialized skills, etc. Just like Canada, the US should implement a point system for immigration. It's far from perfect but it's the lesser evil.
Posted by: lemarin at Feb 12, 2009 8:57:18 AM
It would also improve our position in those silly international competitions on:
Education
Life expectancy
Infant mortality
Social mobility
Income mobility
Etc.
Posted by: Floccina at Feb 12, 2009 8:59:08 AM
Oh and it would help push down the crime rate.
Posted by: Floccina at Feb 12, 2009 9:00:25 AM
And we'd certainly see the quality of college students go up when their children finished high school.
See Unfit for a college education
When I was in grad school in the late 1980s, the grad students from India were not only some of the brightest and hardest working, they were certainly the most pleasant people to be around.
Posted by: at Feb 12, 2009 9:37:56 AM
This may actually be the best argument against free migration that there is.
The US needs to have stupid efficiency-destroying policies such as restricted immigration in order that the lifting of those policies can provide a stimulus when times get tough. Think of it as government investment in idiocy, to be drawn down in case of emergency.
Of course, for the investment in idiocy to work, Congress now has to follow through and liquidate it.
Posted by: MikeP at Feb 12, 2009 9:56:28 AM
I am for this idea if we have a positive multiplier . Lets solve two problems and I hope Mr Friedman will be our advocate . We offer to take into the USA 3m Israelis or Palestinians . We will choose the side that first commits to this plan . This will go a long way into moving the chairs at the middle east table.
Posted by: Lowrie Glasgow at Feb 12, 2009 10:22:33 AM
For immigrants to work 18 hours a day, first we need to create jobs. We have so many professionals and non professionals unemployed who are willing to work any jobs.
Only gain will be when we stop outsourcing and then opening the border.
Posted by: AK at Feb 12, 2009 10:28:02 AM
Absolutely brilliant. Someone alert the White House. Having worked with a number of Indian immigrants, I can definitely say they're the kind of Americans we need now.
Posted by: Mark at Feb 12, 2009 10:57:27 AM
I think there would be considerable support among economists that immigration (buy a house, get a visa), a payroll tax cut and maintaining state and local funding would be reasonably good policies in this recession (albeit not necessarily sufficient) yet these policies seem to be the ones that the political system rejects out of hand.
Well, the political system rejected them, but not completely "out of hand." Senator McCain offered an amendment to strike the Buy American requirements; that one failed 31-65. Senator McCain offered an amendment to replace the entire stimulus with one that lowered payroll taxes temporarily, lowered corporate income tax rates, and extended unemployment benefits and cost $421 million. That one failed 40-57. Senator McCain also offered an amendment requiring that the stimulus spending be cut (or the deficit in general) after two consecutive quarters of GDP growth. That one failed 44-53.
Posted by: John Thacker at Feb 12, 2009 11:01:25 AM
Actually, even without importing in new people, if only the Indians & Chinese already in the US were given a faster track to EB green cards (these both have to wait the longest, due to country caps), that might be a faster way to
sell more homes ASAP!
I know for sure there are at least 100,000 people who're just waiting for their green cards to take the plunge of buying their first homes.
Posted by: martian at Feb 12, 2009 11:12:28 AM
Alex T. wrote:
I think there would be considerable support among economists that immigration... a payroll tax cut and maintaining state and local funding would be reasonably good policies...[W]hy these policies are rejected compared to taking a trillion dollar gamble is puzzling even to someone like myself schooled in public choice.
Alex, I'm not trying to be a jerk, but you're just now noticing that politicians don't implement economically efficient policies? If I asked you two years ago, would you have said most economists endorse the income tax code or the way the Drug War is being waged?
Posted by: Bob Murphy at Feb 12, 2009 11:29:24 AM
It's not just the indians that are waiting for many years now... have you seen the processing times for Adjustment of status? Many offices are still dealing with cases that were current in 07. This step used to take 6 months at the most, and I'd not be surprised if cases filed in October 07 don't get looked at until 2010.
Still, if the logistics were in place to actually give people their visas, who wouldn't be all for this? I'm sure It'd regularize a lot of illegal immigrants too.
Posted by: hibikir at Feb 12, 2009 11:39:40 AM
why these policies are rejected compared to taking a trillion dollar gamble
Jesus, do I have to state the blindingly obvious? Because most Black, White and Mexican Americans do not want 2 million more Indians, Chinese and Koreans in this country. That's why. It's only the elites who find this proposal exciting.
Posted by: frank at Feb 12, 2009 11:46:45 AM
Not paying your mortgage is considered shameful? Hmmm, wasn't this just reported here on MR:
Abandoned Cars in Dubai
Guess the apology note on the dash board accounts for the shame. If the jobs dry up, they are gone like mice from a sinking ship. Since there don't seem to be jobs here at the moment to attract them, how would this help?
Posted by: Jim at Feb 12, 2009 12:17:52 PM
Bob,
I'm not surprised that government's do what is in their interest not what is efficient. The puzzle is that you would think that there would be considerable political support for aid to state and local governments (big in the New Deal) or a payroll tax cut (concentrated interests, Chamber of Commerce etc.) so it's surprising that these policies which would probably be better economically and also look good politically are not supported.
Alex
Posted by: Alex Tabarrok at Feb 12, 2009 12:24:39 PM
we donot need revolving money! we need money thats gona come from foreign countries and stay here. Giving visa to foreign workers is gona drain out quite a lot of money from the country. Pay for the house in full(from ur home country)... be qualified to significantly invest in the economy and progress of the country...
Posted by: twinkle at Feb 12, 2009 12:39:34 PM
