A Lesson in Economics for Immigrants

This will be about the only political piece I ever write where I try to make a case or convince a group of people to vote a certain way.  And the way I'm going to do it is by being direct, blunt, honest and truthful, as well as using logic that cannot be disputed and math that is precise (though if anybody doesn't believe me, they can always look it up).  I also will be translating this into multiple languages so most immigrants in the US can read this (though I apologize in advance is the Google Translate loses some of the meaning in translation).

First allow me some assumptions.

If you are an immigrant to the US then chances are you came here for a better economic living.  You decided to come here, illegally or not, because it would benefit you economically.  Whether you decided to be a real American and work, or simply just go on welfare and live off of other people here, it doesn't matter.  Whether you even like the United States doesn't matter.  The fact still remains the United States presented a better economic life than the country you came from. 

Also, if you are an immigrant, chances are you vote Democrat and will vote for Barack Obama.  Again, whether you're here legally or not, and whether you are allowed to vote or not, it doesn't matter.  Most of you will vote for Barack Obama.  The reasons are many.  He promises you that you will become a citizen. He promises you more money.  He promises you jobs.  Whatever he promises you, in general he will give you more stuff and money than Romney will (which I agree).


But there is a problem the immigrant community faces and it's the same problem all Americans face.  A problem of feasibility.

Barack Obama can promise you everything under the stars.  Romney can do the same.  The issue is whether or not they can deliver and make good on those promises.  And what determines whether or not they can make good on those promises is whether or not the economy is strong enough, healthy enough and growing enough to generate the economic production needed to pay for everything they promised.

Understand the government can't just "print off more money."   Printing off more money does nothing but create inflation because it isn't the paper money that has any value, it is the goods and services that money can buy that has value.  Therefore the wealth and riches of a nation isn't how much pieces of paper money you have floating around, it's the amount of goods, services and stuff an economy produces that gives a nation its wealth, strength and standard of living.  We merely use money as a means to convert our labor into a tool we can use to go and buy the stuff we need.  That's all money is - it's a tool.  So when you print off all this money without a corresponding increase in economic production, you get inflation, or worse, "hyper-inflation" that you see in modern day Zimbabwe.

Until recently, the United States was able to produce a lot of stuff that would give its money value.  However, in the past 20 years or so, especially the last 5, we have been spending more money than the amount of stuff we're producing.  Additionally, the government has been spending way more money than it has taken in, requiring it borrow money from the Chinese, Arabs and other countries.  Worse still nearly 70% of the money the government does spend goes into what is called "income transfers."  "Income transfers" means just that.  It is transferring money from one group of people to another in the form of EBT, welfare, food stamps, medicare, medicaid and other programs that disproportionately benefit immigrants.  The problem is that the government (meaning the US population) does not get anything in return for those income transfers.  Normally when you give somebody money they have to produce something or provide a service.  But 70% of our budget is spent without any corresponding increase in economic production, explaining in part why our economy is in such bad shape today.

Now stick with me if I haven't lost you yet with the boring economics lesson because the consequences of this economic lesson will have an effect on you.

As we spend more money relative to the amount of actual genuine economic production this will not only cause inflation, but (as noted before) require we borrow the money to make up the gap.  Again, the Chinese, Arabs and other countries have lent us trillions of dollars, but inevitably they would like to be paid back.  The only way we can pay them back is through economic production, not merely printing off more US dollars because that would lower the value of the dollar and our creditors would not accept that. So we need economic growth.

The problem comes in the policies Obama and the democrats have been advocating.  They are usually for increasing taxes on people and corporations.  They are also for spending more money on income transfers (which again does not result in economic production, just merely taking one person's money and giving it to another).  None of these things create economic growth and the Chinese, Arabs and other countries know this.

The point in time will come that our creditors would like to be paid back.  And if we don't pay them, they will "cut us off" and lend us no more money.  Meaning, the government will have to really cut spending because it ran out of money.  Meaning where does that leave you?

It is here you have to be intellectually honest with yourself because whether you collect a government check or you actually support yourself, it doesn't matter.  The problems that you and I both face are a matter of sustainability.  The economic growth is simply not there to keep the promises Obama has made to you as well as the promises previous politicians have made to you.  And the deficit spending Obama is relying upon today is also unsustainable.

We also must be intellectually honest in another regard.  If something is unsustainable, which this economy currently is, how can you advocate it?  How can you vote for something that simply will not work?

If your goal is to simply take as much money from the American taxpayer as you can and leave when the government runs out of money, fine, at least you are honest in that regard.  But if you plan to live here or would like to live here, whether you are an illegal immigrant or not, then you must accept this fact and vote accordingly because you are literally delusional (in psychological terms) voting otherwise.

Furthermore, chances are the countries you all came from suffered from this exact same problem.  You just didn't bother to familiarize yourself with the economics and politics that caused your country's economy to be so poor.  The problem is you are simply causing the same problem again because you didn't bother to learn the economic lessons from your home country.  This is why you absolutely must study the budgets of the government.  You must study the economics of your country.  Because if you don't, then you are uninformed and vote for policies and politicians that sound good, but are not sustainable.  So please let me inform you and trust me, I'm not making these figures up.

First, our debt is currently at 100% to GDP (meaning we have enough federal debt so that it is equal to 100% the amount of economic production - "GDP" - we produce every year.  It is currently I believe 75% "net" federal debt to GDP, but that is another economics lesson for another time.  The point is that our debt level is high and it cannot go much higher.

Second, it is going much higher.  Higher and faster than ever before under Barack Obama.  For every year in his presidency he has had a $1 trillion deficit, or a deficit amounting to about 8-9% GDP.  This annual amount is added to our debt.  We are not paying down the debt, it is increasing at a rate faster than any time in US history except during times of war (which are those spikes in the chart).  It is not sustainable.  It will end either by Republicans cutting the budget or the Chinese refusing to lend us any more money.

Third, our economic growth is slowing.  We used to grow around 4.5% per year, now we're at about 2.25% per year. It is not enough to keep up with population growth.  This is in part because more and more people are living off of the government and not working.  If people had kept working and the government not spend so much money on income transfers the average person would not be making the $47,000 they do today, but rather closer to $100,000.

Again, this economy is not sustainable.  It is not in your best long term interests to vote for Obama.

Now, you can dismiss me, you can dismiss my logic and you can ignore my charts.  But it will be at your own peril.  Whether you believe me or not, you have stepped on the Titanic.  I don't care what the Democrats, the socialists or Barack Obama promises you, the economic boom days of the United States are over.  The only reason the government can spend money on income transfers today is because it's borrowing it and once that dries up, the money and economic opportunities you came here for will disappear.  You will face a situation similar to the one you saw back in your home country and there won't be a thing you can do about it. 

My final argument though is the most compelling.

Being an immigrant, chances are you have children.  The only reason the US population is growing is because immigrants are having more children than the natives.  What this means is you have "skin in the game" an English phrase that means you are personally invested in this country.  So if you don't want to study economics, you don't want to be educated and you are so naive you can't see a problem with a politician that promises "free everything" fine.  Your children will suffer your ignorance.  I'm lucky in this regard because I have no children.  Matter of fact I watch with a macabre fascination with the demise and collapse of the United States.  I'll be dead leaving no loved ones behind, I don't care.  However, you have much more at stake in the future of this country because you have children. 

So the choice is really up to you and all other immigrants in the United States.  You can keep going down the road you have before.  You can keep voting in politicians that promise you everything and in doing so will simply repeat the economic collapses of the countries you came from.   You can remain ignorant about history and economics of not just the United States, but your home country.  And you can be lazy about studying the finances of a country you are in charge of (because this is a democracy).  Just be prepared to have yourself or your children pay for the consequences.

I will, again, be watching the Titanic sink with everybody on it in macabre fascination.