The Heritage Foundation’s much-discussed report on the cost of amnesty pegs it at $6.3 trillion, measuring government benefits paid against a far smaller amount of tax revenue to be collected. It’s early yet, since the report weighs in at 92 pages and has only been available for a day, but I haven’t heard any serious criticism of its methodology. Thus far, the complaints have been inaccurate, evidently coming from people who haven’t actually read the report. For example, they criticize it for failing to take account of the economic benefits of amnesty, but in fact it does.
The most sobering aspect of this report is the cost of government benefits – including, but not limited to, means-tested welfare programs – for every American household, both lower-income and middle class. That’s the big reason amnesty will be a fiscal disaster. The Heritage report relentlessly knocks down one illusion after another, including many held by optimistic conservatives: “Many conservatives believe that if an individual has a job and works hard, he will inevitably be a net tax contributor (paying more in taxes than he takes in benefits.) In our society, this has not been true for a very long time.”
Furthermore, illegal immigrants don’t work harder than other groups; young illegals won’t reduce the burden of insolvent retirement schemes like Social Security and Medicare; and the children of today’s illegals won’t generate enough income to offset the cost of amnesty over the course of their lifetimes (in fact, they’re likely to remain net tax consumers.)
Thus does the welfare state transform people into liabilities, rather than assets, although the immigration debate proceeds as if this were not true. I’ve always thought any system that makes people into liabilities is hideously dysfunctional. Every adult is both a labor resource and a consumer. In a healthy society, populations create both markets and the labor forces necessary to satisfy them. But the Big Government model, reaching far beyond even the corrosive effects of outright welfare programs, raises the minimal cost of labor – and even the cost of merely existing – enough to disrupt this health relationship. The Keynesian parody of Obamanomics, boiled down to the absurdity of Rep. Nancy Pelosi (D-CA) and Barack Obama claiming that welfare benefits are a form of stimulus, is a clumsy effort to create demand through consumption financed by pennies from heaven. The value of the work required to earn money is lost. Opportunities for work that pays better than the dole have dwindled.
Dump another 11 or 12 million people into that quagmire, pitting them against current citizens who already scrabble over the inadequate supply of entry-level jobs in an economy where the flame of small-business entrepreneurship burns low, and the result will be disastrous. Any of those new citizens with the moxie to start up their own small enterprises will “emerge from the shadows” to find themselves crushed beneath the heel of the Obama regulatory state.