Thread by @AtifRMian

US needs a strong immigration policy to reverse the long-run decline in growth

To understand the argument, we'd need to get a bit into growth accounting

20 year growth rate just before the pandemic was at its lowest since WWII (black line)

Growth can be decomposed into growth in hours people work (red line) and productivity growth (blue line)

Both components are also at their lowest, but decline in hours growth is the steepest. Why?

A combination of two factors:

(i) the big run-up in women entering the labor force is maturing out

(ii) work force is aging / fertility rate declining. In fact, U.S. fertility rate is now well below replacement

So red line will continue to push growth downwards

This is a problem, especially as the U.S. increasingly relies on deficit-financed spending / investment

A higher growth rate makes it easier to sustain the rising deficit, with interest rate very low

However, a *declining* growth rate will squeeze the arithmetic

The build back better agenda is more likely to be successful if it is accompanied by a robust reversal in immigration policy

Path to citizenship would be an excellent start for immigrants already in the US, but the country also needs a healthy flow of new immigrants every year

(for those who tend to lean right, this can help keep taxes low!)