Thread by @DanielDiMartino

🧵NEW REPORT @ManhattanInst: What is the impact of immigrants on the budget?

- Immigrants reduce the deficit (on average)

- The Border Crisis will cost over $1 trillion

- Each young high-skilled immigrant reduces the debt by over $1 million

Read more(link at the end)⬇️

First, what is the expected impact on the debt of adding one more immigrant depending on their age and educational level?

The average is positive but it ranges vastly goes from –$440,000 to +$1,170,000 depending on the immigrant's age at arrival and education.

How do I get these results? Months of work upgrading existing models on the fiscal impact of people in the U.S.

Here are the main differences between my model and that of the National Academies of Science.

For example:

An immigrant who comes to the US between ages 25 and 34 with a Bachelor’s degree is expected to pay $478,000 in taxes and receive $303,000 in government benefits over his life.

With debt interest savings, that's a net impact of +$278,000

Take an immigrant who never went to high school and came to America between ages 18 and 24.

Due to his low earnings, he will pay very little in taxes—$143,000 and receive more government benefits than he paid in taxes—$332,000.

A net impact with debt of -$315,000

And native-born Americans?

The average native-born American receives $60,000 more in government benefits than he pays in taxes over his life, and must pay for $200,000 in debt interest.

Immigrants reduce the debt because expanding the population dilutes debt among more people.

Yet, what matters is how much someone adds or subtracts to the debt relative to what they add to the economy, not to an average native-born person.

To solve this, I created an “adjusted” fiscal impact measure based on the lifetime earnings of immigrants relative to natives.

While the average immigrant of all legal statuses, ages, and education levels, helps America reduce the debt…most immigrants increase the debt.

The average immigrant is positive because immigrants with graduate degrees are extremely fiscally beneficial.

POLICY IMPLICATIONS

Border Crisis will cost $1 trillion+

Based on the likely age and education of new illegal immigrants, the Border Crisis will cost $1.15 trillion.

In other word, the lifetime cost of the border crisis will be larger than this year’s defense budget‼️

Mass Deportations would reduce the deficit.

Selective legalization would be even more beneficial, either of Dreamers or asking illegal immigrants to pay a fee.

Depending on the cost of deportations, different options would reduce the debt between $664 billion and $1.9 trillion.

Congress should restrict low-skilled and elderly immigration.

✂️Ending refugee resettlement would save $9 billion annually.

✂️Eliminating the green card category for parents of U.S. citizens would save $34 billion annually.

Congress should “upskill” current legal immigration.

🔼Requiring that adults finish high school to get a family-based green card would raise $5 billion annually.

🔼Diverting 55,000 “Diversity” visas to highly skilled immigrants (EB-1 & EB-2) would raise $55 billion annually.

Congress should expand high-skilled legal immigration.

📈Doubling the H-1B visa cap from 85,000 to 170,000 would raise $70 billion annually.

📈Exempting STEM graduate degree-holders from green card caps would raise $150 billion in the first year, then $25 billion annually.

This selectionist immigration proposal based on my estimates would:

1⃣Reduce permanent legal immigration by 15% annually

2⃣Rebalance immigration towards much younger and more highly educated immigrants

3⃣Reduce the budget deficit by over $200 billion annually over the long-run

Milton Friedman said

“You cannot simultaneously have free immigration and a welfare state.”

My research shows that an open border will bankrupt America, but a selective immigration policy could help the United States afford its welfare state.

Read more
manhattan.institute/article/the-li…