Economic ignorance or a real concern?

Posted on January 26, 2017 by Oleg Volk

I see people bellyaching about Mexicans working in the US and sending cash home. When a person performs work or sells a product, they get money for it. The money is a claim on future services or goods. If that money/claim is saved, then the value of the remaining money in the US economy rises: fewer dollars are chasing the unchanged amount of goods and services. If the money is used to buy third-country goods, the same is still true. If, eventually, somebody buys an American product with that cash, that merely sets things back into balance. What exactly is the problem with taking dollars out of the country, again?

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13 Responses to Economic ignorance or a real concern?

  1. Precision 270 says:
    January 26, 2017 at 10:08 pm

    The problem is not so much the money leaving the country, that is a symptom. That symptom does have a slight effect on the economy, some of which is offset by the method used to send it. Western Union charges a fee, which stays here. The first problem is wage depression through the importation of low skill / low wage workers (not completely overlapping). The second is many of those workers are paid cash or in other ways avoid paying into the Social Security / workers comp / welfare system and often take a disproportionate amount out of self same systems. This is without mentioning the car insurance, theft, violent crime, etc issues that are caused by and plague that community.

    The money is mainly a lever to use on the non-educated / non-informed voting public to gin up anger without being called a racist / xenophobe.

  2. Merle says:
    January 26, 2017 at 10:14 pm

    Or could it be that the money will be used to purchase goods & services in another country?

  3. henry bowman says:
    January 27, 2017 at 1:02 am

    Its also an issue with crime, taxes, and displacement of Americans inside of their own nation by hostile aliens.

  4. Ole'Wolf says:
    January 27, 2017 at 3:18 am

    Nicely said and wholly ignored… all too many of our fellow Americans see is “money leaving.” Any thought beyond that is ignored. Kind’a like “Trump said-” and “Spicer said-” or choosing to “forget” what someone said in the past. If you listen to the whole thing they said it has a different meaning. Just our modern “habit” of seeking immediate gratification and easy answers to what we already “Know” is true. Sorry…seriously considering becoming a hermit.

  5. Walt says:
    January 27, 2017 at 8:41 am

    One could argue that it reduces what called the velocity of money. Each time a dollar is spent, it enriches the new holder, and in most cases a slice comes off toward an additional tax revenue. Dollars removed from domestic service are no longer working for the home team.

  6. Paul says:
    January 27, 2017 at 11:17 am

    The economic ignorance is from many sides.
    In the west the Mexicans and others are not able to get jobs without identification. So they ‘purchase’ many false identifications. The E-verify system is slow in catching up with them, usually 4 to 6 months. As the workers are caught in the false I.D. thing they simply switch to a new I.D. and move on. I have four laborers on my crew who last year alone (2016) changed names 11 times during the year, and again this month with all three. Who knows the number of American lives that are being destroyed or at the least massively interrupted by the I.D. theft. And these workers file for the most dependents they can so the least amount of taxes are taken out. During this time, they are using their natural born identification to gather up the “free” benefits we have given out such as food stamps, Chip, Whip, free medical, etc. at our expense. They are enrolled in our schools with generally marginal success (think free day care while the parents work), yes this sounds mean until you see the kids disappear for several months then turn up and are expected to just drop back into the curriculum.
    Now the medical side: The largest number of births at our local hospital is to illegal aliens! They do not pay for this service and the hospital will not turn them away. They wait until the baby is literally ready to pop out and they come to get our ‘free’ service. Guess who gets the bill? And they then go the ‘free’ clinic for checkups, prescriptions and again who gets the bill?
    This is a horrible issue that needs to be dealt with, these individuals do not assimilate into our society, they suck up our resources and are a huge burden on the tax payers!

  7. Paul says:
    January 27, 2017 at 2:10 pm

    I can’t leave this one alone; it’s cost me too much!
    One other aspect we here in the west are dealing with is ‘undocumented drivers’. Yes, the libs have a nice innocuous term for illegal alien with no driver’s license registration or insurance. Our insurance rates on vehicles is incredibly high due to the fact that at any given time 18% of drivers here in Colorado do not possess a driver’s license, have insurance or have registration on their vehicles. How you ask do they get license plates, well they steal them. It happens every day and it has happened to me. How many drivers do a full walk around their vehicle every day? Not many. It is the highest volume crime here right now and it’s expensive, who pays the bill?
    A wonderfully painful example was the economic downturn in 2008. Those of us within a comfortable drive of the border with Mexico saw our neighborhoods pillaged and plundered. And I live in a very nice middle class quiet area. The plates were stolen off my wife’s car, my atv trailer was attempted to be stolen twice and I caught them both times after they cut off the hitch lock. My neighbors lost a new F-350 truck, another neighbor a camper trailer and yet another lost utility trailer and two flat be trailers. What’s this you say? It can’t possibly be illegals! Well I bring you the Jefferson county Sheriff’s department, who after a ton of digging found pictures from the border crossing at El Paso of the F-350, hooked to the other neighbors camping trailer, followed by another neighbor’s utility trailer attached to another stolen vehicle all crossing the border nose to tail. And all within 24 hours of the theft. Who pays the bill?
    If you look at it from our view the little bit of money flowing south to Mexico is a pittance compared to the true economic cost born by us the citizens who are doing it the right way. They must think we are real suckers!

  8. .45ACP+P says:
    January 27, 2017 at 3:32 pm

    The dollars do not buy goods and services in the community in which they are earned. They do not pay sales taxes (a major funding source for local communities) locally either. Most people spend most of what they make, locally. While neither illegal nor immoral, there is an impact.

  9. LarryArnold says:
    January 27, 2017 at 10:14 pm

    Of course if we had a viable guest-worker program the “illegals” would be working legally, and if we had a decent immigration policy the immigrants would also be working legally. Most of the problems cited above would “magically” disappear, as they always do when any form of prohibition ends.

    Any money sent across the southern border would be a much greater benefit to the Mexican economy than it would a detriment to ours. Stable neighbors are a good thing.

    And the dollars Mexicans spend for products imported from the U.S. benefit our economy.

    • Michael Z. Williamson says:
      January 28, 2017 at 3:16 am

      As an immigrant, I have to say I found the policy pretty decent…even when we inadvertently violated it.

      I think what you mean is, “If we had no restrictions.”

      The US is one of the easiest nations to enter legally. Why, then, are people entering illegally?

      And why is their problem our problem?

      • Y. says:
        February 1, 2017 at 1:50 pm

        The US is one of the easiest nations to enter legally. Why, then, are people entering illegally?

        Rofl.

        Not even close. Most of the world needs visas, getting a visa is pretty hard unless you are rich. I recall the stories from way back before my country got visa waiver program. Intrusive questioning, long lines, little guarantee of success.. etc.

        If you were like 30, unmarried, wanted to travel. Forget about it. People with kids, careers had it a little easier.

  11. BF Caffrey says:
    January 28, 2017 at 11:29 am

    Almost all of the reasons people list above are why people “bellyache” about the situation.

    But let’s be clear about the issue. Few people, I think, would complain too loudly if the Mexican worker in the U.S. entered legally, sought gainful, legal employment and sent money he/she could spare, home to family in Mexico. This means they are paying their taxes, social security contribution and other mandated obligations. It also means their employer is paying a payroll tax and other taxes that may be due.

    The complaints are about the people that Paul describes above. The ones who come in illegally, get paid off the books in cash or use fake ID to work, but scam the system to get the most money they can. They don’t file income tax returns (and thus don’t pay their fair share but they do find ways to get “free” benefits. The money they send home to Mexico is spent in Mexico. So they are avoiding US taxes and lot of that money buys Mexican goods & services – plus Mexican taxes on those purchases.

    Theories on money-supply, with regards to currency being taken out of the country, work fine until the U.S. Treasury prints more money because billions have left the country — some of which never really returns. But all of that cash forms an obligation by the U.S. to honor it.

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