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Thread: The Stationary State

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    Default The Stationary State

    There was an excellent column in the July 23-30 NEWSWEEK by Niall Ferguson. He reviewed Adam Smith who coined the term "Stationary State". In Smith's time, the prime example was China. A once prosperous and innovative nation that simply ceased to grow. Smith blamed Chinese culture and institutions, particularly its bureaucracy. He noticed that the bureaucracy favored the rich and civil servants at the expense of labor who slid toward subsistence.

    Today, the stationary states are in the West while China has the fastest growing economy in the world. Europe's economy is expected to contract this year according to the World Bank. The U.S. growth rate is 1.5%. China is growing four times as fast. This is terrible for investors. Only 7 out of 47 major national stock markets around the world have posted gains in the last 12 months.

    Most people blame our current state ( and Europe's ) on deleveraging. Households and banks are trying to reduce their debts having foolishly bet on ever increasing property values. To prevent a lethal debt deflation, governments and central banks have stepped in with fiscal and monetary stimulus. It might work short term but we are seeing the replacement of excess private debt by an excess of public debt.

    But Ferguson points out that a lot more than deleveraging is going on. Since June 2009 the U.S. has created 2.6 million net new jobs. It has also added 3.1 million people to the Disability rolls. In 1992 for every person on Disability there were 36 people working. Now it is 16 workers for every "disabled" person. Ferguson calls this "concealed unemployment" and of course it is becoming permanent. Just like " the dole" in Europe.

    China became more and more stationary in the 18th and 19th centuries. So are we. Literally The rate of people moving from one state to another has gone from 3% before the Financial Crisis to less than half that now. A prime cause of poverty in China and in post-Colonial India ( and dozens of other 3rd World Countries) was bureaucratic red tape. China made it impossible to start new businesses. So did India. Ferguson charts how long it takes to open a lemonade stand in NYC - 65 days.

    Adam Smith had a prescription for China that they are finally following after centuries of poverty and stagnation : more free trade, more small businesses, less bureaucracy and less crony capitalism. Another way to escape stagnation that China stifled is technological innovation. For centuries innovation was discouraged leaving China militarily and economically weak. Contrast China with Japan under the Emperor Meiji. In 30 years Japan went from a medieval feudal state to a regional power. 20 years later it was a World Power while China was being carved up into "spheres of influence". For decades India tried to preserve its "culture" , traditions and jobs for unskilled labor by erecting barriers to automation, among other things. That reminds me of the famous story of when Milton Friedman was touring India. ( It took them DECADES to start listening to "Uncle Miltie" btw.) He saw an irrigation project with hundreds of guys using picks and shovels. He asked why modern earth moving equipment was not being used and was told that it would displace the workers he was watching. Friedman said : "Why not take away the picks and shovels and replace them with spoons ? " It ought to be remembered that India's recent boom took place in spite of and sometimes in direct defiance of India's government. It was a totally private sector driven embrace of technology and innovation. While he was primarily responsible for India's independence , nothing retarded Indian development more than Gandhi's socialist and traditionalist prescriptions.

    Why do we enjoy the wealth that we do today ? We can tip our hats to capitalism , to government assistance to industry but the primary reason is technological innovation. What results in more wealth creation than anything else ? Technological innovation. Unless and until we make it easier to innovate we risk falling in with pre-Revolutionary China, the post-colonial 3rd World and of course, Europe and Japan.

    Germany's median age is 45.3. So is Japan's. it is 43.8 in Italy and 42.8 in Greece. See a pattern ? In the U.S. it is 37. One of the biggest problems with "Old Europe" is that it is literally old and getting older. In Greece and Spain, 50 % of those under 25 are unemployed. In the U.S. the good news is that the average person is 28 years away from eligibility for Social Secuirty and Medicare. The bad news is that most members of Generation X and Y do not own any assets of their own. And with reverse mortgages becoming so popular, even fewer will inherit the family home.

    I'll give you my suggestion for the most timely and essential innovation that is not only needed now but long , long overdue : A massive research project to figure out what works in medicine and what does not. Huh ? WHAT ? Yeah, that's right. 20 years ago doctors were prescribing PSA tests for men and hormone replacement therapy for women. Now we know the former is not necessary and the latter does more harm than good. We know now that occult blood testing is just as effective as a colonoscopy and is a LOT cheaper. We don't know if tiny ductal carcinomas in women's breasts are worth worrying about. So I say to lock Microsoft , MIT , The Mayo Clinic and The Dept. Of Health and Human Services in a room and let them come up with a program of statistical analysis to figure out what works and what doesn't in medicine. That way Medicaid and Medicare can limit payment to effective treatments and stop paying for what doesn't.
    Last edited by Eric Stoner; 11-20-2012 at 09:10 AM.

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    Default Re: The Stationary State

    ^^^ I'm not always on the same wavelength as your author Niall Ferguson. For example I disagree with his premise that technological innovation in and of itself was responsible for America's 'rise'. Instead I would point out that a huge amount of technological innovation, from the electric light bulb to motion pictures to digital computers to jet engines / stealth aircraft to industrial chemistry to nuclear physics, actually originated outside the USA. It was America's military might, combined with America's ability / willingness to deploy enormous capital resources, which were actually responsible for America's 'rise'. Author Ferguson is confusing the development of new technology with the CONTROL of new technology !!! Of course, since the globalization of the 1990's, America's control of technology is steadily being lost.

    Author Ferguson is absolutely correct though about the 'demographics problem' which increasingly plagues the US and other 'developed' countries. And he is also correct about the growing 'non-productive' citizenry a.k.a. 'permanent underclass' which also plagues the US and other 'developed' countries. Arguably, the only major countries to actually deal with this problem directly were Russia, China and ( briefly ) Germany !!! However, many other countries including the USA have dealt with this problem indirectly, i.e. drafting members of the 'non-productive' citizenry into the military and seeing a significant number of them 'permanently eliminated'.

    For better or worse, historically speaking, wars have been major agents of economic improvement. Wars have allowed for the 'seizure' of technological innovation, they have served as a huge economic stimulant to industry, they have allowed for the 'colonial-like' extraction of 'captured' assets, and they arrested the growth of 'non-productive' citizenry. But it has been 50+ years since any war has existed on a scale sufficient to significantly alter the 'civilian' economy ... or the demographic make-up of the population.

    Granted that all of the above are 'distasteful' subjects which nobody really wants to talk about ... but they did / do have PROFOUND economic consequences.
    Last edited by Melonie; 08-21-2012 at 04:25 AM.

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    Default Re: The Stationary State

    Quote Originally Posted by Melonie View Post
    ^^^ I'm not always on the same wavelength as your author Niall Ferguson. For example I disagree with his premise that technological innovation in and of itself was responsible for America's 'rise'. Instead I would point out that a huge amount of technological innovation, from the electric light bulb to motion pictures to digital computers to jet engines / stealth aircraft to industrial chemistry to nuclear physics, actually originated outside the USA. It was America's military might, combined with America's ability / willingness to deploy enormous capital resources, which were actually responsible for America's 'rise'. Author Ferguson is confusing the development of new technology with the CONTROL of new technology !!! Of course, since the globalization of the 1990's, America's control of technology is steadily being lost.

    Author Ferguson is absolutely correct though about the 'demographics problem' which increasingly plagues the US and other 'developed' countries. And he is also correct about the growing 'non-productive' citizenry a.k.a. 'permanent underclass' which also plagues the US and other 'developed' countries. Arguably, the only major countries to actually deal with this problem directly were Russia, China and ( briefly ) Germany !!! However, many other countries including the USA have dealt with this problem indirectly, i.e. drafting members of the 'non-productive' citizenry into the military and seeing a significant number of them 'permanently eliminated'.

    For better or worse, historically speaking, wars have been major agents of economic improvement. Wars have allowed for the 'seizure' of technological innovation, they have served as a huge economic stimulant to industry, they have allowed for the 'colonial-like' extraction of 'captured' assets, and they arrested the growth of 'non-productive' citizenry. But it has been 50+ years since any war has existed on a scale sufficient to significantly alter the 'civilian' economy ... or the demographic make-up of the population.

    Granted that all of the above are 'distasteful' subjects which nobody really wants to talk about ... but they did / do have PROFOUND economic consequences.
    Melonie. Melonie. Melonie. This is apparently our semi-annual serious divergence of view. I think Ferguson hit the bulls eye. Other technologies may have originated outside the U.S. So what ? Who cares ? It was the U.S. that perfected many of them and made them accessible to the masses. Two BIG reasons for our wealth and power were liberty and respect for property rights.

    You seem to be fixated on war casualties and try to blame that for what exactly ? Compared to Germany, Russia, China and Japan, our casualties in wars have been minute. Germany lost about 10 million in two world wars. Russia over 40 million between W.W. I , the Revolution, Stalin's Terror and then W.W. II. China lost millions before W.W.II , millions more during and millions more thanks to Mao. Japan lost millions in W.W.II. Our casualties in W.W. I were about 100,000 and 400,000 in W.W. II.
    It is far from true that casualties are limited to just "cannon fodder" i.e. socially "excess baggage". Far from it. Britain lost some of its best and brightest in W.W. I. So did France.

    While we developed some technology thanks to "war" with civilian application ( Radar , GPS , the Jeep ) we have invented just as much, if not more stuff, thanks to the Space Program.

    If your theories were correct then how do you account for the economic success of Switzerland, Denmark, Hong Kong, Singapore, Brazil and about a dozen other countries ?
    I argue that ALL provide economic liberty and respect for property rights, albeit to varying degrees. No place is perfect. Brazil hasn't had a war for over 100 years and look at them now. The Swiss have been at peace since 1815. Btw, Harry Lime was wrong ; they have developed a LOT more than just the cuckoo clock.
    Last edited by Eric Stoner; 08-21-2012 at 08:21 AM.

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    Default Re: The Stationary State

    ^^^ the ability to extract natural resources is a major factor for such countries as Denmark and Brazil. The recent success of Hong Kong, Singapore and Switzerland are arguably tied to their ... shall we say, 'unique' ... abilities to offer certain business opportunities which aren't similarly available in the US, in Western Europe, in Russia or China etc. To elaborate, Hong Kong, Singapore and Switzerland are able to 'skim' profits thanks to their 'unique' position as de-facto intermediaries.

    As to your US space program argument, need I remind you where the basic engineering and the key technical personnel who made that program possible originated ( Werner Von WHO ? ). Again it is the CONTROL of technology that matters far more than its invention. The ability of the US to control space technology was the direct result of US military might ... America was able to 'commandeer' more ex-German scientists than Russia was !!! The world would undoubtedly be very different today had the US not participated in WW2. ( and a large number of Americans were making the same anti-war arguments back then as have been made ever since ! ).

    As to war casualties, remember the law of exponents. 100000 US casualties that did NOT happen during the Vietnam War means ~240000 additional US children were born in the 90's thus ~576000 additional US children being born right now. Cold hard math says that the 100000 US casualties that did NOT happen during the Vietnam War means an additional 100000 social security / medicare recipients today. But it also means an additional 816,000 social welfare beneficiaries who are 'consuming' far more than they produce ! Obviously I'm citing an absurd worst case scenario but the basic principle certainly still applies.

    But the larger issue is that millions of casualties that did not happen in a 1980's 'hot' war with the Soviet Union means 1/2 billion additional children being born right now in Eastern Europe, in the middle east etc. And as you partially pointed out, the vast majority of war casualties in the past tended to be those with low skill levels / low education / low financial resources ( despite chivalrous exceptions re France and Britain ). Many of the children of those millions are now emigrating to Western Europe, to Canada, and the USA in search of economic opportunities that simply don't exist for unskilled workers.

    Switzerland, Denmark etc. have adopted a draconian position in regard to immigration of unskilled workers for whom economic opportunities simply don't exist to avoid the consequent 'drag' on their national economies. But for Canada, the USA, Western Europe etc. this is a 'new' variable ( along with illegal immigration ) that did not exist in previous eras where 'major' wars happened like clockwork every 25-30 years or so and disproportionately 'permanently eliminated' significant numbers of those with low skill level / low education / low financial resources from the global economic equation. And that brings us full circle to explain alternate root causes for the 'Stationary State' besides those presented by Ferguson !
    Last edited by Melonie; 08-21-2012 at 08:16 AM.

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    Default Re: The Stationary State

    Let's not confuse two different things. The "stationary state" , pre-revolutionary China and post colonial India being the best examples, is caused by a sclerotic bureacracy , lack of freedom and stifling of innovation. You are quibbling with Ferguson over the role of technology. You and I can point to many examples of successful economies that are NOT among the leaders in technological innovation. But they USE the technology. They provide economic freedom. They respect private property.I can quibble with him for ignoring the factors I just listed.

    While you are right that we had Von Braun and his fellow war criminals working for us, who was it that launched the first satellite ? That sent the first man into orbit ? It wasn't us. We were able to catch up and pass the Russians thanks to our capitalist system and a superior ability to adjust, innovate and adapt. Compared to the Russian nomenclatura our bureacracies were able to move at warp speed.

    Rather than argue further with someone with whom I agree so much and so often, why don't you read up on China and India ? Ferguson is absolutely right about China under the Emperors. Name one thing they invented after about 1200. What explains India's decades of famine and poverty better than its socialist policies ?

    I must be slow but I still do not understand the applicability or importance of your war casualty argument. Whatever we may have "lost" we gained by a more liberal immigration policy than many of our competitors. We succeeded because people wanted to come here. Hong Kong and Singapore succeeded because people WANT to work there. Canada is succeeding ( their average net worth is HIGHER than ours for the first time in history ) with an immigration policy far more liberal than ours. We have had more than just the "tired, poor, huddled masses " immigrating here. You're right that we still get too many people with no or low skills yet they are the ones taking jobs away from our own native born underclass. Are you seriously saying that wars are a good thing because they periodically clean out the dead wood ? That too long a period of peace lets that social dead wood accumulate ? Then how do you explain the U.S. becoming the world's most industrialized and wealthiest nation AFTER the Civil War ? We had over 50 years of peace from 1865 to 1918. Our casualties in the Spanish-American War aren't worth mentioning.

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    Default Re: The Stationary State

    who was it that launched the first satellite ? That sent the first man into orbit ? It wasn't us.
    No it was the 'junior' German war criminal scientists captured by the Russians, combined with a Russian gov't policy of placing 'progress' ahead of the potential loss of human life.


    Agreed that Ferguson's point about 'government sclerosis' is accurate ... but it is not complete. The missing ingredient is colonialism, which China and India deliberately did NOT pursue after the age of Zheng He ( 1421 ? ).
    Last edited by Melonie; 08-21-2012 at 10:45 AM.

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    Default Re: The Stationary State

    Quote Originally Posted by Melonie View Post
    No it was the 'junior' German war criminal scientists captured by the Russians, combined with a Russian gov't policy of placing 'progress' ahead of the potential loss of human life.


    Agreed that Ferguson's point about 'government sclerosis' is accurate ... but it is not complete. The missing ingredient is colonialism, which China and India deliberately did NOT pursue after the age of Zheng He ( 1421 ? ).
    You lost me. What does colonialism have to do with this ? It didn't help the Mongols. Or the Germans. Or the Portuguese. Sweden did fine without it. So did the Swiss.

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    ^^^ colonialism, both actual physical colonial presence and the economic equivalent, allows a gov't to permit it's domestic economy to stagnate while still being able to fund current spending via the natural resources / dirt cheap labor 'extracted' from the colony. Indeed the Germans and Portuguese extracted a whole lot of additional funding via their colonies ... albeit that they were 'kicked out' of the colonial business a few decades sooner than the Brits, the French, the Dutch etc. And the Swedes weren't without de-facto colonies either ... such as Finland ! Also check the history of Wilmington, Delaware !

    Again, the principle of colonialism was tied to military might. Without military might, Delaware would be speaking Swedish and New York would be speaking Dutch ! And that sort of military might, of course fell by the wayside after WW2 ... as well as much higher worldwide recognition of the consequences of colonialism on the colonial subjects !!! The effect of which was to cut off supplemental colonial revenues for the 'home' country ... making the 'burden' of excess unskilled labor not needed within that 'home' country far more noticeable to 'home' country budgets / standards of living. And what can I say about the Mongols ... after all they invented 'paper' currency !!!

    Going back to the war casualities / immigration issue, the key inflection point is the level of overall economic development of the particular country. Arguably, Canada still has significant amounts of undeveloped territory where unskilled labor represents a needed commodity. However, where western europe and the continental USA are concerned, with extremely few exceptions, there arguably aren't any regions remaining which still offer natural resources or other marketable potential for development such that unskilled labor would be capable of 'producing' more than it costs. Or if there are, access is cut off by gov't mandate ! I'll grant you that such gov't mandates do fit Ferguson's theory of gov't induced stagnation. Nonetheless, where western europe and the continental USA are concerned, every additional unskilled person ... either citizen or legal immigrant or illegal immigrant ... now represents an increased 'burden' on the country's economy. Thus I'll concede that Ferguson arrived at the correct 'destination', but via the wrong 'route'. Ferguson is certainly correct about the US gov'ts recent efforts to substitute 'concealed employment' i.e. adding more Social Security Disability beneficiaries than private sector jobs last year ! Agreed that this disguises the true cause of the burden, but it doesn't reduce the burden or the negative secondary effects on the 'productive' sectors of the economy !

    I would also add that the USA's chief 'colonial' revenue source, the petrodollar / US dollar as world's reserve currency, is now coming under de-facto assault from the Chinese, the Iranians etc. !
    Last edited by Melonie; 08-21-2012 at 01:57 PM.

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    Default Re: The Stationary State

    Interesting article, Eric. A couple of things:

    1) Interesting how things can get twisted around on internet- Re Milton Friedman anecdote in middle of post. In a recent mailing (might have been Motley Fool ), same story presented, except it was a consultant, or diplomat visiting China. Same question was asked with answer being picks and shovels make for full employment. To which American visitor replied (I'm paraphrasing) "using spoons would result in fuller employment". Which version am I to believe ?

    2) I wonder what the US median age would be without illegal immigrants ?

    I'm out, need to get back to more constructive/productive work.........................
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    Default Re: The Stationary State

    ^^^ there's yet another variant of this supposedly famous comment about gov't sponsored employment, which suggests that half the workers dig holes and the other half of the workers fill the holes back in again.

    As to the effect on the US median age due to illegal immigrants, A. there aren't too many grandpa's crossing the desert, and B. a main goal of new illegal immigrants is to have an 'anchor baby' born on the US side of the border which makes the household eligible for social welfare benefits plus greatly reduces the risk of deportation. Both serve to lower the US median age, but technically speaking the 'anchor baby' isn't counted as an illegal immigrant ( under current US law ).

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    Default Re: The Stationary State

    Minnow- Afaic, Milton said it first lol.

    Melonie- The "dig holes and fill them in" is another brilliant prescription from the fertile mind of my favorite "nugget economist" Krugie aka Paul Krugman.
    The point is the same. Letting government prescribe the work methods and staffing requirements creates inefficiency.

    You are also right about the "anchor babies". I want to meet the idiot who came up with the tortured definition of the 14th Amendment that makes the deliberate products of illegality , citizens.

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    Default Re: The Stationary State

    Quote Originally Posted by Melonie View Post
    ^^^ colonialism, both actual physical colonial presence and the economic equivalent, allows a gov't to permit it's domestic economy to stagnate while still being able to fund current spending via the natural resources / dirt cheap labor 'extracted' from the colony. Indeed the Germans and Portuguese extracted a whole lot of additional funding via their colonies ... albeit that they were 'kicked out' of the colonial business a few decades sooner than the Brits, the French, the Dutch etc. And the Swedes weren't without de-facto colonies either ... such as Finland ! Also check the history of Wilmington, Delaware !

    Again, the principle of colonialism was tied to military might. Without military might, Delaware would be speaking Swedish and New York would be speaking Dutch ! And that sort of military might, of course fell by the wayside after WW2 ... as well as much higher worldwide recognition of the consequences of colonialism on the colonial subjects !!! The effect of which was to cut off supplemental colonial revenues for the 'home' country ... making the 'burden' of excess unskilled labor not needed within that 'home' country far more noticeable to 'home' country budgets / standards of living. And what can I say about the Mongols ... after all they invented 'paper' currency !!!

    Going back to the war casualities / immigration issue, the key inflection point is the level of overall economic development of the particular country. Arguably, Canada still has significant amounts of undeveloped territory where unskilled labor represents a needed commodity. However, where western europe and the continental USA are concerned, with extremely few exceptions, there arguably aren't any regions remaining which still offer natural resources or other marketable potential for development such that unskilled labor would be capable of 'producing' more than it costs. Or if there are, access is cut off by gov't mandate ! I'll grant you that such gov't mandates do fit Ferguson's theory of gov't induced stagnation. Nonetheless, where western europe and the continental USA are concerned, every additional unskilled person ... either citizen or legal immigrant or illegal immigrant ... now represents an increased 'burden' on the country's economy. Thus I'll concede that Ferguson arrived at the correct 'destination', but via the wrong 'route'. Ferguson is certainly correct about the US gov'ts recent efforts to substitute 'concealed employment' i.e. adding more Social Security Disability beneficiaries than private sector jobs last year ! Agreed that this disguises the true cause of the burden, but it doesn't reduce the burden or the negative secondary effects on the 'productive' sectors of the economy !

    I would also add that the USA's chief 'colonial' revenue source, the petrodollar / US dollar as world's reserve currency, is now coming under de-facto assault from the Chinese, the Iranians etc. !
    All true but irrelevant.

    Yes, at one time Sweden was really the Kingdom Of Scandinavia and controlled Norway and Finland. I think that is why the Swedish flag has 3 crowns.

    The Germans were the last in to the colonial game and lost their African and Pacific colonies as a result of losing W.W. I. The Portuguese gave up Angola, Mozambique and Cape Verde around 1974. They were a net drain on their coffers.

    I can't imagine that you are advocating a return to the days of colonialism so I am struggling to grasp the relevance of your argument to the present day.

    The Mongols ruled over a massive empire for what ? 100 years ? From Genghis to Kublai Khan more or less. Where are they now ?

    Your last argument is imho flawed because it does not explain the incredible success of resource poor countries without colonies ; post war Japan probably being the best example. We can add Denmark , Hong Kong, Singapore and Macao just to name a few.

    Is there a surplus of unskilled and low-skilled labor in the U.S. ? Absolutely ! Illegal immigration is a prime cause but so is our poorly performing educational system. You argue that in the past that this overflowing pool of labor was lessened periodically by wars. We both agree that a war big enough to cull the herd is not a viable option. Neither is involuntary sterilization for that matter. ( Everybody relax. I am NOT advocating any such thing.) So what is the solution ? We either muddle along with the European social democratic model and pay people not to work or we train enough of those workers to do jobs that are needed. And we control our borders so that those unskilled jobs which are available can be filled by native -born citizens and/or LEGAL immigrants. We do what Reagan had to do in the early 80's - bite the bullet, endure the charges of callousness and cruelty and examine on a case by case basis everyone currently on Disability. Those able to work should have their benefits cut off and there are a LOT of them.

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    Default Re: The Stationary State

    I can't imagine that you are advocating a return to the days of colonialism so I am struggling to grasp the relevance of your argument to the present day.
    My point is that many of the negative effects of the 'Stationary State' can be / were avoided thanks to added revenues from actual or economic 'colonialism' subsidizing the low productivity of many 'Stationary State' citizens. My point was that, since 1945 until until very recently, the USA has enjoyed a large measure of economic 'colonial' revenues due to the PetroDollar and due to the US dollar's use as the world's reserve currency. Even though this sort of economic 'colonialism' didn't involve physically controlling a 'colony' country, economically speaking it did ( and still does to some degree ) provide the USA with the means to 'skim' profits from every country in the world who must buy or sell oil, or who must settle their international trade via US dollars. Those de-facto 'colonial' revenues successfully masked many of the negative effects of the USA adopting 'Stationary State' policies. But now that the PetroDollar and the US dollar's reserve currency status are both being threatened ( arguably as the result of a perceived unwillingness by the USA to exercise military power to protect vital interests ), near future negative effects of America's 'Stationary State' policies are going to take a LOT of people by complete surprise.


    So what is the solution ? We either muddle along with the European social democratic model and pay people not to work or we train enough of those workers to do jobs that are needed.
    As to real solutions, frankly I don't see any ! IMHO there now exists a majority of voters who have a large personal stake in ongoing gov't spending, but little or no personal stake in actually having to pay the associated taxes necessary to fund said gov't spending. That's the reason I decided to move way south of the border !!!

    As to your two options, frankly I only see the first option as being realistic. As to the second option, absent social stigma of the past, there simply isn't any truly significant standard of living improvement based incentive between sitting home and collecting SSI disability checks plus social welfare benefits with zero personal accountability, versus investing tens of thousands of dollars and years of effort to become qualified for 'needed' jobs which ...

    - involve a lot of personal effort, personal inconvenience, and personal accountability for performance
    - net of taxes, and net of out-of-pocket costs vs costs 'picked up' via social welfare benefit programs, results in a standard of living that is only marginally better than that of a neighbor sitting home and collecting SSI disability checks plus social welfare benefits

    History shows repeatedly that every 'Stationary State' winds up destroying the middle class. This is great if one is already 'rich', and also great if one is content to live on SSI disability checks and social welfare benefits, but increasingly self-defeating for those in the middle class whose gross paychecks are being driven down by gov't policy, and whose net paychecks are being driven down even further by gov't tax policy.
    Last edited by Melonie; 08-22-2012 at 10:47 AM.

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    Default Re: The Stationary State

    Obviously I still retain some shreds of optimism. We'll see what happens in November.

    Do I like the current condition or trends. Definitely NOT ! Is it irreversible ? Maybe but I don't think so. We will see.

    Btw, you are right about the Dollar. Oil prices have been going up for weeks thanks to a weak Dollar.

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    Oil prices have been going up for weeks thanks to a weak Dollar.
    Yes, and billions of dollars worth of Iranian oil has been sold to Greece, China etc. without benefit of using the US dollar to settle the transactions ... thus depriving US financial houses / US economy of their 1% 'cut'

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    Quote Originally Posted by Melonie View Post
    My point was that, since 1945 until until very recently, the USA has enjoyed a large measure of economic 'colonial' revenues due to the PetroDollar and due to the US dollar's use as the world's reserve currency.
    It's important to remember that after WWII there was little manufacturing capacity left standing in the rubble..... As important as the recycling of petro dollars is.... And the dollars rise as the reserve currency.... The lack of competition was hugely important.


    An interesting theory regarding the downside of U.S. Dollar policy.

    http://en.wikipedia.org/wiki/Triffin_dilemma
    The country has been looted.

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    It's important to remember that after WWII there was little manufacturing capacity left standing in the rubble.....
    As discussed in previous threads, despite the near total lack of publicity / acknowledgement, the US indeed was a huge beneficiary of WW2. Besides having just about the only significant manufacturing facilities left standing after the WW2 bombings stopped, the US also sustained far fewer WW2 casualties of skilled laborers, engineers etc. ( if one counts German skilled laborers, engineers etc. being forced to Russia as 'casualties' ), as well as the US having just about the only intact 'hoard' of capital. This indeed provided 25 years during which America had a near monopoly both in regard to manufactured products for export as well as in regard to near unlimited 'pricing power' in the international market. The 'surplus' accumulated during that 25 years was 'spent' attempting to maintain US standards of living during the following 25 years after european and asian competition returned and 'pricing power' was lost. During the last ~15 years, with that surplus depleted, increasing amounts of borrowed money have been 'spent' attempting to maintain US standards of living. The day is now nearly upon us where not only will America's ability to continue to borrow money at low interest rates be curtailed, but repayment of past borrowings will become a major issue / burden. And that situation only encourages 'Stationary State' policies.

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    Quote Originally Posted by Melonie View Post
    The day is now nearly upon us where not only will America's ability to continue to borrow money at low interest rates be curtailed, but repayment of past borrowings will become a major issue / burden. And that situation only encourages 'Stationary State' policies.
    Boy... I've thought that for a long time now.... I too am convinced that day will come.... I'm just not so sure, it's right around the corner anymore.... More likely is a currency event that forces rates higher.
    The country has been looted.

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    Quote Originally Posted by Melonie View Post
    ^^^ there's yet another variant of this supposedly famous comment about gov't sponsored employment, which suggests that half the workers dig holes and the other half of the workers fill the holes back in again.

    As to the effect on the US median age due to illegal immigrants, A. there aren't too many grandpa's crossing the desert, and B. a main goal of new illegal immigrants is to have an 'anchor baby' born on the US side of the border which makes the household eligible for social welfare benefits plus greatly reduces the risk of deportation. Both serve to lower the US median age, but technically speaking the 'anchor baby' isn't counted as an illegal immigrant ( under current US law ).
    You're making stuff up again. The main reason illegal immigrants come here is to find work, not have babies and collect welfare. That is why the number of illegal immigrants entering this country has decreased significantly over the past few years. Now that it's much harder to find work, people aren't coming here illegally.

    A few facts from:
    http://news.blogs.cnn.com/2012/06/15...united-states/

    - The number of illegal immigrants in the United States was estimated at 11.5 million in 2011, according to the Pew Hispanic Center.

    – 2009: The number of children born to at least one unauthorized-immigrant parent was 350,000.


    – April 23, 2012: The Pew Hispanic Center announced that net migration from Mexico to the United States had stopped and possibly even reversed. The center noted that from 2005 to 2010, about 1.4 million Mexicans immigrated to the United States, and about 1.4 million Mexican immigrants and their U.S.-born children moved from the United States to Mexico.

    Eric,

    I know you don't like when I point out that Melonie makes stuff up, but that is what she is doing here. In this case, I find what she made up to be racist. When she says it's a goal of illegal immigrants to become 'eligible for social benefits', I'm sure she's not referring to immigrants from Western Europe or Canada. Many of these immigrants come here to work hard and earn money to feed their family. Many will do work that Americans aren't willing to do. In states that have cracked down on illegal immigration, they are finding that they're not able to find enough workers in fields such as agriculture and hotel and restaurant industries. Georgia's economy has been hurt badly by large numbers of illegal immigrants leaving the state as a result of harsh anti-immigrant laws.

    http://www.forbes.com/sites/realspin...law-backfires/


    Melonie's statement that the main reason these people working hard in the fields are here, is to have babies so they can collect welfare benefits is a falsehood.
    Last edited by eagle2; 08-22-2012 at 07:06 PM.

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    Quote Originally Posted by eagle2 View Post
    You're making stuff up again. The main reason illegal immigrants come here is to find work, not have babies and collect welfare. That is why the number of illegal immigrants entering this country has decreased significantly over the past few years. Now that it's much harder to find work, people aren't coming here illegally.

    A few facts from:
    http://news.blogs.cnn.com/2012/06/15...united-states/

    - The number of illegal immigrants in the United States was estimated at 11.5 million in 2011, according to the Pew Hispanic Center.

    – 2009: The number of children born to at least one unauthorized-immigrant parent was 350,000.


    – April 23, 2012: The Pew Hispanic Center announced that net migration from Mexico to the United States had stopped and possibly even reversed. The center noted that from 2005 to 2010, about 1.4 million Mexicans immigrated to the United States, and about 1.4 million Mexican immigrants and their U.S.-born children moved from the United States to Mexico.

    Eric,

    I know you don't like when I point out that Melonie makes stuff up, but that is what she is doing here. In this case, I find what she made up to be racist. When she says it's a goal of illegal immigrants to become 'eligible for social benefits', I'm sure she's not referring to immigrants from Western Europe or Canada. Many of these immigrants come here to work hard and earn money to feed their family. Many will do work that Americans aren't willing to do. In states that have cracked down on illegal immigration, they are finding that they're not able to find enough workers in fields such as agriculture and hotel and restaurant industries. Georgia's economy has been hurt badly by large numbers of illegal immigrants leaving the state as a result of harsh anti-immigrant laws.

    http://www.forbes.com/sites/realspin...law-backfires/


    Melonie's statement that the main reason these people working hard in the fields are here, is to have babies so they can collect welfare benefits is a falsehood.
    Eagle-
    1. You are an intelligent guy. I mean that sincerely.
    2. You are entitled to disagree with me, Melonie or anyone else. Your opinions are valid afaic so long as they are based on FACTS. So are mine. So are Melonie's. So are anyone else's. Calling her "racist" does nothing to advance the discussion and if anything detracts from he force of YOUR arguments.
    3. We still have plenty of illegal immigrants. California has been bankrupted, in part, because of all the pregnant Mexican women waddling over the border to have their babies on American soil so that they will be American citizens. Mommy is now eligible for Medi-Cal among other social welfare programs and her kids can go to California schools.Take your 2009 number for illegal births, multiply it by just 10 and you get 3.5 million illegal children per decade.Then add at least one parent and now you are up to 7 million. Just how many of these illegal brats are you willing to tolerate ?
    4. While I agree with you that MOST illegals come here to work there is still a substantial number who come here for social welfare benefits. In NYC we get thousands of Russian babushkas who are too old to work. They come to "visit" family and end up staying. And they end up collecting Disability and are eligible for Medicare.
    5. I have been wondering about what I am gradually seeing as something of a myth : "Illegals do work that Americans won't do." Really ? "Don't want to do" is probably a lot closer to the truth and "don't like doing" is even closer imho. The question is are native born Americans being shut out from this type of work. Toweling off cars at a car wash, mowing lawns, being a busboy in a restaurant and a lot of other things are not the most pleasant ways to earn a living. SO WHAT ? I did some of those things and a lot of other unpleasant tasks when I was coming up. Youth and young male unemployment among Black and Latino "yoots" in this country is at criminal levels. What are they living on instead ? Obviously some sort of dole. If they are able bodied , what is wrong with saying : " take that car wash job or starve". What's wrong with telling the local landscaper : " get rid of your illegal Mexican crew and replace them with these fine native born 'yoots' or we will fine you into oblivion " ? Do you support the H1B Visa program ? Don't you think it is long past time that we got rid of it ?
    6. As for your link about the poor farmers of Georgia who can't get people to pick their crops - So what ? They are already adjusting by using prisoners to which I say "Good ! ". It might help cut down on recividism. Maybe those employers will find it necessary to pay more to attract the needed labor. That is a bad thing, why ?

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    In this case, I find what she made up to be racist. When she says it's a goal of illegal immigrants to become 'eligible for social benefits', I'm sure she's not referring to immigrants from Western Europe or Canada. Many of these immigrants come here to work hard and earn money to feed their family. Many will do work that Americans aren't willing to do. In states that have cracked down on illegal immigration, they are finding that they're not able to find enough workers in fields such as agriculture and hotel and restaurant industries. Georgia's economy has been hurt badly by large numbers of illegal immigrants leaving the state as a result of harsh anti-immigrant laws.

    Why am I not surprised to see the 'race card' being played in the absence of a valid factual argument !!! For the record, I have great and equal respect for all LEGAL immigrants, be they Mexicans in Texas, Bosnians in New York, Canadians in California, or Brits in Boston, who have gone through the legal immigration process, who have not posed an economic burden on US taxpayers, and who have worked hard to achieve success. I also have equal disdain for ILLEGAL immigrants who have bypassed the legal immigration process ... and particularly for those who take advantage of the US social welfare system. As to any supposed 'racist' element, it is a simple fact that the vast majority of ILLEGAL immigrants originate from Mexico. But that does not mean that I feel any differently about an ILLEGAL mexican dancer working in a Texas club versus an ILLEGAL Canadian dancer working in a New York club ... although admittedly the ILLEGAL mexican dancers far outnumber the illegal Canadian dancers !!!

    Please note exactly what I said in the context of anchor babies ... " A main goal " ( not THE main goal ) " for NEW illegal immigrants " ( not illegal immigrants already living in the US ). You have already conceded that poor US economic conditions have recently led to fewer illegal immigrants coming to the USA with the primary motivation of seeking work. Also you have already conceded that increased enforcement efforts against would-be employers of illegal immigrants has resulted in fewer job opportunities for illegal immigrants. Logically speaking, this makes illegal immigrant household eligibility for social welfare benefits a larger economic factor than ever ... with an 'anchor baby' being the key to unlock access to said social welfare benefits. Also, you and your link author have conceded that increased enforcement efforts against illegal immigrants is now taking place, in certain states at least. Again, logically speaking, this makes illegal immigrant 'immunity' from enforcement efforts / deportation a larger factor than ever ... with an 'anchor baby' being the key to achieving de-facto 'immunity'. So my statement about 'anchor babies' given today's economic environment and today's enforcement climate was IMHO entirely reasonable.

    Trying to circle back to the actual topic of this thread, it is arguably 'Stationary State' policies which have created a situation where unskilled US workers are unwilling to accept minimum wage jobs involving strenuous unskilled labor ... which in turn arguably created employer 'dependance' upon unskilled illegal immigrant workers. It is completely understandable that an unemployed unskilled US worker, who is receiving partial rent payment, partial utility payment, free food, free medical care, some amount of monthly cash etc, all courtesy of the US taxpayer, would decline a minimum wage job. If the rent subsidies, utility subsidies, SNAP subsidies etc. will be reduced in direct proportion to the size of one's paycheck, the net effect on one's standard of living between remaining unemployed and working at a minimum wage job is near zero - meaning that the unemployed unskilled US worker has near zero incentive to return to work at a minimum wage job. And this is especially the case if they can be approved for SSI disability benefits netting additional cash on top of other social welfare benefits ... with the point worth noting that more SSI Disability beneficiaries were added to the US taxpayer burden last year than net new jobs were created !!!

    Arguably, it is also those 'Stationary State' policies which have now motivated JC Penney to totally eliminate checkout clerks in favor of capital investment in ( mostly Chinese made ) automatic check-out equpment ... see . This will arguably eliminate at least 20 ( near ) minimum wage jobs for unskilled workers for every one technician job created to install and maintain the automated equipment. Arguably, it is those same 'Stationary State' policies have now motivated US fruit and vegetable growers to eliminate field labor in favor of capital investment in ( mostly non-US made ) automated harvesting equipment ... of which is just one example. This will similarly arguably eliminate at least 20 minimum wage jobs for unskilled workers in exchange for one semi-skilled machine operator plus one technician job created to maintain the automated machinery. And technology is already being developed and tested to introduce automation into other businesses which have traditionally depended on large amounts of unskilled labor i.e. automatic / robotic vacuum cleaners for use in hotels and restaurants.

    If one 'connects the dots', the likely end results of such 'Stationary State' policies are fairly predictable. You wind up with a small group of 'elite' business owners who reap increased profits. You wind up with a 'permanent underclass' of unskilled citizens / residents, whose job opportunities will be steadily reduced and who also have near zero motivation to accept an unskilled job that would reduce the social welfare benefits they are receiving. And you wind up with a hard working class of educated, skilled workers who are so heavily taxed that their actual standard of living isn't tremendously better than the 'permanent underclass'.
    Last edited by Melonie; 08-23-2012 at 08:45 AM.

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    Default Re: The Stationary State

    Quote Originally Posted by Eric Stoner View Post
    Eagle-
    1. You are an intelligent guy. I mean that sincerely.
    Thank you. Same with you.
    Quote Originally Posted by Eric Stoner View Post
    2. You are entitled to disagree with me, Melonie or anyone else. Your opinions are valid afaic so long as they are based on FACTS. So are mine. So are Melonie's. So are anyone else's. Calling her "racist" does nothing to advance the discussion and if anything detracts from he force of YOUR arguments.
    I'm not calling Melonie racist. I'm referring to her statement that illegal immigrants' main goal in coming here is to have an anchor baby and collect welfare benefits. This just isn't true, and I think it's common knowledge that there are many illegal immigrants working the fields on farms, and working in hotels and restaurants, rather that collecting welfare.

    According to this page, out of more than 11 million illegal immigrants, a total of 3.8 million unauthorized immigrants had at least one child who is an American citizen. Also, from the same page:

    -snip-
    In investigating a claim by U.S. Senator Lindsey Graham, PolitiFact found mixed evidence to support the idea that citizenship was the motivating factor.[16] PolitiFact concludes that "[t]he data suggests that the motivator for illegal immigrants is the search for work and a better economic standing over the long term, not quickie citizenship for U.S.-born babies."
    -snip-


    Quote Originally Posted by Eric Stoner View Post
    3. We still have plenty of illegal immigrants. California has been bankrupted, in part, because of all the pregnant Mexican women waddling over the border to have their babies on American soil so that they will be American citizens. Mommy is now eligible for Medi-Cal among other social welfare programs and her kids can go to California schools.Take your 2009 number for illegal births, multiply it by just 10 and you get 3.5 million illegal children per decade.Then add at least one parent and now you are up to 7 million. Just how many of these illegal brats are you willing to tolerate ?
    I'm pretty sure that even if an illegal immigrant has a child here, their status doesn't change, and they could still be deported. Just because a child was born here to illegal immigrants, it doesn't make them illegal. They had zero say in their situation. Over the long term, I think the 3.8 million children born here will be a positive for this country. There is a projected labor shortage in this country for the 2020's, when baby boomers start retiring in large numbers. There's going to be a big need for those additional workers. There will also be approximately 3.8 million more people paying into Social Security and Medicare.

    Quote Originally Posted by Eric Stoner View Post
    4. While I agree with you that MOST illegals come here to work there is still a substantial number who come here for social welfare benefits. In NYC we get thousands of Russian babushkas who are too old to work. They come to "visit" family and end up staying. And they end up collecting Disability and are eligible for Medicare.
    I don't deny there are some people here illegally, that are taking advantage of our system, but to make a generalization like that just isn't true.

    Quote Originally Posted by Eric Stoner View Post
    5. I have been wondering about what I am gradually seeing as something of a myth : "Illegals do work that Americans won't do." Really ? "Don't want to do" is probably a lot closer to the truth and "don't like doing" is even closer imho. The question is are native born Americans being shut out from this type of work. Toweling off cars at a car wash, mowing lawns, being a busboy in a restaurant and a lot of other things are not the most pleasant ways to earn a living. SO WHAT ? I did some of those things and a lot of other unpleasant tasks when I was coming up. Youth and young male unemployment among Black and Latino "yoots" in this country is at criminal levels. What are they living on instead ? Obviously some sort of dole. If they are able bodied , what is wrong with saying : " take that car wash job or starve". What's wrong with telling the local landscaper : " get rid of your illegal Mexican crew and replace them with these fine native born 'yoots' or we will fine you into oblivion " ? Do you support the H1B Visa program ? Don't you think it is long past time that we got rid of it ?
    I don't think we should get rid of the H1B Visa program, but I do think it should be carefully monitored to ensure that firms aren't using the program to hire foreigners if American citizens are available in the particular field. I also think we should be doing more to encourage Americans to become scientists and engineers.

    Quote Originally Posted by Eric Stoner View Post
    6. As for your link about the poor farmers of Georgia who can't get people to pick their crops - So what ? They are already adjusting by using prisoners to which I say "Good ! ". It might help cut down on recividism. Maybe those employers will find it necessary to pay more to attract the needed labor. That is a bad thing, why ?
    My point was, that illegal immigrants in Georgia were working in fields rather than collecting welfare. According to the article I linked to, a skilled harvester can make $15 - $20 an hour, so the pay sounds reasonable.

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    I'm pretty sure that even if an illegal immigrant has a child here, their status doesn't change, and they could still be deported. Just because a child was born here to illegal immigrants, it doesn't make them illegal. They had zero say in their situation. Over the long term, I think the 3.8 million children born here will be a positive for this country. There is a projected labor shortage in this country for the 2020's, when baby boomers start retiring in large numbers. There's going to be a big need for those additional workers. There will also be approximately 3.8 million more people paying into Social Security and Medicare
    First, being the illegal immigrant parent of an anchor baby DOES confer de-facto immunity from deportation. ICE policy prevents deportations of parents which would 'force' a US citizen anchor baby to be taken outside the USA, or 'force' a US citizen anchor baby to become a de-facto orphan. Like the latest presidential executive order setting ICE policy granting de-facto immunity from deportation of illegal immigrant under age 31 who were brought to the USA as children, the legal status of the illegal immigrants many not have officially changed but they are nonetheless 'safe' from deportation.

    On the subject of any actual shortage of UNSKILLED US workers in the 2020's, there are so many variables in that projection that it's little more than 'crystal ball' gazing. As already pointed out, 'Stationary State policies have prompted many US businesses to already embark upon programs that would permanently automate away future need for unskilled workers via capital investment. And from the opposite end, 'Stationary State' policies which have reduced interest rates to zero, which have greatly increased prices for food, energy etc., which will greatly increase overall personal tax rates etc. are making it increasingly difficult for 'baby boomers' to actually retire !!! Not being able to afford to retire directly translates into no job opening needing to be filled !!

    As to illegal immigrant workers paying Social Security / medicare taxes, that is NOT the case when said illegal immigrant workers are being paid 'off the books'. And even when illegal immigrant workers are being paid 'on the books', it certainly remains to be seen whether or not the net tax payments versus net tax credits / social welfare benefit value paid out results in a 'positive' contribution by the illegal immigrant worker.

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    Quote Originally Posted by Melonie View Post
    First, being the illegal immigrant parent of an anchor baby DOES confer de-facto immunity from deportation. ICE policy prevents deportations of parents which would 'force' a US citizen anchor baby to be taken outside the USA, or 'force' a US citizen anchor baby to become a de-facto orphan. Like the latest presidential executive order setting ICE policy granting de-facto immunity from deportation of illegal immigrant under age 31 who were brought to the USA as children, the legal status of the illegal immigrants many not have officially changed but they are nonetheless 'safe' from deportation.
    No they're not.
    http://www.pitch.com/plog/archives/2...-family-proves

    Quote Originally Posted by Melonie View Post
    On the subject of any actual shortage of UNSKILLED US workers in the 2020's, there are so many variables in that projection that it's little more than 'crystal ball' gazing. As already pointed out, 'Stationary State policies have prompted many US businesses to already embark upon programs that would permanently automate away future need for unskilled workers via capital investment. And from the opposite end, 'Stationary State' policies which have reduced interest rates to zero, which have greatly increased prices for food, energy etc., which will greatly increase overall personal tax rates etc. are making it increasingly difficult for 'baby boomers' to actually retire !!! Not being able to afford to retire directly translates into no job opening needing to be filled !!
    Why are you assuming that children born to illegal immigrants are going to grow up to be unskilled workers?

    The average retirement age is currently 62.
    http://moneyover55.about.com/od/prer...ted-States.htm
    By 2020, the oldest baby boomers will be 74. The average retirement age may gradually go up, but it's not going to be way above 74. At a certain point, people cannot keep working. In addition, people eventually die.

    Your comments about food prices and energy are based solely on your ideology. They have nothing to do with what happens in the real world. By the 2020's, people will probably be paying less for energy and fuel. The cost of wind and solar energy has been falling significantly. Once it's gotten to the price level of fossil fuels, the price of energy will start falling. The new CAFE standards for automobiles in the 2020's is 50 mpg. When most people are driving cars that get 50 mpg, they'll be spending less on fuel. It's also possible that electric vehicles will be widely available, and they cost much less to operate than gas-powered cars.

    Quote Originally Posted by Melonie View Post
    As to illegal immigrant workers paying Social Security / medicare taxes, that is NOT the case when said illegal immigrant workers are being paid 'off the books'. And even when illegal immigrant workers are being paid 'on the books', it certainly remains to be seen whether or not the net tax payments versus net tax credits / social welfare benefit value paid out results in a 'positive' contribution by the illegal immigrant worker.
    We're talking about children of illegal immigrants who are born here. They most likely will be paying Social Security/Medicare taxes.

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    ^^^ your blog link is a 'red herring'. Even if ICE had actually attempted to pursue deportation proceedings against the then 26 year old illegal immigrant father, deviating from ICE official policy given the existance of an 'anchor baby', today the 27 year old illegal immigrant father has a second line of ICE policy 'immunity' from deportation under the president's executive order.

    As to the probability of the US born children of illegal immigrants growing up to also be unskilled workers, the only generalities to be offered are A. that college tuition costs money ... that near minimum wage workers don't earn much money and aren't able to save much money ... thus the probability of an 'anchor baby' receiving a college education ( absent major subsidies ) is lower than average. Granted that there are 'Stationary State' policies being explored to provide just such college subsidies to both illegal aliens and to 'anchor babies'. See out-of-state tuition rate discussions for illegal aliens meeting the recent presidential executive order criteria, and an even more recent executive order rescinding such subsidies by Arizona governor Jan Brewer. Also see the effect on California's economy / state budget of a judges ruling from several years ago which afforded illegal immigrants access to subsidized state college tuition as well as certain social welfare benefits ( over-ruling a statewide majority vote which opposed such benefits for illegal immigrants ) . But of course there is also B. a stumbling block in that admission to college also requires graduation from high school ... something which 3 out of 10 California Latino students ( legal and/or illegal ) fail to do. That's not to say that a given 'anchor baby' won't wind up someday receiving the Nobel Prize ... but statistically speaking, odds are that a significant percentage of of 'anchor babies' will wind up being unskilled workers and net 'consumers' of tax revenues extracted from US businesses and higher earning taxpayers.

    As to prices for food and energy being irrelevant, get serious. Granted that food and energy prices don't actually matter much to social welfare recipients whose food and energy bills are being subsidized, and who have no need to buy gasoline to drive to a job every day, but they certainly matter to anyone paying their own grocery and utility bills plus spending $3.50+ per gallon as a pre-condition of getting to and from their job. And in regard to future dreams about stand on their own economic viability of wind power, solar power, electric cars and other such 'Stationary State' command economy Crony Capitalism examples, let alone delusions that total energy costs and total transporation costs will be reduced in the future, how many examples of direct and stealth taxpayer subsidies do I need to cite ?

    As to the premise that unskilled workers receiving near minimum wage pay rates actually make a 'positive' contribution to tax revenues via their payment of Social Security and Medicare taxes, check the figures yourself. The available low income tax credits result in unskilled workers receiving a net tax dollar outflow i.e. the amount of tax 'refund' received by the near minimum wage worker exceeds the total dollars of SSI and Medicare taxes withheld from their paychecks !!! And even if the low income tax credit were to disappear, SSI and Medicare tax payments amounting to 7% of a near minimum wage paycheck won't even fund a small percentage of the Social Security and Medicare benefits that said worker will eventually be eligible to collect ... amounting to a need for yet another US taxpayer subsidy !
    Last edited by Melonie; 08-24-2012 at 04:57 PM.

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