Innovative ways to stimulate the economy: Encourage the right kind of immigration
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Before you jump down my throat, saying that all immigrants do is drive up unemployment, allow me to bring forth some evidence to the contrary that shows immigration can also help stimulate a troubled economy, not to mention a weak housing market.
If you just look up, no, not at the sky, but up north to your friendly neighbor Canada, you'll hear how immigration helped it stave off a housing market recession in the 1990s -- the only recession when Canada hasn't reduced immigration. Not only that, but the influx of skilled workers in some areas has led to residential and commercial investments. Of course, not all is rosy as the mixed results of Canadian research on immigration's economic impact suggest. Still, immigration is believed to mostly have benefits, if only by virtue of population growth.
So far in this recession, Canada is debating its immigration policy, but other countries like the United Kingdom and Australia have reduced them, indeed fearing the newcomers would become a burden rather than help stimulate anything. Meanwhile, President Obama is also eyeing some immigration reforms.
For now, though, all there have been was protectionist regulation added to the American Recovery and Reinvestment Act against the H1-B visas for highly skilled immigrants if they have recently made U.S. workers redundant. Already Bank of America (BAC) had to withdraw job offers.
While some may feel it to be the right thing, as no foreigner should take away a job from an American, these may be the exact visas that should be awarded. In fact, if there is a way to encourage the more wealthy, skilled, educated, entrepreneurial, the U.S. will likely be better off for it. In fact, there is indication many of those waiting for the H1-B visas would buy homes in the U.S. were they allowed to.
Which brings the idea, what if foreigners who buy a home -- of minimal value of course -- in the U.S. were awarded resident status -- the coveted green cards? Perhaps it could stimulate the housing market. They wouldn't even need to live there, but the purchase itself would take a house off the oversupplied market and put money into the economy. And while we're at it, why not give any foreigner opening a bank account with a minimum amount of money a green card as well? Any investment for that matter could be treated the same way.
Yes, it does sound like people are buying their American residency, but it's not like this is anything new. It already exists in the EB-5 visa program that gives each year "10,000 EB-5 visas for foreigners who invest $1 million in a new enterprise ($500,000 in economically depressed areas) that creates at least 10 full-time jobs. After two years, the entrepreneur and his family can become permanent residents."
Many American economists believe the roughly one million a year immigrants is a very good thing. Now, many are suggesting to "simply change the nature of what constitutes the conditions for acceptance, so as to jump start the housing industry and the economy." Not necessarily more immigrants, but encouraging the ones who could help the economy more.
Americans underestimate the allure the land of opportunities has on the rest of the world. It would be easy to attract the ones the U.S. is known for, like the ones who became some of the greatest Americans. And if in the process the housing market and the economy could benefit -- all the better.
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