The Problem

“The graying of America means that the portion of people who are of prime working age is getting smaller, with fewer workers available to fill open positions, ultimately reducing productivity, straining the federal budget, and slowing economic growth.” – Antonioli, J., & Malde, J. (2023)  

“…between inflation and the growing federal debt, interest payments on that debt are gobbling up a larger share of federal revenue every year. Per the Congressional Budget Office (CBO), annual net interest costs would total $663 billion in 2023, and by 2053 interest costs on that debt are projected to be nearly three times the amount the federal government has historically spent on R&D, infrastructure, and education combined.” - Exploring the Problem Space: How to Gradually Lower the Federal Debt, Part I

“Rising interest payments can crowd out other priorities in the federal budget and lead to a cycle of higher deficits, growing debt, and even more interest payments in the future…As interest costs rise, so too will the gap between federal spending and revenues. In fact, CBO [Congressional Budget Office] projects that interest costs alone will account for 38 percent of federal revenues by 2053, significantly exceeding the level of 10 percent recorded in 2022.” - Peter G. Peterson Foundation

The Solution

  1. Raise Tax Revenue (addressed in Part I)

  2. Cut Spending (addressed in Part II)

  3. Grow the Economy (partly addressed in Part III-a )

  4. Fix the Political Culture

The Formula: Economic Growth = Higher GDP = More Tax Revenue = More $$$$ to pay down the Debt

Another Way to Grow the Economy: Increase Legal immigration

Too many Americans lack the skills US employers want. This skills shortage negatively impacts America’s labor productivity, standard of living and potential for economic growth. One way to address the shortage is to expand adult education and training. But the US doesn’t just have a skills shortage - it also has a labor shortage, meaning there aren’t enough working-age adults living here to fill available jobs. We need more workers. In other words, we need more immigrants.

Democrats, Libertarians, and Republican Governors agree: the US needs more immigration

Prepared remarks for hearing titled “Unlocking America’s Potential: How Immigration Fuels Economic Growth and Our Competitive Advantage.” U.S. Senator Sheldon Whitehouse (D-RI), Chairman of the U.S. Senate Budget Committee, September 13, 2023.  

Economic growth is a product of labor force growth and productivity growth.  Immigrants are important to both, and they have become essential to meeting existing labor needs—and to the continued health of our social insurance programs, as the CBO Director testified in July. 

If 2 million more immigrants came to the U.S. each year, we could reverse our predicted population and productivity decline, and we could nearly double GDP to $47 trillion by 2050, compared to a GDP of only $33 trillion in a low immigration scenario.  

U.S. Immigration Policy Lags behind a Globalizing World, by David J. Bier/Cato Institute. September 4, 2023 

American workers benefit from immigrant workers filling needed positions. On average, additional workers produce more than they consume, so they cause economywide prices to fall relative to a world without them. Immigrant workers increase the productivity of firms, creating demand for U.S. workers in complementary positions. Companies respond to more labor availability by investing in more capital, which increases workers’ productivity, preventing any decline in wages or employment. 

Labor force growth is also essential to economic growth. More workers increase production and innovation and spur businesses to invest in capital. According to an estimate calculated in a 2019 paper, immigrants in 2022 directly accounted for about $3 trillion of the U.S. GDP. Skilled immigrants account for a disproportionate share of innovation, with a 1 percent increase in immigrant college graduates translating into an increase in patents per capita of 9 to 18 percent. 

To solve our national immigration crisis, let states sponsor immigrants by Eric Holcomb and Spencer Cox (Republican governors of Indiana and Utah, respectively). Washington Post, February 21, 2023

Rapidly declining birthrates and accelerating retirements across the United States mean that our states’ already wide job gaps will grow to crisis proportions without more [immigration] — causing our growth engines to sputter. Many of these jobs require high-level skills and entrepreneurship. But states are also awash in unfilled entry-level, low-skill roles — essential in agriculture, health care and the service industries.

So, count us as supporters of immigration sponsorship by the states. Under such authority, similar to what employers and universities have already, each state could make its own decisions. They could sponsor no visas or many visas each year, up to a limit set by Congress, for the specific sorts of jobs they need to fill.

How to Increase Immigration to Increase Labor Productivity and Grow the Economy

The U.S. Chamber of Commerce has a great plan. Here is their basic outline:

Make changes on the issuance of employment-based immigrant visas:

  1. Double the cap on employment-based immigrant visas from 140,000/year to 280,000/year.

  2. Eliminate the practice of counting spouses and minor children under the annual green card quota, which, if done alone, would practically double the amount of employment-based immigrant workers our nation admits every year.

  3. Eliminate the Per-Country Caps that punish individuals from certain countries with arbitrarily longer wait times, and when done in combination with expanding the annual quota, will avoid the creation of several new backlogs within the system.

  4. Provide international students who graduate from U.S. universities with more opportunities to obtain employment-based green cards upon graduation.

  5. Enhance and expand the opportunities for entrepreneurs to obtain permanent residency so they can build their businesses here in the United States.

Make changes with respect to the issuance of temporary work visas:

  1. Double the annual quota on the issuance of H-1B visas for high-tech workers.

  2. Double the annual quota and instituting a permanent returning worker exemption for H-2B seasonal employment visas.

  3. Expand access to H-2A agricultural worker visas for non-seasonal agricultural businesses, such as dairies and livestock producers, and ensure that the program meets the future needs of American agriculture.

  4. Expand Premium Processing and other measures to increase processing efficiency and eliminate the significant backlogs for various immigration benefits.

  5. Responsibly reinstate routine visa processing at consulates around the world so companies can obtain and retain the workers they need without significant operation disruptions to their businesses.

  6. Create a new, geographically targeted visa program, along the lines of the Heartland Visa proposal, that will drive economic and population growth into American communities struggling with the serious economic and social problems caused by significant population loss.

Sounds good to me, as did the governors’ proposal that states be allowed to sponsor immigrants, up to a limit set by Congress, for the specific sorts of jobs they need to fill.