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Thursday, November 13, 2014

Immigration And Our Looming Baby Boomer Problems

Immigrants can save our looming Baby Boomer problems. And there are baby boomer problems, believe you me. Our post-WWII wonders are getting to that age now, and for the next wave of retirees hoping to move to warmer climates, it's not looking good.

What do we know? The Boomer generation has been hit hard with misfortune on their way to retirement age. They will get to 64 or 65, and not have enough to sustain them for their projected life expectancy. Many of them may have to work through to their 80s. Their children had to move home, due to the massive international layoffs of 2008, so that makes even more mouths to feed.

Overall, the Boomers retirement funds were stolen by Enron, by the crash of investment banks, by the crash of pensions, oil and gas deals, or by lying insurance companies who could never make good on their debt. We're looking at you, AIG, Anderson Consulting, and your mystical twin Accenture. But those are stories for another day. Let's get back to the problem we have today.

Don't get me wrong, these baby boomers were made of some tough stuff, from hippies to yippies to preppies, they believe in YES WE CAN. So they tried, they picked themselves up, and dusted themselves off, but they just couldn't replace that nest egg. Not quick enough to retire comfortably. In a few years, the front of this wave will hit our economic markets, eventually affecting every aspect of life in the US. And things will stay that way for another 25 years, constantly coming like a wave.

Of course, there will be no more gold watches after 50 years; who has funding for that anymore? And without enough savings, you need to figure out how to live on Social Security, and how to navigate through Medicare.

And then, just when they are packing up their ferns, and enjoying their goodbye cakes, your average retiree is told their social security is gone, or cut, or no longer tied to inflation. Finding huge donut holes where insurance doesn't cover you appropriately for medication, these become daily realities. 

It isn't going to be cheap to keep these people alive, bottom line. Social Security, and Medicare, are supposed to be tied to inflation, but in reality, they could be cut anytime; even this newly voted-in Congress could do it. {{Shivers}} Now don't be angry at the drama. We have some options. 

What if I told you where to find $606.4 billions dollars. Would you be interested? That's $606.4 billion with "B." Well, you'd probably say we need to get our hands on that life-safety-net type money before it is too late, cause then we'd get behind the problem. And that would be bad. Well, we're hear to tell you, we could get that money back in taxes.

What are we saying? Yes taxes. From the 11 million immigrants currently in the United States, and we would most likely only integrate a portion of those applicants. Anyone with criminal records would have to reviewed, turned away and most likely deported. 

We could get that $606.4 billion injection into Social Security alone, but the payments would have to happen over the next 36 years. If we can get the proposed legislation S. 7844 passed and signed, we make that projected $606.4 billion. If you think of any other way our country could suddenly find an extra $606.4 billion with a "B" to pour into our Social Security fund, please do tell. 

The worst part is, these are only baby steps to solving those problems. Even if the undocumented population were able to gain legal status and citizenship under S. 744, the solvency of the Medicare trust fund could only be extended by four years, but that's enough of a reason for me. Or at least a starting point. Congress needs to make the big reform moves moving forward. Long term. And right now that bill is sitting on the steps of Capitol Hill, left swaddled by the Senate, waiting to be discussed and debated by The House.

At this time, there is another bill created by House Dems, and also ignored. We need to see this problem for what it is. What some members of Congress are not seeing is that this issue will exist for the next 25 years, the length of the Baby Boomer generation.

There are lots of humane reasons why we should process these immigrants completely and now. But, as you see, there are pragmatic financial reasons for doing it too. Citizenship would allow millions of undocumented immigrants to work on the books and contribute to Social Security. Over the next 25 years, these contributions to the Social Security system would support 2.4 million American retirees. 

Everything about S. 744 makes sense. As mentioned, this legislation already passed in the Senate, but the house won't even vote to vote on it. They won't even vote to debate it.

If "some people" could get over their phobia of the 11 million people already surrounding them, perhaps we could move forward. 

We think there's a whole bunch of deportation type stuff as well in S. 744. We know if we can make this happen immigrants, who are currently living in the United States off the grid, could make an additional net contribution of $155 billion to Medicare over the next 30 years. That's 3/4s of a trillion dollars this bill generates. At least that is the projection.

Hear me out on the real digits you need to know about immigration. As Baby Boomers retire en masse over the next 20 years, and yes they are coming, immigrants will be crucial to fill those then empty job posts. It is projected, by several stats gurus, that 58.6 million new workers will be needed to fill those Baby Boomer retirements. That's 58.6 million workers needed, and only 51.3 million native-born Americans are projected to enter the workforce, meaning that immigrants and their children will be crucial to filling the additional 7.3 million job openings while also furthering growth in the labor market. Woah, what did I just say?

Yes, immigrants would, in fact, promote growth in the labor market. We have 11 million immigrants to process. More than two-thirds could enter the labor market replacing retiring workers. The rest are probably already in our labor market, undocumented. What we propose here, is that we get these people legally documented without scaring them to death. If they are working, give them a work visa. No job, end of the line. Refugee, front of the line. Do you have a Sponsor, front of the line. Why? Because all those people could start to have bank accounts, and spend money, creating jobs, yes creating jobs. It is a win, win. Again, these human beings are already here. We have to do something. Our current laws aren't equipped to handle 11 million immigrants all at the same time.

The Policy Geek

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