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- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks❤
No. of Recommendations: 6
Krugman today:
ICEing the U.S. Economy
Mass deportations will hurt more than people realize
https://paulkrugman.substack.com/p/iceing-the-us-e...TL;DR
Trump administration’s latter-day Edict of Expulsion will be far more disruptive to the economy than the aggregate number of workers deported might suggest.
Consider, for example, agriculture. There are about 1.6 million paid agricultural workers in America, the great majority immigrants. Many of those immigrants are here legally, but it’s all too easy to imagine that anyone with brown skin will be at risk. So imagine that 800,000 of those workers end up being incarcerated and/or deported.
That’s a lot of workers, but America is a big country, so it’s only about half a percent of total employment. Not such a big deal, right? Except that the effect would be to cripple agricultural production, inflicting far more economic damage than a half-point across-the-board reduction in labor supply.
The loss of those workers would also be inflationary, sharply raising the prices of farm products.
You can tell similar stories for meatpacking, senior care, construction and more. Immigrants aren’t taking jobs away from native-born workers. For the most part they’re employed in jobs native-born Americans aren’t willing to do. As a result, ICEing the economy will make native-born Americans substantially worse off.
In fact, my guess is that arrests and deportations will eventually do even more economic harm than tariffs.Tariffs are a sales tax on imports. Most of us know we need more tax revenue. This is one way to get some (though the BBB takes it away again). Not a good way, especially with all the chaos, but a way.
The deportations are going to hurt the economy. We should be giving working people a path to citizenship.
No. of Recommendations: 1
Before people get all wrapped around the axle with it, first I'd like to see some "mass deportations." I'm not sitting here making little check marks on a legal pad every time somebody gets picked up but all I see of this big hat/no cattle immigration program is made-for-tv arrests just for show. There hasn't been any real change in the numbers.
This might be another have-cake/eat same game like inflation. "Throw out many many illegals" (not really) Claim it will cause inflation. Then raise prices and blame "inflation." But it will be worth paying for because "they're gone." (Not really) Low labor costs/higher prices.
I know, I know... the Occam's razor thing. I cannot dispute that. But don't tell me because it's not "simple" it is a thing which cannot be. They are capable of it.
No. of Recommendations: 1
There was some money added in the budget $75 billion? To build the facilities and ramp up deportations. This has not gotten into gear yet. They are serious as a heart attack about it.
No. of Recommendations: 0
The loss of those workers would also be inflationary, sharply raising the prices of farm products.
Product inflation is deflationary as a double whammy.
Our economy is 80% the service sector. Products are contracted for, and services are committed to getting the job done.
Tariffs that raise the price of products, or deportations that raise the price of products, create a decline in services. Softer revenues in the service sector contribute to unemployment. A negative synergentic spiral is created.
We are at the beginning of circling down the drain.
Both at home and abroad, our hegemony is being ripped apart to advance simplistic goals with little direct payoff. Secondary goals that work against the country's larger economic dominance. Scuttling much of our advantage will be crushing.
No. of Recommendations: 1
