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Ever since the CCP Virus began devastating the U.S. economy, I’ve been calling for the U.S. government to “go big” on stimulus. That means I’ve been especially frustrated with the large number of Congressional Republicans who seem determined to keep down the amount of unemployment and other aid to be provided by the new round of proposed relief legislation that’s still being debated – even after the last supplemental jobless benefits have run out.

Here’s a development, though, that justifies some skepticism about shoveling money out the door as fast as possible: As reported in both The Washington Post and the Financial Times, it’s clear that a pretty sizable share of the income support funds being sent to immigrants in the United States have been forwarded on to their home countries, especially Mexico and the Central American states of El Salvador, Guatemala, Nicaragua, and Honduras. And it’s surely the same story for whatever Paycheck Protection Program monies have been sent to businesses owned by newcomers from these countries. 

In addition, these articles add to the evidence undercutting the common claim (debunked already in RealityChek posts like this one) that even illegal residents greatly benefit the U.S. economy on net because these border crossers wind up spending so much on domestic goods and services, thereby boosting America’s growth and overall employment, and contributing to the national tax base.

Compared with the total size of the U.S. economy and all the stimulus funding provided to date, the sums sent overseas (called remittances) are piddling. Mexico, for example, received $36 billion worth of these payments last year, and are running 10.6 percent higher this year so far. And this source tells us that nearly all came from the United States. Yet the federal government has provided literally trillions of dollars worth of virus-related aid to individuals and businesses.

At the same time, compared with the U.S. population (currently some 330 million), the share born in these countries and living in the United States both legally and illegally remains pretty modest itself – about 14.8 million in 2016 (the latest data available). That’s less than five percent. Further, illegals from Mexico and the Central American countries represented an estimated 46 percent of the total foreign born population in the United States as of 2017, and they’re not eligible for federal relief.  This means that it’s a relatively small number of Americans sending those tens of billions of dollars overseas, and a significant amount of resources transferred abroad per immigrant. (The number of actual senders is even smaller if you just count workers and business owners, and not their non-working family members.) 

Still, at a time of great privation in the United States, why are any government resources going right out the door (other than spending on imports – which of course takes place among these immigrants, too)? Clearly there are currently many millions of Americans for whom collectively about $35 billion would make a real difference nowadays.

By the way, remittances aren’t sent home only by immigrants in the United States from Mexico and Central America. Immigrants from everywhere transfer these funds (including to China, reported to be second biggest recipient country).  But Mexico is Number One by far and the Central American countries rank high as well.  ` 

The remittances information in the Post and Financial Times articles is also difficult at best to square in particular with the claim that illegal aliens are major engines of U.S. growth and prosperity. It’s already well-established that most work in low-wage jobs – so their spending power is pretty modest to start with. Now, both the Post and Financial Times articles report that it’s common for them to send abroad hundreds and even thousands of dollars each month.

These funds are overwhelmingly going to help hard-pressed family members in sending countries, which clearly stems from admirable values. Nevertheless, this is all money that does little, if anything, to enrich the U.S. economy, or create more employment for Americans. Unless you think that families in Mexico or Central America that depending heavily on funds from the United States are spending like gangbusters on imports of U.S.-made goods and services?

Because I’m a “go big” stimulus supporter, I’m in a lousy position logically speaking to insist that legislation going forward contain lots of strings to prevent waste and even fraud.  Those can’t be neglected, but they can’t be top priorities for anyone like me who believes that this is still a full-blown economic emergency. But I’m also wondering how hard it would be for Washington at least to tax funds like remittances that simply leave the country. 

What I’m even less optimistic about, though:  that even when confronted with this new information about remittances from illegals, the bipartisan Open Borders Lobby will stop making transparently absurd claims that that ever more of these newcomers are essential for ensuring continued American well-being, or rebuilding it.

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