Migrant cash is world economic giant

[Heracles 417]

Neither does spending on entertainment, dining out, shopping, etc. That creates false economic numbers. All one has to do is look at the beginning of the current recession to witness the phenomena. The current mortgage crisis is the result of counting on the consumer to prop up the economy by spending themselves silly.

Real economic growth comes from the investment of business into itself and on new enterprises. When that happens, their will be more jobs available than there will be native born Americans to fill them.

The US like many other successful developed western nations are based on service industries and tourism. The current mortgage crisis is due to banks lending out money to people they should not have as well as the thousands of house flippers who made a quick buck at someone else's expense. This cheap flipping was also made possible due to the exploitation of illegal immigrants..

Real economic growth comes from the investment of business into itself and on new enterprises. When that happens, their will be more jobs available than there will be native born Americans to fill them.

Which occurs when people contribute back to an economy. Someone buying cheap chinese goods gives nothing to the US. Same with people simply spending money overseas. Imagine the $41.1 billion had been spent on American cars, in restaurants, buying American goods, renovating houses, investing in the American stock exchange etc.. We are talking about hundreds of thousands of jobs being created as a result of that spending.

Think of a nations economy as a pie. When money is sent or spent overseas; that comes out of the American pie. Therefore the pie shrinks while the other country's pie grows..

[rebeccajo 14]

Neither does spending on entertainment, dining out, shopping, etc. That creates false economic numbers. All one has to do is look at the beginning of the current recession to witness the phenomena. The current mortgage crisis is the result of counting on the consumer to prop up the economy by spending themselves silly.

Real economic growth comes from the investment of business into itself and on new enterprises. When that happens, their will be more jobs available than there will be native born Americans to fill them.

The US like many other successful developed western nations are based on service industries and tourism. The current mortgage crisis is due to banks lending out money to people they should not have as well as the thousands of house flippers who made a quick buck at someone else's expense. This cheap flipping was also made possible due to the exploitation of illegal immigrants..

Real economic growth comes from the investment of business into itself and on new enterprises. When that happens, their will be more jobs available than there will be native born Americans to fill them.

Which occurs when people contribute back to an economy. Someone buying cheap chinese goods gives nothing to the US. Same with people simply spending money overseas. Imagine the $41.1 billion had been spent on American cars, in restaurants, buying American goods, renovating houses, investing in the American stock exchange etc.. We are talking about hundreds of thousands of jobs being created as a result of that spending.

Think of a nations economy as a pie. When money is sent or spent overseas; that comes out of the American pie. Therefore the pie shrinks while the other country's pie grows..

And why were the banks lending out money to people they shouldn't have?

Because they could - and because Americans were eager to do it. So they could spend it - which flooded the economy with 'false' dollars. Dollars that were not earned, but borrowed. It didn't matter whether people were buying stuff made in America or China as far as economic indicatars were concerned. You know that 'Consumer Confidence' number they always report in the media? That's from SPENDING. Nobody asks what it gets spent on - as long as we are buying cars, electronics and going out to eat every night, it gets counted in the numbers.

There was a hell of a lot of Americans spending borrowed dollars after the dot.com bust started chucking away at real economic growth. I rarely read a news report that did NOT indicate that this trend could not keep our economy going forever.

Service industries and tourism can't grow unless ballsy investors are willing to take the risk and create the industries. They won't do that if it's easier for them to make money elsewhere (like in mortgage backed securities fueled by consumers eating the equity from their homes) or if it's too difficult to invest because the tax structure where jobs are needed is prohibitive.

[Heracles 417]

And why were the banks lending out money to people they shouldn't have?

Because they could - and because Americans were eager to do it. So they could spend it - which flooded the economy with 'false' dollars. Dollars that were not earned, but borrowed. It didn't matter whether people were buying stuff made in America or China as far as economic indicatars were concerned. You know that 'Consumer Confidence' number they always report in the media? That's from SPENDING. Nobody asks what it gets spent on - as long as we are buying cars, electronics and going out to eat every night, it gets counted in the numbers.

There was a hell of a lot of Americans spending borrowed dollars after the dot.com bust started chucking away at real economic growth. I rarely read a news report that did NOT indicate that this trend could not keep our economy going forever.

Service industries and tourism can't grow unless ballsy investors are willing to take the risk and create the industries. They won't do that if it's easier for them to make money elsewhere (like in mortgage backed securities fueled by consumers eating the equity from their homes) or if it's too difficult to invest because the tax structure where jobs are needed is prohibitive.

Let me put it a different way. Which is better for the economy?

1. Someone who saves every dollar they earn and only buys the basics; Then sends most of their money overseas or
2. Someone who actively contributes to a country by dinning out, holidaying in America, buying American products, investing in America, building their 401K etc

[Trumplestiltskin 5,791]

And why were the banks lending out money to people they shouldn't have?

Because they could - and because Americans were eager to do it. So they could spend it - which flooded the economy with 'false' dollars. Dollars that were not earned, but borrowed. It didn't matter whether people were buying stuff made in America or China as far as economic indicatars were concerned. You know that 'Consumer Confidence' number they always report in the media? That's from SPENDING. Nobody asks what it gets spent on - as long as we are buying cars, electronics and going out to eat every night, it gets counted in the numbers.

There was a hell of a lot of Americans spending borrowed dollars after the dot.com bust started chucking away at real economic growth. I rarely read a news report that did NOT indicate that this trend could not keep our economy going forever.

Service industries and tourism can't grow unless ballsy investors are willing to take the risk and create the industries. They won't do that if it's easier for them to make money elsewhere (like in mortgage backed securities fueled by consumers eating the equity from their homes) or if it's too difficult to invest because the tax structure where jobs are needed is prohibitive.

Let me put it a different way. Which is better for the economy?

1. Someone who saves every dollar they earn and only buys the basics; Then sends most of their money overseas or
2. Someone who actively contributes to a country by dinning out, holidaying in America, buying American products, investing in America, building their 401K etc

By that rationale its rather dodgy to mess with that with poorly conceived ID card schemes.

[rebeccajo 14]

And why were the banks lending out money to people they shouldn't have?

Because they could - and because Americans were eager to do it. So they could spend it - which flooded the economy with 'false' dollars. Dollars that were not earned, but borrowed. It didn't matter whether people were buying stuff made in America or China as far as economic indicatars were concerned. You know that 'Consumer Confidence' number they always report in the media? That's from SPENDING. Nobody asks what it gets spent on - as long as we are buying cars, electronics and going out to eat every night, it gets counted in the numbers.

There was a hell of a lot of Americans spending borrowed dollars after the dot.com bust started chucking away at real economic growth. I rarely read a news report that did NOT indicate that this trend could not keep our economy going forever.

Service industries and tourism can't grow unless ballsy investors are willing to take the risk and create the industries. They won't do that if it's easier for them to make money elsewhere (like in mortgage backed securities fueled by consumers eating the equity from their homes) or if it's too difficult to invest because the tax structure where jobs are needed is prohibitive.

Let me put it a different way. Which is better for the economy?

1. Someone who saves every dollar they earn and only buys the basics; Then sends most of their money overseas or
2. Someone who actively contributes to a country by dinning out, holidaying in America, buying American products, investing in America, building their 401K etc

Unless that 'someone' is investing in a business which is creating jobs, I say the answer to the rest of it is 'neither'.

The rest is for personal pleasure or personal gain. 'Consumer Confidence' cannot grow an economy.

Edited August 19, 2007 by rebeccajo

[bszoom42 0]

I'm a U.S. Citizen. I enjoy sending money/gifts to my relatives abroad. All monies I send have already been taxed.

In this time of global economy, its hard to "keep the money in the U.S.".

All my cars are GM manufactured, but even they do not exclusively make their cars in the U.S. Yes, I have a 401K - but a portion of that money is invested in foreign stocks (as recommended by my financial advisor for diversification.)

Also, don't forget that the U.S. government gives away billions of dollars every year to foreign countries. If you are looking for individuals to stop giving money to foreign countries, look for the U.S. government to set an example first.

[Caladan 19]

I think it's misleading to describe those $41.1B as 'lost', as if in Alternate Reality World all of those dollars would have stayed in the U.S. and been used to buy American products. Isn't it a little more complex than that? Don't some of the people back home buy American products? Do we count our spending as 'lost' if we buy imports from overseas? Is it bad that a Filipina nurse can go to UAE and keep her family in medicine and clothes?

Anyhow, read biographies of earlier immigrant stories. Almost everyone has a son that sends home money from his new job in America to help out dear old Mam. Didn't stop the U.S. from becoming a superpower, won't hinder it now.

If you want people not to send money overseas to their families ('don't help your parents, go see Superbad!' consumption is next to fordliness indeed), make it easier for people to bring their parents here and to immigrate legally. Then they have a reason to invest more here. But it's a bit much to say 'well, it'll be 15 years for you to bring your parents here, but go out to dinner rather than help out your family.'

[Mr. Big Dog 10,747]

I do not agree with people whose sole purpose of moving to a nation is for economic gain.

The well fed seem easily disgusted with the table manners of the hungry...

[Mr. Big Dog 10,747]

Do we count our spending as 'lost' if we buy imports from overseas?

This arguably would hurt the economy more than the cash migrants send home ever will.

[Trumplestiltskin 5,791]

That and the current trend of outsourcing everything.

[bgreed 0]

What we're seeing is the same ycle that we have seen for the last 30 years. Since the wide spread use of credit and especially credit cards. The" 36 easy payments" "buy now pay later " mentality is the problem. There are very few people who cannot disiplinr themselves from buying everything their beady little eye falls upon. It is the greed syndrome of gotta have it now!! This same problem exists in business also. Why do you think the oil companies are running outdated refineries? because of the bottle neck they cause in the flow of gasoline prices go up and they make obscene profits. Gee would you bother to reinvest those profits into new refineries because if you do and the supply of gasoline will be greater and the profits will go down. Simple economics.

As far as spending for entertainment again it is amatter of controlling your debt load. If people want to eat out everynight and ther cash flow allows it then thats fine. However if they are doing it on credit that is where the problem comes in. To many people are carrying WAY to much personal debt so that when there is a natural economic slowdown their wages that before were barely covering those bills now don't even come close. That variable rate mortgage that you could afford when the rate were low now just became unbearable when they went up. You were a two income household that was mortgaged up to the eyeballs economic slowdown one person gets laid off. Well you get the picture. the base problem to solve the boom bust is too much personal debt. Will the economy grow more slowly if this type of debt were more limited? you bet and the boom bust syndrome would go away. A good read for those that really want to know how economics work is "Human Action" by Ludwig VonMises should be required reading in every college economics class or maybe in every class.

[pedroh 21]

i think people who earn their money fair and square, don't need to justify anyone if they wanna send money overseas... it's their freakin money ffs.. they'll know how to spend it..

[mawilson 2,133]

i think people who earn their money fair and square, don't need to justify anyone if they wanna send money overseas... it's their freakin money ffs.. they'll know how to spend it..

Indeed. But don't you think it would be fair to tax the money that wasn't earned "fair and square"?

The only way to tell the difference is to tax everyone and then give tax refunds to those who earned

it fair and square when their taxes are due.

[pedroh 21]

i think people who earn their money fair and square, don't need to justify anyone if they wanna send money overseas... it's their freakin money ffs.. they'll know how to spend it..

Indeed. But don't you think it would be fair to tax the money that wasn't earned "fair and square"?

The only way to tell the difference is to tax everyone and then give tax refunds to those who earned

it fair and square when their taxes are due.

yea i guess.. i don't send moneys so i dunno lol.. but it;s one thing to tax them, than to judge them or say 'ohh those people who only come to the US to send money overseas, arghh'

Edited August 20, 2007 by pedroh

[Caladan 19]

mawilson, where are you getting the idea that people who send money overseas aren't paying taxes? That doesn't seem to follow.