Question:
Meantime our Noble Leader continues to shirk his responsibility to insure
enforcement of existing law. Should change the President's home from White
House to Brown House?
Answer:
Of course it does. In strict sense those dollars are no different as
other dollars used to buy foreign goods and services. The US spends
hundreds of billions of dollars buying Mexican goods and services. Do
you think that money simply dissapears from the US economy? When an
American employer pays a Mexican worker, legal or illegal, it pays for
services rendered. It's not a gift. So the American employer is
obtaining a benefit. Then the worker takes that money to the money wire
service, which, acting as a foreign exchange, change the dollars to
pesos. The recipient in Mexico receives pesos, NOT dollars. Then the
foreign exchange firm sells those same dollars to some Mexican company
or individual, who uses those dollars to buy American goods and
services. INTERNATIONAL TRADE, ladies and gentlemen.
You can claim that the dollars leave the local American community to be
dispersed into the general US economy, but you CANNOT claim that the
dollars, and more specifically, the WEALTH, leaves the US in absolute
terms. To say so is, FOR SURE, a gross misunderstanding on how the
economy works.
Please, other economists out there, back me up! I keep explaining this
point to the alt.politics.immigration crowd and they don't believe me!
What if they buy Japanese goods and services?
Speaking of gross misunderstandings, you seem to think that the only
goods and services for sale in Mexico are American.
Then they would have to exchange the dollars for yens, and some
Japanese company or individual would buy the dollars, and THEN buy
American goods and services. Don't you get it?
No, but ultimately, the only goods and services you can buy with
dollars are American. I KNOW this is an oversimplification; of COURSE
you can use dollars to buy stuff from other countries, but eventually
those dollars come back to the US economy one way or another, either
buying goods and services, or buying securities. And even the fact that
the dollar is used as international currency is by itself a benefit for
the US. I just don't want to complicate the explanation so much; it is
hard enough to understand within the Sesame Street version.
No, of course it's not their fault. I tell them that all the time.
Economics is a hard subject, and it's very counter-intuitive.
The point is that the purchasing power has been moved to
Mexico. That power to purchase could have stayed right
here.
All of this international money swapping is irrelevant.
The people in Mexico now have the power to purchase
goods that could have been purchased by Americans
had the power not left the USA. That is not a judgment
or a complaint. It is just a fact. You did want honesty.
Actually, there is no misunderstanding here at all. The purchasing
power (real wealth) has left the USA and landed somewhere
else. That may be bad or good or in between. But it is
still a fact.
So quit trying to muddy the water with all the currency swapping
stuff. Goods that could have been purchased by an American
are now going to be purchased by a non American. Whether
actual greenback bucks left here and went to Mexico is irrelevant.
It is only hard and counter intuitive when you focus on the
currency(ies) as opposed to the actual _stuff_. I do not
begrudge the people of other countries EARNING the
stuff they get (and they do EARN it). But claiming that
this does not reduce the standard of living for the
working people in this country is a lie. It does. We
can argue that the standard of living of the American
worker is based on economic rent, or that it is unfair
that the people in other sovereignties do not enjoy
that same standard. But we will not be arguing that
the movement of purchasing power to those outside
the USA does not compete with and reduce the
purchasing power of those in the USA. The remuneration
paid to American citizens (of the working class) is
LESS because of the competition from foreign
nationals.
you need to go back and study international economics. Of course the
wealth leaves the US when dollars are spent abroad. They aren't converted to
the foreign currency and repatriated. Among other things, foreign banks and
governments buy massive amounts of US bonds. That gives them a lien on
America's wealth. They can also use the dollars to buy American companies
and properties. Dollars spent on imports or spent abroad are lost
wealth--unless the US can sell an equal amount of our goods abroad to offset
that loss. Since the US runs HUGE trade deficits, that isn't happening.
