The British establishmentarian magazine The Economist has an idea that, with a little tweaking, could both reduceimmigration to the United States and give us at least $4 billion a year more for, say, the Social Security trust funds.
I have mixed views about the publication; it is flagrantly pro-additional migration and Tory in its politics, as I am not, but it does shed light on some of my issues that get little attention in the American media — such as UK by-elections and politics in Fiji, Montenegro, and Serbia. So I read it.
The MAC sensibly proposed that the price the UK charges for investor visas be increased to a minimum of £2.5 million (about US$4 million), with fast-acting premium ones auctioned off at a somewhat higher price. In contrast, the American EB-5 program gives a family-sized set of green cards to investors who place a mere half a million in a DHS-approved (but not guaranteed) investment. The MAC, in short, is suggesting a price eight times as large as that now charged in the United States, with the money going to the Treasury, not to some shopping mall or condo development, as is the case in America. The assumption is that legal residence in the UK or the United States is worth a lot more to the very rich than we are now charging.
The Economist writes:
An auction would have two clear advantages over the current system: the number of visas could be easily controlled, and they would sell for more. A revenue-maximising government should prefer an auction based on single sealed bids. … More than an “English” auction, where bids are public, this would play on applicants’ fears of missing out, encouraging high rollers to bid closer to what they are willing to pay, rather than just a fraction more than their competitors.
The 1,000 immigrant visas would then be auctioned off with a reserve price of $4 million but with the winner paying a not-to-be-disclosed bonus above that. Assuming all visas were used this would lead to a $4 billion windfall — or much more, perhaps double that — for some good cause. Investors could bring in spouses and unmarried children under 21 as part of the deal.
My suggestion is that the recipient should be the Social Security or Medicare trust funds, on the grounds that both need additional income and the politics of such a decision would be more attractive than simply putting the money in the Treasury.
Getting Congress to do something as attractive as reducing immigration while simultaneously increasing one or both of these trust funds will, sadly, not be easy. The operators of the regional centers, the middlemen of the EB-5 business, would lose scores of millions in fees and would make much more noise and pull many more strings than would the general public, which would stand to gain 40 to 80 times as much as these brokers would lose.
American democracy is usually dominated by vociferous special interests, not the general interest, and this would perhaps be another case of that. But with potentially billions for our elderly — all coming from non-voters — Congress should look at this idea.
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