Issuing green cards
When I read Christopher Preston’s comments regarding the possibility of issuing green cards to those who might be willing to invest in housing to jumpstart the lagging building industry in Florida, it made a lot of sense. I thought, (although I admit I am somewhat biased as I like and respect Mr. Preston) and so I was surprised at the results of the online poll conducted by marconews.com.
Perhaps the reason was a misunderstanding of what such a program would involve.
Let me suggest a few benefits of a program that would allow legal status to immigrants buying a home. No additional immigrants, just change the nature of that inflow until the excess housing inventory is settled. Housing values would stabilize and in many cases rise. The massive losses because of bad loans that are being subsidized by U.S. taxpayers would be stemmed, saving many hundreds of billions, if not a trillion or more dollars. The excess inventory of homes would quickly disappear and the millions of jobs that were lost as home construction fell into a deep depression would come back. If housing values rise, many families would be able to refinance their homes at lower rates and have more income left over after paying their mortgages. Commissions would end up in real estate agents’ pockets, helping a very battered and bruised group. Hundreds of billions will flow into local businesses, as these new “immigrants” will need to furnish their homes. This could mean as much as a half trillion dollars in sorely needed stimulus in the next few years, without one penny of taxpayer money and actually adding taxes back to governments from local to national. And we are not bringing in one million foreigners, we are attracting one million mostly upper/middle-class new Americans, which, if we are smart in how we do this, will result in more jobs for all Americans.
All of us need to realize that falling home prices means that consumers have to save more for retirement, which results in lower consumer spending, which translates into lost jobs and more homeowners coming under stress — a vicious spiral that is increasing unemployment. There are millions of foreigners throughout the world who would like to come to live in the U.S. While allowing relatives of current residents to come to the U.S. may be a humane and reasonable policy, it does nothing to assure they bring more than that relationship to help them make their way in the U.S.! Some have suggested that starting as soon as possible, we should allow anyone to come into the country who would buy a home. They would be given a temporary visa which would become permanent if they remained responsible citizens after five years.
I agree with those who suggest that initially we take those who buy their homes outright. That means they have enough capital to purchase a home to begin with, which probably means they are educated and have skills. In fact, if they have enough cash to buy a home, that means they would have more actual savings than most U.S. citizens. We would be attracting future citizens with the capital to invest in job-creating businesses and/or who have useful skills to assist in the recovery of the U.S. economy.
Of course, there should be some rules that go along with this proposal. Background checks and references should be required. The home could not be rented for a period of time to help reduce the supply of available housing, and could not be resold for at least two years unless another home was purchased. There should be a minimal price.
Many countries realize that in the coming years there is going to be increasing competition for the best and brightest of the world. We are on the edge of the Baby Boomers beginning a huge wave of retirement. There is going to be a need for skilled workers to replace those Boomers, as well to provide services to the retirees. Further, the promised Social Security and Medicare expenditures are going to start increasing at a significant rate. We are going to need immigrants to help pay for those benefits. Given the controversy over immigration, we may look back with regret in 10 years when we find we are in a serious competition with other nations to attract skilled immigrants. As the saying goes, Let’s not waste a good crisis.
John Mauldin (a multiple NYT Best Selling author and recognized financial expert) suggests the following: I can see no downside to changing our immigration policy for a few years. We solve the housing crisis, stabilize home values, brings hundreds of billions in stimulus to the U.S., and with no taxpayer outlay. For a short time, we substitute one class of immigrant for another, to solve a serious crisis. It is not a matter of immigrants or no immigrants, just which immigrants
So which do you want? Ten percent unemployment and a decade of lower home values and increasing foreclosures, with a slow, muddle through, jobless recovery, or a stable housing market and home construction back to trend?
If you agree with me, I suggest you contact your congressman. And tell them to get into gear! I would like to point out that this proposal is not Republican or Democrat, it is just common sense. I hope we can get broad bipartisan support.
The link to the Wall Street Journal editorial is: http://online.wsj.com/article/SB123725421857750565.html
The links to the white papers are: http://www.frontlinethoughts.com/pdf/Housing_Whitepaper_1.pdf