Newsletter Draft

I was asked to write an article for our newsletter. Here is the draft, which is currently way too long, but I thought you all might be interested in it:

In August of 2008, financial history was made. Although it wasn’t predicted to happen until 2017, Social Security lost money for the very first time. This turning point was certainly expected to occur at some point, but the combination of the aging Baby Boomer generation and the Great Recession brought on this event much sooner than imagined. As Social Security is running out and we continue to live in an economy that is very slowly recovering, what solutions can we provide?

Regardless of your personal philosophy surrounding federal spending and the size or influence of the national government, something must be done quickly in order to ameliorate this growing problem. The current chair of the Federal Reserve, Ben Bernanke, has advocated some combination of raising taxes, reforming entitlement programs, and reducing spending in everything from education to defense. But this ignores the many innovative solutions that are being ignored. Curiously enough, one of the solutions being proposed is to encourage immigration to our nation.

Immigrant-owned businesses generate roughly 11.6% of all business income in the

United States, and Immigrants are 30% more likely to start a business than non-immigrants. In an economy desperate for entrepreneurship and growth in small business, immigrants are often more likely to provide just this. And some of the more modern and sustainable corporations we are able to proudly call American, were cofounded by naturalized citizens, such as Yahoo and Intel.

But even this kind of economic impact from naturalized citizens doesn’t come close to equaling the kind of positive impact that could occur when it comes to solving the Social Security problem. Florida Governor Charlie Crist is currently advocating expanding the path to citizenship so that we can increase the number of citizens paying into Social Security. In order to increase the amount of money coming into Social Security, we must find a way of increasing the workforce, and immigration presents an appealing opportunity.

Robert Reich, former Secretary of Labor and current economics and policy professor at UC Berkeley, claims that the main issue with Social Security is our aging population. Not only are more Baby Boomers reaching retirement age, but they are living longer as well. And this aging population, in conjunction with American families having less children, results in a system that pays more benefits and receives less revenue.

For many reasons the age distribution in the rest of the world tends to be the reverse of what America is experiencing, and these young workers present an economic opportunity that we are not currently taking advantage of.  Entrepreneurship coupled with driving down the age of our workforce could provide an economic booster that would help alleviate the tensions we are currently experiencing with Social Security and even potentially help us to recover from the recession.