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New Stats and Analysis: “Trump’s Plans for Mass Deportation Would Be an Economic Disaster”

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Read Washington Monthly column from Robert Shapiro, former Under Secretary of Commerce for Economic Affairs (HERE)

Washington, DC As America’s Voice has detailed, not only is Donald Trump’s second term vision for immigration cruel and dystopian, it also carries far-reaching implications to US economic success and output. A new column in Washington Monthly by Robert Shapiro, former Under Secretary of Commerce for Economic Affairs, details the economic catastrophe Trump’s plans would inflict on all Americans. Titled, “Trump’s Plans for Mass Deportation Would Be an Economic Disaster,” Shapiro details how Trump’s agenda – if realized – would result in labor shortages, a massive loss of economic output, higher inflation and trigger a recession. 

According to Douglas Rivlin, Sr. Communications Director of America’s Voice: 

“If you think that going after immigrants will not hurt you because you are not an immigrant, you’re wrong. If you think purging the country of immigrants will be a benefit to U.S. workers and wages, you’re dead wrong. We will all pay a tremendous price for the nativist agenda, in our wallets, in our neighborhoods and in our communities.”

Read on for key excerpts from the Robert Shapiro column in Washington Monthly, “Trump’s Plans for Mass Deportation Would Be an Economic Disaster,” and other recent analysis:

“Donald Trump’s fierce enmity towards immigrants is a central theme of his campaign, as it was in 2016. This time, though, he is offering detailed plans that, if carried out, would inflict misery on a mass level and major costs for taxpayers and the economy. 

…The MAGA attacks on immigration also draw on common fallacies and reckless misrepresentations. For example, the vast majority of unauthorized immigrants have deep ties to their communities and the country, with 79 percent having lived here for at least 12 years and 44 percent for 20 to 40 years. Some also work for businesses, which is the equivalent of 4.5 percent of all employment today. Removing them from the workforce could, at once, bring on a recession while reigniting inflation.

By any measure, a policy that eliminated 4.5 percent of the current workforce, including large numbers of college and high school graduates, would set off serious economic tremors. Using Okun’s Law on the relationship between rising unemployment and GDP, a 4.5 percent drop in employment is associated with depressing GDP growth by more than 9 percentage points. This estimate also includes the impact on other jobs. A recent study of much more modest programs to deport immigrants found clear evidence that they cost other American jobs. By one calculation, deporting 1 million immigrants would lead to 88,000 additional employment losses by other Americans, suggesting that Trump’s program could cost up to 968,000 Americans their jobs on top of the 7.1 million jobs held by immigrants up for deportation.

…Using the latest DHS estimates, the taxpayer costs to deport 11 million people would come to $265 billion—without including their American children or the costs to build and maintain large detention camps. For perspective, $265 billion is equivalent to 11 percent of all projected income tax revenues in 2024 and 30 percent of the Pentagon’s 2024 budget.”

Also this week, writing for The Washington Post, Rachel Siegel detailed some of the economic costs of Trump’s mass deportation fantasies:

“Many economists and business leaders say the job market would suffer from mass deportations of people already working here, especially in sectors like construction and agriculture, which are still struggling to hire after the pandemic.

…That’s because many of the jobs undocumented immigrants hold are also crucial to sustaining other jobs around them. A restaurant, for example, might hire an undocumented worker as a busboy or line cook. The owner also hires servers and hosts — jobs more likely to be filled by native-born workers. If undocumented workers suddenly vanished, that restaurant would have trouble operating. U.S.-born workers are also less likely to want jobs that are seasonal, lower-pay, located in remote places or physically demanding.”

In “Trump’s immigration plan could add trillions of dollars to national debt, fueling inflation and market jitters,” Chris Matthews of MarketWatch reports that “Trump’s tax and spending plans for his would-be second term in office imply a willingness to see the federal budget deficit rise to truly unprecedented levels,” adding “less attention has been paid to the potentially enormous fiscal costs of his plans for the mass deportation of unauthorized immigrants.”

“The social impact of such a policy would be enormous, but investors should also be aware that mass deportation would put an enormous strain on the federal budget: The vast majority of unauthorized immigrants work and pay taxes, but receive very little in federal benefits.

In addition to undocumented immigrants paying income and payroll taxes, they contribute to a growing population of consumers supporting businesses, whose corporate taxes also fill federal coffers.

In an exclusive analysis for MarketWatch, analysts at the nonpartisan Penn Wharton Budget Model estimated the fiscal effects of mass deportation — finding that the removal of one million immigrants would cost the federal government between $40 billion and $50 billion over 10 years, and up to $100 billion if those immigrants were higher-paid workers.

Those costs would compound over time and as the Trump deportation apparatus was built out and became more effective.

‘Those numbers climb to over $350 billion over the next two decades, with that number doubling if focused on the higher skilled,” said Alex Arnon, PWBM’s director of business tax and economic analysis.'”

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