How to Fix Entitlements? More Immigrants

Given Washington’s obsession with spending, this won’t enter the picture, but this figure—from a recent Gallup poll on immigration—is more important to the future of entitlement reform than any policy discussed by President Obama or Congress:

As Kevin Drum noted yesterday, the “primary reason that Medicare (and Social Security) expenditures are rising over the next 30 years is simply because we’re going to have more old people.” We can solve this by cutting spending on services for old people, raising taxes on everyone else to support these services, or we can take the (relatively) easier option and let more people into the country.

In general, more people means more workers and greater productive capacity. Yes, these people will consume services, but they’ll also be paying taxes. In other words, if the problem with government spending is that the United States is getting older, the obvious solution is to find ways to make the country younger. At the moment, the best way to do that is to allow more immigrants—it’s as simple as admitting a large group of working twentysomethings for every new cohort of Social Security and Medicare recipients. It’s not a direct subsidy, but over the medium-term, adding more people (who work) will make it easier to support retirees. And given the wide demand for residence in the United States—138 million people want to live here!—it wouldn’t be hard to find large groups of young people to live and work in the country.

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