A Modest Proposal: Use the EB-5 Program to Cut the National Debt
The heart of the immigrant investor (EB-5) program is scheduled for termination or renewal on December 11; if it is kept alive at all, it should be converted to a scheme that reduces the national debt by $10 billion a year.
Currently the program, which causes the admission of 10,000 investors and family members each year, serves as a conduit for money from rich Chinese (who dominate the program) to rich Americans. It provides very low interest loans, in effect, from one elite to another, and is largely involved in funding real estate deals in glitzy parts of New York, Las Vegas, and Los Angeles.
Under current rules, the aliens invest $500,000 per family, meaning about $200,000 per alien, and the family members, in turn, ultimately get green cards. (It turns out there are usually about 2.5 family members for each investment) This is the source of something like $2 billion a year in low-cost loans for fancy projects that probably would, in most cases, be built anyway. (Another part of the program, which gives an alien family a full set of green cards for a direct investment of $1 million in the United States, is rarely used and will continue beyond the deadline.)
The program was initially supposed to fund economic development in depressed and rural areas, but has since been hijacked by urban developers, claiming the creation of jobs. The original idea of wealthy foreigners starting businesses in the United States has similarly been distorted into a passive loan scheme.
The EB-5 program's goal of creating 10 jobs per investment has been totally obscured by the government's willingness to allow the estimation of the indirect creation of jobs, and this has led to much imaginative accounting and a bonanza for the economists who do the estimating.
In my eyes, America has already sullied itself by selling these visas (for private profit) at $200,000 each; since this is the case, we might as well lift that rate to $1 million each, with all the money being used for a public purpose. If all 10,000 visas were distributed this way, it would bring about a $10-billion-a-year reduction in the federal debt.
That proposal would cut the debt without charging a penny to U.S. taxpayers, and without increasing immigration to the United States.
What's wrong with that?
- New York
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