Propaganda Wars Begin: Rejoice For Illegal Immigration Will Boost US GDP By $7 Trillion

One month ago we asked a simple question: at a time when the Biden admin is breathlessly taking credit for a quote-unquote “strong” job market, how is it not the biggest political talking point right now that since October 2019, native-born US workers have lost 1.4 million jobs; while over the same period foreign-born workers have gained 3 million jobs.

How is this not the biggest political talking point right now: since October 2019, native-born US workers have lost 1.4 million jobs; over the same period foreign-born workers have gained 3 million jobs. pic.twitter.com/Z5HVWmQ24C

— zerohedge (@zerohedge) January 15, 2024

A few weeks later, when the grotesque and ridiculous January jobs report hit, we reran the analysis to find something even more jarring. Not only were all job gains in the past year entirely thanks to part-time workers, but native-born workers plunged by a another whopping 560 thousand, bringing the two-month total drop to just under 2 million. This meant that not only has all job creation in the past 4 years been exclusively for foreign-born workers, but there has been zero job-creation for native-born American workers since July 2018 (don’t believe us? go ahead and check the data directly from the Fed).

Source: St Louis Fed FRED Native Born and Foreign Born

Well, little by little our observations went viral, and soon the fact that immigration has been the only source of growth in the US was picked up by everyone from unimportant people such as fake (or is it fax) economists such as Paul Krugman, all the way to the most important person in the world, (with all due respect to Dementia Joe), the Fed chair Jerome Powell, and even the Congressional Budget Office. And that required an immediate propaganda response.

So what does the propaganda blowback against this “biggest political talking point” look like?

Well, let’s start with the NY Times’ pet Goebbels, Paul Krugman, who just happens to be the world’s most overrated economist who in 1998 said that “by 2005 or so, it will become clear that the Internet’s impact on the economy has been no greater than the fax machine’s”, concedes that “all of the increase in employment since the eve of the Covid-19 pandemic has involved foreign-born workers” (but because facts are “political” he mocks that “Trump and those around him clearly believe that immigrants take jobs away from native-born Americans”), and then he proceeds to lose any last trace of credibility liberals may still have in him – since anyone who knows how to click on a hyperlink such as this one can figure it out on their own – when he claims that immigrants “haven’t been taking jobs from the native-born, who are more likely to be employed in their prime working years than they were before the pandemic.” Great, the only problem with that is if one also looks at the quality of jobs instead of just quantity, and finds that all jobs in the past year have been part-time jobs.

Is that the quality of jobs Krugman believes native-born Americans are entitled to? Don’t answer that: it’s rhetorical. As we showed repeatedly, non-immigrant Americans have not gained any jobs in 6 years, so Krugman’s whole argument is one giant strawman.

As for the employment rate among prime-aged native Americans being flat, all Krugman is confirming is that the population of native born Americans is falling just as fast as their employment, which in turn is keeping the numerator and the denominator more or less unchanged. At the same time not only are all new jobs going to immigrants (whether legal or illegal), all of the US population growth is also due to immigrants (whether legal or illegal), which last time we checked, is precisely what the Replacement Theory is all about.

Perhaps for his next propaganda exercise, the Democrats’ favorite economist can answer this question: why are so many native-born Americans so terrified of having families and raising children in this Bidenomical nirvana where everything is so wonderful, and why is all growth, in both the labor force and population, left to immigrants (whether legal or illegal).

Of course, he won’t do that, as that requires figuring out the true nature of the problem which would go against his ideology; and instead he will jump right to the propaganda conclusion which is what one would expect from a professional liar, namely that “Immigrants are really good for the U.S. economy — and nativists really bad.“

All this is short-run; add in huge long-run benefits from immigration in helping us pay for Social Security, Medicare and so on. Immigrants are really good for the U.S. economy — and nativists really bad 6/

— Paul Krugman (@paulkrugman) February 2, 2024

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Of course, if it was just Krugman doing the full court propaganda press we wouldn’t even bother with this response, but we were rather amazed to hear none other than the Fed chair bring the topic of immigration up in his 60 Minutes interview. Luckily, unlike the NYT ecomedist, Powell’s take was far more accurate, if much more sinister. For those who missed it, here is what Powell said when host Scott Pelley asked him why the return of immigration to the US after the Pandemic (when Trump locked down all the borders) was so important:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that’s largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed’s job. The immigration policy of the United States is really important and really much under discussion right now, and that’s none of our business. We don’t set immigration policy. We don’t comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that’s what’s been happening.

Two points here: first, whether he meant to or not, Powell just insulted a few hundred million native-born Americans who reportedly do not work at a “rate that is above that for non-immigrants”, i.e., they are plain old lazy, and then there is the far more ominous insinuation: when Powell says that a “big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era,” what he really means is that the reason why inflation has fallen so fast since peaking in June 2022 (at 9.1% YoY) without a corresponding surge in the unemployment rate, is because immigrants (whether legal or illegal) were replacing the jobs of those native American workers who were leaving the labor force! Or said otherwise, you have Replacement Theory to thank for the drop in inflation (i.e., wages) which would not have been possible without the surge in immigration, which in turn is why native-American workers haven’t seen any job gains in 6 years!

Which also explains why private worker wages have indeed tumbled in the past two years, even as government wage growth has exploded to an all time high. That’s right, Replacement Theory for thee… just not for the Deep State, which is taking all the benefits of sliding wages (thanks to Paco mowing your lawn again), and pushing wages of government workers (i.e., the Deep State) to an all time high!

But while Powell’s attempt at spinning immigration (almost entirely of the illegal sort since that’s where the bulk of workers came from in the past two years) was at least grounded in truth – and is why the ominous conclusion of why all this is taking place emerged – the third and final propaganda shocker came from none other than the “bipartisan” Congressional Budget Office, which this week published its latest “Budget and Economic Outlook: 2024 to 2034“, and which not surprisingly for an election year, came out decidedly more optimistic than last year’s edition, largely due to a handful of ridiculous assumptions about the future US budget and deficit, which we will discuss in a subsequent post – some of the “highlights” are i) no recession for a decade, ii) unemployment rates peaks just over 4%, iii) inflation peaks at 2%, iv) discretionary spending declines drastically largely due to a big drop in Medicaid spending – yet even with all these ludicrous cherry-picked assumptions, US debt/GDP still rises to catastrophic, hyperinflationary 172% by 2054.

Anyway, since it is an election year, the CBO – whose forecasts have been dead wrong and overly optimistic every single year this century – was tasked with coming up with some optimistic talking points for the Biden admin, like how many trillions in nominal GDP growth the US economy will add if it maintains the current course over the next decade, and it did as ordered. In fact, it did so well, that the WaPo’s favorite economic columnist and spin master, Catherine Rampell, was effusive in her praise of the CBO forecast on X (formerly twitter). To be sure, not even she could mask the fact that the US is on an unsustainable fiscal course, pointing out that “Thanks largely to those higher-than-previously-expected interest rates, CBO raised its estimate of net outlays for interest over the next decade by $1.2 trillion (or 11%)” (spoiler alert: outlays due to the soaring interest will be orders of magnitude greater).

But what matters for this analysis is the CBO’s punchline, and what one item they goalseeked to get to their mandated economic increase. Can you guess where the bulk of economic growth comes from?

Why, that’s right: immigration!

Here is how the CBO’s labor force forecast looks like today vs a year ago. Why the surge? Well, as the CBO explains, higher population growth through 2026 is “mainly from increased immigration”, which “more than offset a decline in labor force participation due to slowing demand for workers and the rising average age of the population” – translation: more immigrant workers, fewer native-American workers. And that’s not all: according to the CBO, “a large proportion of recent and projected immigrants are expected to be 25 to 54 years old – adults in their prime working years.“

And there’s your Replacement Theory again, only this time with a beautiful spin, one which as the WaPo columnist was delivered by none other than CBO Director Phill Swagel, who writes that “as a result of those changes in the labor force, we estimate that from 2023 to 2034, GDP will be greater by about $7 trillion and revenue will be greater by about $1 trillion than they would have been otherwise.”

From CBO Director Phill Swagel: “As a result of those changes in the labor force, we estimate that, from 2023 to 2034, GDP will be greater by about $7 trillion and revenues will be greater by about $1 trillion than they would have been otherwise.”https://t.co/751mWoOqNL pic.twitter.com/xsJS0ROpPc

— Catherine Rampell (@crampell) February 8, 2024

And so there you have it. One month ago we wondered how the surge in immigrant workers is “not the biggest political talking point right now.”

Well, just a few weeks later, it is emerging as just that, and the propaganda response has been staggering, with establishment figures such as Krugman, who accuses anyone that believes immigration is bad as being part of the lumpenproletariat, which ironically is a Marxist term…

“No, A.I. and automation, for all the changes they may bring, won’t ultimately take away jobs, and neither will immigrants. Don’t join the lumpencommentariat” – source

… Powell, who accuses native-born workers of being lazy and claims that immigration is helping defeat the inflation that his policies unleashed…

“… a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.” – source

… and finally the CBO…

“The labor force in 2033 is larger by 5.2 million people, mostly because of higher net immigration. As a result of those changes in the labor force we estimate that from 2023 to 2034, GDP will be greater by about $7 trillion and revenue will be greater by about $1 trillion than they would have been otherwise.” – source

… all coming out in full-throated support of immigration (mostly of the illegal, inflation-crushing because wage-hammering variety).

To be sure, many rational voices – even those of conventional economists – have come out to challenge these ludicrous assumptions and conclusions, but none of them will be heard because as it should be abundantly clear by now, immigration will be the decisive factor of the November election, and if the Biden propaganda machine can kill two birds with one stone, namely that (illegal) immigration is actually great for the US and will end up boosting the economy by trillions, all the better.

And so, with the election still nine months ago, expect the topic of how illegal immigration is the greatest thing imaginable for the US, to dominate the airwaves of the liberal mainstream media which is also the most vocal propaganda channel available to the establishment, whose fate is now contingent on convincing hundreds of millions of Americans that all those tens of thousands of illegals entering the country every day thanks to Biden’s open-border policies are actually the best thing that could happen to them.