The Loudoun County School Board’s proposed fiscal year 2009 operating budget contains a massive increase in spending on English as a Second Language (ESL) instruction which dwarfs the percentage increases in other areas of the schools budget (and in the overall Loudoun County operating budget as well). In fact, in real terms the proposed ESL budget of $20,682,481 is 34% higher than proposed school expenditures for English, Mathematics, Science, Physical Education, Music, Foreign Languages and Gifted/Talented Education combined ($15,341,354).
As the Washington Examiner reported last week, Prince William County public schools reported over 600 ESL students left the system following that county’s crackdown on illegal aliens. This reduction of students would equate to a roughly $8 million reduction in expenses for the school system alone. Verifed and anecdotal evidence (from the news story and what we have seen here in Loudoun) suggests many of those illegal aliens have headed north into neighboring jurisdictions.
A decrease of 600+ ESL students is a huge shift, which suggests strongly that a large number of Prince William’s illegal immigrants had been sending children to school in Prince William County. To a significant extent it appears the effect has been moving north – here – to Loudoun County.
As Loudoun School Superintendent Ed Hatrick notes below, 63% of ESL students in this county come from households where Spanish is the primary language spoken at home. According to national surveys also detailed below, the vast majority of Spanish-speaking immigrants who have arrived here in the past ten years and / or are not fluent in English are here illegally. Therefore, it is not unreasonable to assume that the increase in ESL students in Loudoun County public schools is directly related to the influx of illegal immigrants in Loudoun County.
In fact, to make the only alternative argument – that Loudoun County has seen a massive influx of LEGAL Spanish-speaking immigrants in recent years – would fly in the face of all statistical data as detailed below. There is no controversy or national debate over legal immigration from Latin America. The entire debate is over the reality of illegal immigration. The incredible increase of Spanish-speaking households in Loudoun County – as politically incorrect as it is to say so – is certainly a result of illegal immigration.
Bottom line: Loudoun County’s legal residents are paying for the children of illegal immigrants to attend our public schools.
It should also be noted that ESL as it is practiced in Loudoun County Public Schools is conducted according to the principles of “structured immersion.” What this means is, instruction is conducted in both English and Spanish. There is a fair amount of leeway as to how this can occur. In the optimal case, students are taught primarily in English. However, in practice this mode of instruction allows for substantial instruction in the “primary language” – which means both printed materials and classroom instructors in Spanish language.
The objection taxpayers may have to “structured” immersion is that it puts a lot of money into accommodating foreign language speaking students in order to move them ahead grade-wise. It is not necessarily sink or swim in English; it can mean setting up a parallel course of instruction at every level which is exponentially more expensive and definitely detracts from spending on English-language instruction. Basically, taxpayers are paying for courses to be taught in multiple languages.
While I am not privy to Loudoun County’s procedures, the question remains whether Loudoun County taxpayers are funding Spanish-language instruction in our public schools while the expenses are skyrocketing and other priority areas are suffering.
The key question is whether Loudoun County taxpayers are paying for the education of people who should not be here in the first place, and whether those people are paying into the tax system. Yes, illegal aliens pay sales tax. We would ALL like to have that deal, because sales tax is a pittance. The truth of the matter is illegals have a huge advantage in living here “off the books” except for the fact they can send children to our schools.
The Supreme Court has said – so far – that once the illegals are here, we have to pay for their education. What this entire Loudoun County budget discussion should evoke is a discussion over whether they should be here at all in the first place, considering our fiscal situation.
Most residents familiar with the Loudoun County fiscal situation know that spending on schools represents the largest part of the overall county budget. (Summary here.)
In the current proposed FY2009 budget, the schools expense of $781,701,000 comprises 67% of the total county budget figure of $1,163,651,000.
Compared to actual expenses of the 2007 fiscal year, spending on schools in FY2009 would increase about 29%, from $606,465,800 to $781,701,000. During the same period, the budget for “general government” – meaning the entire remainder of what Loudoun County does – is set to increase by $43,301,352, about 13%, from $338,648,648 to $381,950,000.
After factoring in cost increases related to employees’ cost of living and higher prices, the general government budget includes about $7.5 million in “enhancements,” in part to provide additional personnel to serve a growing county population (see Executive Summary, page E-15).
In other words, all of the new stuff in the 2009 Loudoun County budget accounts for $2 million less than the increase in proposed ESL spending. What does that say about our priorities? What would the typical Loudoun taxpayer say about that, I wonder?
Now let’s turn our attention to the proposed FY09 budget proposed by the Loudoun County School Board.
Schools Operating Budget Document here
Schools
FY07 Actual: $606,465,800
FY09 Proposed: $781,701,000
29% increase
$175,235,200
Additional $128 million requested by the School Board for capital expenditures
English as a Second Language (p. 72)
FY07 Actual: $11,290,148
FY09 Proposed: $20,682,481 – 337.5 full time employees
83% increase
$9,392,333
It is worthwhile to recall that in 2004 the ESL expense figure was $5,633,606 – the amount proposed for this year represents a 265% increase over five years, or $15,048,875.
Gifted Education (p. 84)
FY07 Actual: $6,693,480
FY09 Proposed: $9,122,106 – 73 full time employees
36% increase
$2,428,626
Foreign Languages (p. 80)
This consists of Grades 1-6: Spanish
Beginning in Grade 7: French, German, Latin, Spanish, PLUS Spanish for Fluent Speakers (I & II, with level III to be added in 2009)
Beginning in Grade 9: Mandarin Chinese addition to the above
FY07 Actual: $512,733
FY09 Proposed: $799,255 – 3 full time employees
56% increase
$286,522
Health and Physical Education (p. 88)
FY07 Actual: $390,818
FY09 Proposed: $532,006 – 3 full time employees
37% increase
$141,188
Mathematics (p. 110)
FY07 Actual: $657,989
FY09 Proposed: $983,225 – 4 full time employees
49% increase
$325,236
Music (p. 118)
FY07 Actual: $842,711
FY09 Proposed: $1,607,430 – 3 full time employees
91% increase
$764,719
Science (p. 145)
FY07 Actual: $758,095
FY09 Proposed: $1,295,294 – 4 full time employees
71% increase
$537,199
“Regular Education” (p 133)
FY07 Actual: $242,245,675
FY09 Proposed: $311,622,664 (3486.9 full time employees)
29% increase
$6,9376,989
It is important to note that the school budget document includes a massive amount of spending on ESL relative to other areas of the Loudoun County public schools curriculum. Part of this imbalance can be explained as a function of how the numbers are reported. Expense for teachers is included in the “Regular Education” line item, for instance, so it is safe to assume that some of our Science and Math investment is included in this line item. However, ESL is also included in “Regular Education”.
So while the schools department may argue that that we’re spending more on Math and Science than is detailed in those budgets, we must also conclude that spending on ESL is similarly expanded in the “Regular Education” budget.
I called the school department and spoke with a communications representative for about 10 minutes recently, in an attempt to figure out how the expenses were actually being divied up between the departmental line items – in which ESL spending is so exorbitantly higher than most other educational areas – and “Regular Education.”
The staff member could not explain why there was such an amazing discrepancy, and said she would have a higher-up employee contact me. No one has called. What this suggests to me is that Loudoun County Public Schools spending on ESL has increased exponentially relative to other areas of the curriculum, and our investments in English, Math, Science, etc. have been suboordinated to spending on bilingual education.
Overall county budget
FY07 Actual: $57,744,306
FY09 Proposed: $70,390,000
22% increase
$12,645,694
FY07 Actual: $42,514,705
FY09 Proposed: $49,683,000
16% increase
$7,168,295
FY07 Actual: $4,013,121
FY09 Proposed: $4,779,000
19% increase
$765,879
FY07 Actual: $27,571,867
FY09 Proposed: $30,954,000
12% increase
$3,381,133
FY07 Actual: $30,770,934
FY09 Proposed: $32,651,000
7% increase
$1,880,066
Parks, Recreation and Community Services
FY07 Actual: $27,603,459
FY09 Proposed: $32,929,000
18% increase
$5,325,541
FY07 Actual: $516,962
FY09 Proposed: $580,000
12% increase
$63,038
As we can see, the increase in ESL spending would result in a much higher investment than in other areas of the County budget.
Background information
School Board Q & A with Ed Hatrick:
P 45: Middle and high school ESL classes are provided with appropriate English language materials as well as textbooks in which language and academic content are taught.
P 46 Why are we not using an immersion strategy for ESL students?
As reference on page 72 in the FY09 Superintendent’s Proposed Operating Budget document, the ESL program in Loudoun County uses a structured English language immersion approach. Approximately 63% of the ESL students are from Spanish speaking households; the remaining students speak 88 other languages. English is the common (immersion) language for all students. Instruction by ESL teachers is provided in English.
Data From Other Sources:
- Structured immersion: In this program, language minority students receive all of their subject matter instruction in their second language. The teacher uses a simplified form of the second language. Students may use their native language in class; however, the teacher uses only the second language (Snow, 1986). The goal is to help minority language students acquire proficiency in English while at the same time achieving in content areas.
- In Years 4 and 5 we also found that the amount of primary language support was inversely related to second and third grade gains in reading and ELA.
- In addition to the teacher, there may be an ELD instructional assistant assigned to the class to provide primary language support, or the school may have special materials in the primary language, usually Spanish, which will help the student to comprehend the core academic subjects.
- …critics warn it is an expensive plan that segregates English-language learners for most of their school day and limits their lessons in core subjects, such as math, science and history.
- Taken together, unauthorized migrants from Mexico and Latin America represented 78% of the unauthorized population in 2005.
- An estimated 43% of Salvadoran population in U.S. is residing here illegally (higher share of adult population); More than 55% of Mexican population in the U.S. is illegal; Roughly 47% of Honduran population is illegally resident.
- Who Left The Door Open? (Time magazine 2004)
- Ninety-four percent of Hispanic citizens speak English well. In contrast, 69 percent of Hispanic immigrants do not speak English well or at all.
Most unauthorized migrants come from Mexico…Of the Mexican migrants in the U.S. less than 10 years, the Pew Hispanic Center estimates that approximately 80 to 85% are unauthorized.
While the shares from different regions have hardly changed in the last few years, between 2000 and 2005, the number of unauthorized Mexicans increased by 1.5 million, from 4.7 million to 6.2 million (Figure 5). During the same time period, the number of unauthorized migrants from Central America increased by 465,000, to 1.4 million; those from South and East Asia by 365,000, to 1.4 million; and those from South American by 160,000, to 705,000.
UPDATE: As our friend and always spirited debater Laura V has asked in the comments, How do we know the students who left the Prince William County ESOL program were illegal or the children of illegal aliens?
My response is, it seems like a safe assumption. But don’t just take it from me or your own common sense, here is WJLA’s take:
It’s illegal for schools to ask immigration status, but the assumption is many of the ESOL dropouts are in the country illegally or even more likely, they are children of illegal immigrants.
Honestly, I would be surprised if that was not Laura’s assumption as well.
Tags: ESL, Loudoun County
Ed Myer.
“when I made the purposefully absurd comparison to littering you understood–it is justice we seek and not blind adherence to laws for the sake of legalism.”
1. What part of give unto Ceaser don’t you get? Or are you above the law? There is nothing inherently immoral with immigrations laws. Nor is their anything inherently socialist about them. Tell me, is the prerogative of a nation to control its own borders a valid one? In short, until the law is changed we are called to obey it.
2. When illegal aliens create a black market economy it corrupts the society at large. The link between black market economies corruption and the ensuing poverty has been demonstrated. I provided you a link to an earlier article that discussed this, did you read it? Do you feel that increased public corruption and a lowering of wages is a good thing, because that is the outcome of the policy you are supporting.
3. Agreed, the absurdity of your comment requires no further comment.
“So when people say the mantra “what part of illegal don’t you understand” and don’t address the social justice issue I suspect the mantra either covers shallow thinking or worse they recognize that they benefit from the injustice and want to hold on to their unfair advantage by covering it with the law and order fig leaf.”
Getting personal again? The only shallow thinking I see is your knee jerk response that those who oppose an illegal alien based black market economy are somehow both racist and benefiting from their labor.
Until you become God, please refrain from judging the intentions of others. As a mere human you and everyone else is singularly bad at this. Such mind reading historically has lead to war and murder. I see the socialists and liberals continuously engaged in this, are you a socialist or a liberal?
You never answered my earlier question regarding the impact upon the honest tradesmen who have lost their jobs. Do you prefer to prattle on self righteously or are you capable of addressing a question?
Sanity :
So do I hear you joining those of who want to CUT federal spending ? If so, welcome aboard.
Let us start by doing away with the Dept of Education. You with me ?
From there I have a nice list of agencies that can go bye-bye based on the fact that they are a complete waste and or unconstitutional. You with me ? lets start cutting NOW!!!
Greg,
What a totally ignorant statement. One does not reduce the federal debt by cutting spending, reducing the number of agencies. That is bad for the eocnomy. The federal government wisely directs our money into useful endevors, like teaching children how to cloth a cucumber with a condome, or, buying airline tickets but not putting anyone in the seats.
Cutting spending will lead to the cutting of taxes which we know since the econmoy is linear, and their is NO synergy to speak of what so ever, will lead to the rich getting richer. The rich are inherently evil, and will not grow the size of their companies and hire anymore people, nor will they spend the extra money in any meaningful way like the government can.
I am still waiting to get a job from a poor person. Can you help?
Sanity – You LOVE the word ignorant, I see you use it frequently. Please self reflect, or at least re-read posts so that you don’t continue to make an ass out of yourself.
Where in my original stmt do I blame only Jimmy Carter on all of our debt? It reads :
“The best hope I have for my kids is that they don’t get saddled with the unbelievable debt and continued spending (fed, state and local) we have seen spiral out of control in the past 3 decades, coincidently since the dept of education was established. Thank you Jimmy Carter.”
Notice the word SINCE. I won’t debate the Reagan Administration with you, but it did grow the economy exponentially, cut taxes dramatically, rebuild our decimated Armed Forces AND fight and win the cold war, but that is for another day.
I make no excuses (but for the war, another debate) for any administration on spending in the last 15 years – pick your poison – Clinton or Bush. If you want to make some kind of arguement that the Democrats are stalwarts of spending cuts, I am going to have to excuse myself till I stop laughing.
Regardless, we are talking about LOCAL taxes here, which I cited above with Fed and State. I vote for abolishment of the Department of Education and a dozen more Federal agencies, but on the local level we have a different story.
Nice try InSanity.
C: Come talk again when you learn how to write. And it’s YOU who wants to abolish the Department of Education?
If you’re talking LOCAL taxes, why mention all of the government agencies? If you’re talking LOCAL taxes why mention Jimmy Carter? If you’re talking the Department of Education, then my comment stands that it’s so tiny compared to the deficits racked up by Reagan and Bush(es) that it’s silly to even mention it. Much better to mention the irresponsible tax cuts that show near-term growth but only because we’re spending beyond our means.
I can show a lot of growth in my personal life by spending my 401(k) and hocking my credit cards up to my eyeballs. My house can get bigger, my car can get nicer. Wow! I’m successful! Of course, eventually, it’ll catch up. Sooner for me since I can’t print my own money.
Jacob and/or McCathy: Can you come up with a concrete example of when either party has reduced government spending? Even in the “conservative” Reagan years, government spending increased at a rate greater than inflation. At least the Democrats have the honesty to pay for (most of) their spending instead of leaving it for future generations and selling our country to the Chinese.
The Repubs have been an economic disaster for this country for at least 27 years. Unfortunately, the majority of the chickens have not yet roosted. When they do, look out. Of course, folks like you will blame (a) Democrats, (b) the poor, (c) the muslims, (d) the Martians, (e) anyone else that you can’t see looking in the mirror.
Amazing how you can get people to believe that Repubs are for smaller government while you spend like Paris Hilton with an unlimited credit card. One of these days, perhaps, the reasonable people (of which there are very few on this blog) will understand that the Democrats are the real economic conservatives.
Sanity: I don’t want to come talk to you, but thanks for the smug and uninviting invitation.
I mentiond COMBINED taxes and the reluctance to saddle my children with debt from all levels. You seem to miss key words like “since” and terms that require thought like “fed, state and local (combined).” Please get your eyes checked.
Jimmy Carter is just the weenbag that started the whole education mess down the bureacratic spiral it is languishing in today. Trickle down the spending to the state and local level and you have one huge price tag and nothing to show for it.
I never defended the Bushes, but I will include Clinton in the overspenders club. That you can’t be intellectually honest and do the same is very telling.
Thanks for the laugh of the day “Democrats are the real economic conservatives.” Wow.
Sanity,
“Can you come up with a concrete example of when either party has reduced government spending?”
Good question, Not in the past 70 years. Before that the government budget did go through periods of actual reduction in spending both in total dollars and inflation adjusted dollars.
Reagan wanted to, he ran on it, but he also wanted to rebuild the military. There was this issue of the Soviets. I remember the old saying “the President’s budget is DOA” upon arrival at the house of representatives. In order to get his military spending he had to make deals with Tip O’Neil, and O’Neil wanted domestic spending.
Gramm-Rudman was the last gasp of the budget hawks. Its been a non stop fiasco for as long as I can remember.
inSanity,
“The Repubs have been an economic disaster for this country for at least 27 years. Unfortunately, the majority of the chickens have not yet roosted. When they do, look out. Of course, folks like you will blame (a) Democrats, (b) the poor, (c) the muslims, (d) the Martians, (e) anyone else that you can’t see looking in the mirror.”
Still acting like a jerk I see. The Democrats controled the congress until 94. The Democrats had the presidency for 8 years. The Democrats before 94 controlled the congress for forty years. But it is all the Republicans fault. You are an idiot.
Insanity,
the big budget drivers are social security, medicare, medicaid, all of which are going to go bankrupt starting in 10 years. The Democrats want to extend medicare to all of us and nationaise the health industry. This is helpful in your eyse i am sure. Spending under Clinton inhis last 4 years of office was over grew 11% per year. I know to you the country was Nirvana under Clinton despite the Newt gingrich led congress, but did the eocnomy grow 11% per year?
If the answer is no then ask who wrote the budget that got passed?
Insanity,
One more thing, before Reagon we had Carter, I assume that you can tell me what a rip roaring success the economy was under Carter, right? You can tell me about the low inflation? You can tell me how we were winning the cold war. You can tell me about how boldly we dealt with Iranians. And then in comparison to that you can tell me how Reagon turned it into a disater, despite 96 straight MONTHs of economic growth.
Jacob – I was a bit young in the late 70’s but I do remember the Carter years, the gas lines, interest rates for cars being 13-14%, out of control inflation, mortgage crisis as in no one could afford to finance a home, dilapidated military and an inept Commander in Chief. Remember the misery index? Maybe Insanity is too young to remember or too blind to read the truth, but those were rough years for the whole country.
Cathymac,
Insanity would not know the truth if it bit his behind. As a member of the socialist wannabe party a.k.a. the Democrat party he is only capable of blaming the Republican for everything from global warming, to 9/11 to bad breath.
If we all could just get as smart as him we too could blame all the countries problems on one half of the body politic. All it requires is a willful suspension of disbelief.
Jack, (#50)
As long as wages are allowed to fall (i.e. no minimum wage) no one will be out of work no matter how many people there are. The extreme case is that everyone is volunteering (working for free.) in a commune. The opposite case is the minimum wage is so high no one has any work.
I assume most illegal immigrants earn close to the minimum wage or about $25-30K per year because of long hours and multiple jobs. Put those numbers into Turbotax and do a tax return. You’ll see that if they were legal they would not pay any state or federal income tax and that the Earned Income credit would rebate them their Social Security and Medicare payments. So low-wage illegals paid in cash are not cheating on taxes because even if they were legal they wouldn’t owe any. So any discussion on cheating should focus on employers (who maybe aren’t paying FICA or Medicare for cash employees) and not the illegal immigrants. So the cost difference between illegals and legal workers is probably around 7.5% for the employer part of FICA. Very few business would risk hiring illegals for this minor savings so I suspect the reason they do hire them is because there is a shortage of legal workers and it is the only way to get the job done.
Socialism is an economic system. Don’t confuse it with communism which is a political system. Usually communistic governments prefer socialistic economies and democracies capitalistic ones. However Europe is more socialistic than we and China, although communistic, has some free market areas (e.g. Hong Kong) that are more capitalistic than the US.
I know of no one who considers Fairfax in economic peril because workers send money home to Loudoun to be spent. Money, goods and services easily move from one region to another. So the 10% of an illegal’s income that is going to Mexico comes back as purchases of American goods and services (e.g. hollywood movies, music,etc.) Or, in the worse case Mexicans hold on to the dollars (like China) and essentially gives us a loan at 0% interest.
The hypothetical $10/hr worker replaced by a $5 illegal immigrant is a swiss cheese of holes. If a worker is only outputting $5 worth of labor and demanding $10 in wages then he is stealing $5 per hour from society. (This is the auto labor unions of the 80’s.) A company concerned about the efficient allocation of resources will either outsource that work and fire the employee or go out of business and be replaced with a better run company. Eventually employees who cheat lose their jobs one way or another unless the government steps in (socialism again) and uses immigration quotas or import duties as a protectionist wall to allow the worker to keep stealing from society. You don’t have sympathy for migrants who you falsely accuse of stealing but seem sympathetic to the ones who are actually stealing. Why?
Your analogy may have been based on the faulty assumption that illegal workers are cheating $5/hour on taxes which I debunk 4 paragraphs up. I’m sure lazy employees love to blame immigrants for the lost of a cushy job. But employees that keep current in skills and work hard are worth a big premium (maybe even double) over any immigrant (illegal or otherwise) because they have language and cultural understandings that make them more productive and less prone to mistakes than foreigners in the same job.
Fairness comes by matching worker productivity to income through a free market system. A socialistic stucture (immigration law) that contains immigrant quotas is rule-based but unfair. (It is really strange to hear protectionist rhetoric coming from economic conservatives. That used to be a sign that someone was a liberal Democrat. Did Americans play ideological musical chairs without telling me?)
Jacob demanded (#51) that I answer his question. Hopefully I have, again, already.
However, I suggest you not use Jesus to support immigration restriction and a rule of law argument because it doesn’t work. His parents broke the law and migrated to Egypt to save him from Herod’s infantcide. During his ministry he frequently crossed boundaries (e.g. into Samaria) to work. The render to Ceasear quote is more a reminder of separation of church and state than support for the righteousnous of all government laws. (My suggestion: Read Romans 8 because it has better quotes to fit your side of the argument.)
And know in advance this is my rebuttal: “The stranger who resides with you shall be to you as the native among you, and you shall love him as yourself, for you were aliens in the land of Egypt; I am the LORD your God.” Lev 19:34.
Sanity?
You talk about the GOP and how it spends out of control. I got a question for you. Who squandered all that money when Carter sold the Panama Canal? He did what? Gave it away? And we got what in return? Nothing? But you say he can paint? WOW!!!!!
Let’s try this again. You’re an idiot…..I mean a real economic conservative.
ACT,
You can rag on Carter and Sanity all you want, but there is no denying the outrageous amounts of tax payer money the GOP has spent.
In this regard, there seems to be little distinction between the GOP and the Dems. This is the primary reason my Republican Party membership card is rotting in the LoCo landfill, and I am now an independent.
Ed Myers,
“And know in advance this is my rebuttal: “The stranger who resides with you shall be to you as the native among you, and you shall love him as yourself, for you were aliens in the land of Egypt; I am the LORD your God.” Lev 19:34.”
Well said, but we are generous, to a fault. Look at how others were treated for wandering in uninvited from a historical standpoint and you will see we have been incredibly generous. To the point that we are engaged foolhardiness, for in many ways more generous to the stranger than to ourselves.
Anything taken to the extreme leads to insanity, misery and death, go to Proverbs 25:16, or 22:3.
I repeat, history is not kind to countries that do not control their borders. God is sovereign in all things, as it is written ‘there is nothing new under the sun, to expect a different outcome now would be to test Him.
As for the applicability of Romans 8, if you are trying to stuff “If God is for us, who can be against us?” into my mouth then you should be ashamed for immigration is not a spiritual but an earthly matter. I recommend you read Joshua 5:13-14 on who is with God and whether God is ‘with’ anyone.
As a return to giving Caesar his due look to Prov 10:9, bending the law is a hazardous route.
Jacob, sorry, it’s Romans 13 that is your strongest biblical arguement:
“Let every person be in subjection to the governing authorities. For there is no authority except from God, and those which exist are established by God.
Therefore he who resists authority has opposed the ordinance of God; and they who have opposed will receive condemnation upon themselves.
For rulers are not a cause of fear for good behavior, but for evil. Do you want to have no fear of authority? Do what is good, and you will have praise from the same; vs4 for it is a minister of God to you for good. But if you do what is evil, be afraid; for it does not bear the sword for nothing; for it is a minister of God, an avenger who brings wrath upon the one who practices evil.
Wherefore it is necessary to be in subjection, not only because of wrath, but also for conscience sake. For because of this you also pay taxes, for rulers are servants of God, devoting themselves to this very thing. Render to all what is due them: tax to whom tax is due; custom to whom custom; fear to whom fear; honor to whom honor.”
I think this needs to be tempered with the stories (e.g. of Daniel and others) who honored God by defying government authority that sought to displace God by having citizens worship government. The extreme of Romans 13 is idolatry. Government, although ordained of God, is not the moral authority of God. We start assuming laws are moral but must keep checking whether they really are moral.
I don’t understand your reference to history not being kind to countries that do not control their border. Are you saying that the US would have been much better had the hords of immigrants from Europe and Asia during the past 250 years stayed home?
Land is the critical resource in an agrarian economy. In an industrial economy it is natural resources. In a knowledge economy it is people. Do you want us to go back to an agrarian economy which views migrants as threats to the food supply or forward to a information age where migrant people are gifts of knowledge and experience.
The US is in a transition from industrial to a knowledge economy. In Loudoun we have already replaced the farms with AOL and Janelia. I start with the view that migrant people are a gift and not a threat. I am open to concerns about the little rule of law things such as residential overcrowding but we are far apart in viewpoint if you are thinking that we are better off if people and their innovations and knowledge growth occur somewhere else.
“As long as wages are allowed to fall (i.e. no minimum wage) no one will be out of work no matter how many people there are.”
Not much of a historian, are you? There was unemployment long before there was a minimum wage, and there are many countries now without minimum wage and with high unemployment. Please go read The Wealth of Nations.
“The extreme case is that everyone is volunteering (working for free) in a commune.”
That assumes they have land to farm. Labor cannot produce anything without something to work ON, which Smith calls “stock.”
“The opposite case is the minimum wage is so high no one has any work.”
Like unions — they negotiated themselves right out of work.
“You’ll see that if they were legal they would not pay any state or federal income tax and that the Earned Income credit would rebate them their Social Security and Medicare payments. So low-wage illegals paid in cash are not cheating on taxes…”
I never said they were. I said the EMPLOYERS were. Please pay attention. Even if what you say about the tax rebates is correct, the EMPLOYERS’ contributions are not refunded. There are other payroll taxes as well (unemployment, for instance).
“So the 10% of an illegal’s income that is going to Mexico comes back as purchases of American goods and services (e.g. hollywood movies, music,etc.)”
Right — that’s why we have a trade deficit with Mexico.
“Or, in the worse case Mexicans hold on to the dollars (like China) and essentially gives us a loan at 0% interest.”
WHAT!? Fine. I’ll give YOU a loan at 0% interest. Let me know when I can pick up the money.
The fact is that when the labor pool increases, wages decrease. So when we have an influx of illegal immigrants, wages go down. Since they are here illegally, it is perfectly understandable that people that lose their jobs to illegals feel that they have had their jobs stolen.
Now, what law did Joseph and Mary break when they went to Egypt? Did Egypt have immigration laws? Did Samaria?
Jacob – I wish I could blame my dog’s bad breath on the Republicans, or Insanity for that matter. He is sitting by me right now and it is simply awful.
Dan, I feel your pain, I make no excuses for the Republican spenders. It is one of the reason the Republicans lost in the mid-term elections, and the current fight within the party needs to happen. Our conservative principles have been compromised by party leaders and I don’t think there is a conservative on this board that would argue on their behalf.
Cathymac,
“He is sitting by me right now and it is simply awful.”
Ok, I could read this as inSanity is sitting right by you, possibly with bad breath, and it is simply awful. Which I would not doubt, or, it’s the dog. I will assume it’s the dog.
Jack,
re: interest free loans:
When lots of countries hold one country’s currency in reserve, that country has some leverage powers.
look up “seigniorage.” I don’t think it’s in Smith.
Basically, it’s like this: say you and I are stuck on a desert island (yay!), and there’s nothing on the island but a mint (maybe there’s a gold nugget in the mint to back up the currency it produces), which happens to be on my side of the island. Now let’s say I use the mint to crank out $200. being a communist, I would give you $100 and keep $100. We’re even, our holdings each represent 50% of the island’s wealth.
Now let’s say after some time passes, Don the Beachcomber shows up and decides there’s a market a tiki bar. So he asks us if we’d like to invest in his venture. Since investment opportunities are limited, we’d both take him up on the offer. As it stands, we could each invest an equal amount, and own an equal share in the bar. But because some time has passed since our arrival, I’ve grown older and am no longer into equality, so I decide I want to own a larger share than you. I can print another $100 and keep it. Now, I have 66% of the island’s wealth, and you only control 33%. I’ve effectively taken a loan from you without asking!
Once the dividends from the bar pay out, I can remove the extra $100 from circulation to prevent too much inflation, and thereby “repay” the “loan,” but I’d still have a larger share of the tiki bar!!
Marshmallow,
Looking at you example and applying it to an actual economy this looks as if during the printing stage we would experience what Bernake is doing to us now which is monetary devaluation. and when the monetary supply is dried up we would see it increase in value. This is the game the Fed has been playing with the money supply for years now, is it not?
it is. and because so many countries hold dollars in reserve, we have some insulation in that when the dollar goes down, other currencies go down with it. It’s all relative
only trouble is the weaker the dollar gets the more it will push countries to start switching to the euro as their reserve currency. once that happens, that insulation, and our seignioriage privileges, will be diminished or gone. It wouldn’t be the end of the world, but those are some nice perks of controlling the world’s reserve currency.
Jacob – It is the dog! Badly needed laugh on that one!
Puffalump,
First, you missed what Ed was saying, so I will repeat it:
“[In] the worse (sic) case Mexicans hold on to the dollars (like China) and essentially gives us a loan at 0% interest.”
How is it the entity holding the money is giving us a loan? It’s completely backward.
Now, what has that got to do with Seigniorage? China and Mexico are not issuing dollars.
You are also showing your ignorance again. Smith does, in fact, discuss seigniorage in The Wealth of Nations, specifically in Book IV, Chapter VI, and mentions it elsewhere. I again encourage anyone who has any interest in economics or politics to read and digest The Wealth of Nations.
Your example is further flawed in that you assume that the wealth of a nation consists of its money. Money is only a medium of exchange. If there is nothing to exchange, money is meaningless. However, the lack of money does not mean lack of wealth. If you had all the money (or even gold) on the island, but I had all the arable land and livestock, I submit that I would be far wealthier than you.
Money is nothing more than a myth agreed upon. When the people stop believing the myth, then we get hyperinflation.
Jack, you’re ability to shift from referencing chapter and verse of the Bible to book and chapter of Smith is intriguing, I’ll admit. but you don’t need to try to poke holes in my example. I was just trying to illustrate a concept that plays a role in international economics and monetary policy. I’ll accept that it’s an over simplified example, but economic models always are. That example deals specifically with monetary issues, ceteris paribus …
It doesn’t seem like you understand. That’s fine, but I don’t really appreciate your calling me ignorant on account of your own misunderstanding. You don’t need to be defensive. Please understand that this isn’t coming from some neo-Marxist critique of global capitalism. It’s a well understood component of economic theory when it comes to reserve currency/monetary policy/global economics/etc. I’d explain it again but i think I did a pretty good job the first time, so maybe you should re read that post or do some more research on the idea yourself.
ok, I can’t help it: in essence, whoever controls the supply of dollars (the US) controls the value of the dollar. (instead of “controls the value” maybe I should say, “controls a powerful lever for influencing the value…”) When the US prints more dollars, the value of each individual dollar is diminished. ok? Similarly, maybe you’ve heard of Debeers having some stockpiles of diamonds that they wont release onto the market because they don’t want to devalue diamonds; by controlling the supply, they control the price.
when we print more money and keep it in the bank, we are effectively extracting value from other countries that hold dollars in reserve, and giving it to ourselves. We aren’t literally taking money from Mexico or China (or any other country that holds dollars in reserve), but we are temporarily undermining the value of their holdings in order to temporarily increase the value of our own. This is, in essence, an interest free loan. Is that any clearer?
I was calling you ignorant for claiming that Smith did not discuss seigniorage in the Wealth of Nations. A simple Google search would have disabused you of that notion, but you were too lazy.
No, I simple do not understand how another country’s holding our currency translates into an interest-free loan to us. But the next time you want to buy a house or a car, I will be happy to give you such an interest-free loan. Just send me the money.
how rude!
It would only work if you’re keeping puft bucks in your bank account. If you were, I could simply print more money until I had enough to buy a house, but the value the money in your bank account would decrease as a consequence.
think of everyone’s $ holdings as slices of a pie, and then think about how the US can control the size of it’s own slice. If it decides to increase the size of it’s own slice (by printing more $), every other slice would have to get smaller.
this “interest free loan” from seigniorage privilege doesn’t mean a literal transfer of cash, it’s just a way that the supplier of $ can increase it’s own slice of the pie at the expense of everyone else who is holding that currency.
You are confusing seigniorage with control of the money supply. Seigniorage is the difference between the cost of making the money (printing or minting) and its nominal value. If it costs 90 cents to print a bill, then a dollar bill get the government 10 cents in seigniorage, while a $100 bill gets $99.10.
The control of the money supply is the ability to print so much money that fixed-rate bonds held by other countries actually lose value because the inflation rate becomes higher than the yield on the bond. This is known as an “inflation tax.” Here is a good paper explaining the difference.
There is no indication that the United States is pursuing such a policy, so your entire argument is invalid.
Holy Cow, Jack, come on! Why are you insisting on disproving me? I’m not making it up, I’m not even making an argument (although apparently you want to argue). This is part of the equation when determining economic policy. I’m just trying to help you understand it. Ask Ben Bernanke, he’ll tell you the same thing.
You’re saying that if it costs .1 to print, then seigniorage from printing a $ is .9 but that .9 depends on how many $ exist. If there were only 1 $ in the world, it would be worth a zillion pounds sterling, or something, or a tillion pork bellies, or whatever. If there were $2 in the world, each one would be worth 1/2 a trillion pork bellies, etc. It isn’t about how many pennies are in a $, it’s about purchasing power.
the abstract of the paper you referenced says, “In this paper I analyse four different but related concepts, each of which highlights some aspect of the way in which the state acquires command over real resources through its ability to issue fiat money. They are (1) seigniorage (the change in the monetary base)…”
exactly! Thank you paper that jack references for helping me try to explain this concept to him, but I don’t think it worked! lol
next, try the wikipedia entry: http://en.wikipedia.org/wiki/Seigniorage
You didn’t bother to read the paper, did you?
Wikipedia notwithstanding, seigniorage and the inflation tax, “the reduction in the real value of the stock of base money due to inflation,” are not the same thing. Seignorage is not time dependent. It is the one-time difference between the cost to print the notes or mint the coins, and the face value of those notes and coins. (Negative seignorage occurs when the notes and coins are retired.)
The inflation tax, however, is time dependent — the longer a security is held, the more it is affected by inflation. Bidders factor expected inflation into their calculations when they purchase government bonds. If a nation pursues a policy of printing its way out of debt, bidders lower their bids for that nation’s bonds accordingly.
Again, there is no evidence that the United States is pursuing such a policy, so it cannot be argued that nations holding dollar-denominated securities are giving us an interest free loan. The loans carry the real interest which is the difference between the nominal yield of the bonds and our inflation rate.
oh Jack, give it up. I said, I’m not making an argument. I’m just explaining an idea. Thought maybe you could benefit from a better understanding of monetary policy, but I forgot that you already know everything.
I think the deal might be that you are referring to the strict classical definition of the term, and I’m talking about a more contemporary use of it, as in the privilege of…
I didn’t have access to the article you referenced, could only see the abstract. Look, if you want to insist you’re right, I don’t really care. But if you’re really researching the issue, and NOT to find anything about the link between seigniorage and interest free loans, you’d have to be trying pretty hard. I don’t want to psychoanalyze, but it certainly is an intriguing phenomenon…
anyway, since I am indefatigable in my efforts to spread knowledge throughout the land, let me offer you this bit from a paper prepared for the European Parliament Committee on Economic and Monetary Affairs by a professor at the London School of Business:
“Moreover, the creator of international money is the only true international lender of last resort, and that confers power in the international economy. Think of the key role of the US Treasury alongside the IMF in the Mexican
crisis, the Asian crisis, and Brazil. Where was Europe, except to help pay the bills (see Coeuré and Pisani-Ferry, 2000)? On the strictly economic side, the issuer of the international currency benefits from seigniorage. Conventional estimates indicate that 50 to 60% of the total
US outstanding dollar notes are held abroad. The underground economy – the Russian mafia, longer-established organized crime, drug dealers – accounts for a lot of these currency holdings. Foreign holders of cash dollars give the US Treasury an interest-free loan. The flow of this international seigniorage to the United States is around 0.1% of GDP per year.”
http://www.europarl.europa.eu/comparl/econ/pdf/emu/speeches/20001123/portes/default_en.pdf
I think I understand what you are getting at, puffalump. Let me try to explain it back to you, and see if I am correct:
1) U.S. prints a $20 bill, making, let us say, $19.90 in seignorage. (I don’t know what that number really is.)
2) Jose sends said bill to his Tia Maria in El Salvadore.
3) Bill circulates in El Salvadore until nearly destroyed — about a year. (Bills do not have long lives.)
4) Bill is exchanged at Banco del Salvadore and returned to the United States, where it is exchanged for a new one.
5) Old bill is destroyed, at a cost of another 10 cents, thus destroying $20.
So, for 10 cents (the cost of producing the replacement $20 bill), the government got use of the $20 for a year. That loan is “interest free,” because it matters not whether that bill is exchanged one, two, or twelve years after it was issued.
BTW, here is another good paper on the subject. It does go into the conflated (and thus confusing) definition. I prefer the classical definition, as distinct from the “inflation tax.”
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