A Home Investment Visa Program?

There are already investment visas for people who want to buy factories or ethanol plants, so the legal structure for a Home Investment Visa program is largely written. While the flurry of activity a Home Investment Visa program would cause would require some extra workers at the Internal Revenue Service (to collect the extra income in taxes), Homeland Security (to process the visa paperwork), and elsewhere in the government’s bureaucracy, even this spending would be directly tied to jobs and help stimulate the economy.

Note that the multiplier on the “buy a house, get a visa” strategy would be much larger than any possible domestic multiplier since the money would come from outside the economy (and efficiency would improve as well.)

I think there would be considerable support among economists that immigration (buy a house, get a visa), a payroll tax cut and maintaining state and local funding would be reasonably good policies in this recession (albeit not necessarily sufficient) yet these policies seem to be the ones that the political system rejects out of hand.  (See also Matt Yglesias here and here).  Now, I can understand rejecting these policies as compared to doing nothing, ala a precautionary principle, but why these policies are rejected compared to taking a trillion dollar gamble is puzzling even to someone like myself schooled in public choice. 

via Marginal Revolution: Buy a House, Get a Visa.

Alternatively, we could nationalize Citi, Bank of America, Wells Fargo, and JP Morgan, or give tens of billions in subsidies to the shareholders in these companies until they’ve recuperated their losses from the federal balance sheet.

It is the call of two men and one woman: Barack Obama, Harry Reid, and Nancy Pelosi.

What will be their decision? What would be yours?

14 thoughts on “A Home Investment Visa Program?”

  1. But those are American homes those “furnerners” will be buying, and they’ll be taking American jobs!

    The populist whiplash Lou Dobbs, Keith Olbermann, Harry Reid and other blowhards are creating is rapidly becoming a lasting tornado that whips through anything resembling common sense.

  2. This is a “buy American” provision I could support.

    Tom Friedman agrees [1] and refers to this as an ‘Open Door Bailout’ :

    ““All you need to do is grant visas to two million Indians, Chinese and Koreans,” said Shekhar Gupta, editor of The Indian Express newspaper. “We will buy up all the subprime homes. We will work 18 hours a day to pay for them. We will immediately improve your savings rate — no Indian bank today has more than 2 percent nonperforming loans because not paying your mortgage is considered shameful here. And we will start new companies to create our own jobs and jobs for more Americans.”

    As Eddie mentions, there is a major problem with (uninformed) public opinion on the issue.

    The trick would be to do it quietly. I’m not well versed in immigration law but I would bet there are quiet adjustments that could be made that would allow such a program to take shape. Who will lobby for this program? It seems to me it would be good for banks and the real estate industry as a whole.

    It seems like we’ll be selling those mortgages to India and China one way or the other. If the government does a bailout the money will be raised by borrowing from the new core anyway.

    [1] http://www.nytimes.com/2009/02/11/opinion/11friedman.html?_r=1

  3. It is an interesting idea.

    I am sure okay with encourage the immigration of hard-working (and non-Muslim) folks.

    I bet a bunch of Scandinavians would take us up on it too.

  4. i’m not sure swedes or finns are as dumb as this. they have a pretty good life afterall.

    the question i suppose is, whats the market for visas? if its substantially more than the negative equity per household, i suppose it would be a good idea. but i don’t believe that is the case, and if you make it available merely for a deed of trust, the value of the visa will plummet as a result.

    i suppose there would be some equilibrium point. but i really don’t think the visa is as valuable a thing as you might think it is.

    of course, the only people buying anything in florida right now are rich europeans looking for deals… but what do they need with visas anyway?

    in fact, i think the value of the visa is probably highest for people trying to escape already destitute circumstances. and we know what would happen politically if a huge influx of these people came in and started gobbling up “our old homestead.”

    so not very viable, but definitely interesting. perhaps a similar result could be achieved by increasing (greatly) the H1B program and bringing over educated immigrants who will build things here and pay taxes here.

    the point being, opening the borders up now would be a healthy thing for the economy. of course, we’ll do the opposite.

  5. Federalist X,

    i suppose there would be some equilibrium point. but i really don’t think the visa is as valuable a thing as you might think it is.

    I think to know this, we would need to know the number of individuals who have access to the cost of the host, as well as the real cost of the house less the amortized present value of the house’s resale.

    So, for instance, many individuals with relatives overseas who nonetheless are not covered in a timely way under family reunification (those with uncles, aunts, nephews, etc.) may well by a house for their relative. Likewise, businessmen or officials seeking to an “escape hatch” in case things go wrong would be interested. Of course, individuals who are betting that they can make more income as a proefssional working in Houston than Hangzhou, and have access to capital, would be customers as well.

    As the actual cost of the program would be the purchase minus the selling price, the actual cost to society would be the sudden change in demographic balance in many communities.

    in fact, i think the value of the visa is probably highest for people trying to escape already destitute circumstances. and we know what would happen politically if a huge influx of these people came in and started gobbling up “our old homestead.”

    Purplelog raises an interesting question of who would be excluded. How the law could be written to achieve the objective of safety is an interesting question!

  6. Perhaps you agree, I am skeptical of our ability to do this anything close to sensibly.

    For instance, there have been on Persian honor-killings in the US, Iranians tend to be as secular in their daily life as Spaniards, and there is already a large Iranian diaspora in the west that is deeply hostile to the Islamic Republic. [1]

    How do we separate our enemies from potential friends, while maintaining sensible immigration policies?

    [1] http://www.tdaxp.com/archive/2007/07/04/the-consequences-of-brain-drains-in-developing-countries.html

  7. Your question is a good one, and I have no good answer to it. So, I would keep them all out unless they are being allowed to in as a reward…say for beuing a US security resource.

  8. As a thought experiment, we might realize that the Chinese Communist Party is more likely to offer us low-interest, long-term loans than spark rioting in the streets, and update USC Sec. 8 Ch. 12 Subchapter III Part I SS 1424 [1]…

    Prohibition upon the naturalization of persons opposed to government or law, or who favor Islamist forms of government
    (a) Notwithstanding the provisions of section 405(b) of this Act, no person shall hereafter be naturalized as a citizen of the United States—
    (1) who advocates or teaches, or who is a member of or affiliated with any organization that advocates or teaches, opposition to all secular government; or
    (2) who is a member of or affiliated with
    (A) any Islamist party of the United States;
    (B) any other Islamist party of the United States;
    (C) any Islamist political or religious association;
    (D) the Islamist party of any State of the United States, of any foreign state, or of any political or geographical subdivision of any foreign state;
    (E) any section, subsidiary, branch, affiliate, or subdivision of any such religious association or party; or
    (F) the direct predecessors or successors of any such religious association or party, regardless of what name such group or organization may have used, may now bear, or may hereafter adopt, unless such alien establishes that he did not have knowledge or reason to believe at the time he became a member of or affiliated with such an organization (and did not thereafter and prior to the date upon which such organization was so registered or so required to be registered have such knowledge or reason to believe) that such organization was a Islamist-front organization; or
    (3) who, although not within any of the other provisions of this section, advocates the economic, international, and governmental doctrines of sharia or the establishment in the United States of a Islamist dictatorship, or who is a member of or affiliated with any organization that advocates the economic, international, and governmental doctrines of sharia or the establishment in the United States of a Islamist dictatorship, either through its own utterances or through any written or printed publications issued or published by or with the permission or consent of or under authority of such organization or paid for by the funds of such organization; or

    etc. etc. etc.

    [1] http://www.law.cornell.edu/uscode/uscode08/usc_sec_08_00001424—-000-.html

Leave a Reply

Your email address will not be published. Required fields are marked *