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.Â (See also Matt Yglesias here and here).Â 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.Â
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?