Big Red Car here in the ATX on a lovely day. Got a call from Donald Trump, who said, “Big Red Car, you’re handy with numbers, right?” Before he said anything else, I knew he was talking about the WALL.
“Yes, Donald, I am,” says I.
“How would YOU finance the WALL, Big Red Car?”
To which I reply, “Well, Donald, I’d put a little tariff on imports and exports. That’s what I’d do.”
“Will that work, Big Red Car?” asks That Donald.
“Of course, it’ll work, Donald.”
“Thanks, Big Red Car.”
“Best to Melania, Donnie. See you when the WALL is finished.”
[Melania loves the Big Red Car. Huuuuuuuuuuuuuuge!]
US – Mexico Trade
The US imports $280,000,000,000 from our brethren to the south.
The US exports $226,000,000,000 to Mexico.
Thus, the US has a trade deficit of $54,000,000,000. Deficit means we buy more of their stuff than they buy of our stuff. You have heard that number before, no doubt.
Total trade between the United States and Mexico is $506,000,000,000. [Add the imports and exports, Calvin. Sheesh!]
OK, Big Red Car, how much is the WALL going to cost?
The WALL is estimated to cost somewhere in the neighborhood of $5,000,000,000 — “pricey neighborhood,” sayeth the Big Red Car.
Still, in the size of the US – Mexico trade relationship it is not that big, no?
No, Big Red Car, it isn’t that big.
How long to build the WALL, Big Red Car?
The WALL will take less than five years to build.
The aggregate distance of the US – Mexico border is approximately 2,000 miles, so to get the job done in 5 years, we need to build about 400 miles per year. No hill for a climber.
Nice pic of another WALL project somewhere in China, no? Looks familiar.
How you gonna pay for it, Big Red Car?
We are going to put a tariff of 0.25% on all goods flowing either to or from the sovereign nation of Mexico.
Not very much is it, dear reader?
Each year, that is going to generate $1,265,000,000 in gross revenue. Over 5 years, that will total $6,325,000,000.
[The remaining balance will be used to renovate all 1966 convertibles starting with a new paint job for the Big Red Car, y’all. Hey, I’m looking for my little bit of mordida, no? I’m a freakin’ capitalist.]
Voila, the WALL is built. The WALL is paid for (by Mexico essentially) and the country is secure.
Who is going to miss 0.25% of anything?
Answer: NOBODY.
Big Red Car, it’s easy, isn’t it?
Yes, dear reader, the building of the 2,000 mile WALL is easy. Easy to build at 400 miles per year. Easy to finance. Easy, easy, easy, easy — the border is secure.
But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Be kind to yourself. You deserve it. I’m headed to the border to sell lemonade to the WALL workers. See ya.
Americans import. Americans tax imports from Mexicans. Mexicans increase the price by the %. Americans pay the new price. Who paid for the hugeeeeeeeeeeeeee wall ?
You never made it out of your math courses, did you? Or your intro to econ either? Even if your assumptions are correct (and they aren’t), the benefits outlined above overwhelm the costs.
Read Donald Trump’s books. If any biz is faced with incremental costs, they pass that to the consumer.
The expectation is that the price of some goods and services would go up since we wouldn’t have any illegal aliens to provide cheap labor. What if we simply enforced legal hiring practices and penalized the companies that hire illegal workers to avoid their tax obligations, pocketing the difference? If you can’t get a job here, wouldn’t that cut down on illegal immigration dramatically? Without spending $5B? I realize, of course, that a lot of the money that otherwise would be remitted as withholding taxes goes into writing checks that end up in the hands of government officials cheerfully serving their constituency. But I can’t help but notice that really long border on the other side of the country and nobody’s suggesting that we build a wall up there. If the wall is built, I’ve got a great business idea that’s sure to make a fortune. CanaMex Airlines. One way flights daily. I just need something from Canada to fly back to Mexico.
.
What will happen is that more Americans will be employed and wages will increase. The Labor Force Participation Rate will increase.
When more people are working at higher wages, more Americans will be paying more taxes and the deficit will decrease thereby putting our national house in order.
Currently, the law — UNENFORCED BY THIS ADMINISTRATION — contains sufficient penalties for employers who hire illegal workers.
I can get a Visa card receipt in less than 2 seconds at McDonald’s but we cannot eVerify a “suspect” worker for 6-18 months. I say give them all Visa cards and let McDonald’s run the show.
This is a very easy problem to solve if there is a national will to enforce EXISTING law. Today, at the border, the Border Patrol — in accordance with the direction of this administration — is not stopping illegal border crossings. Rather, they give them court dates six months in advance for which they never show up.
This is not a complex problem.
BRC
https://www.themusingsofthebigredcar.com
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Big Red Car carsplains how to finance and build the wall with a pittance of a tariff. Donald Trump says, “That could work, Big Red Car. Thanks. Love the Big Red Car!”
https://themusingsofthebigredcar.com/financing-donald-trumps-wall/
BRC
https://www.themusingsofthebigredcar.com