***Econ DAs – DDI***

Notes
There are 3 disads—1. Immigration increases domestic labor supply, driving down wages; 2. Immigration
increases aggregate demand and has other stimulative effects which increases inflation, prompting the
Fed to raise interest rates aggressively; 3. Immigrants are a significant fiscal drain on state governments
forcing budget tradeoffs

DO NOT read #2 alongside either of the other two—You’ll double-turn yourself

The State Budgets DA is a net benefit to at least some temporary status CPs

Some misc author indicts are at the bottom, but not much. A note on that front for your edification: the
Center for Immigration Studies (CIS) is a think tank offshoot of FAIR. It’s not *totally* illegitimate, and
you can find defenses of it (and on the Aff, should find indicts)—but it’s close. The neg cards herein are
by and large not from them.
Wages DA
Neg
 Wages DA 1NC
Tight labor market is driving wage growth—that’s key to spending that’s the
foundation of all current growth
Zandi et al 3/18 Mark Zandi, Brian Poi, Scott Hoyt, and Wayne Best, March 2018, Visa, “Consumer
wealth has major implications for U.S. economy”, https://usa.visa.com/partner-with-us/visa-
performance-solutions/consumer-wealth-has-major-implications-for-us-economy.html

U.S. consumers have been the strongest and most consistent source of growth in the current economic
expansion. During the past eight years of the expansion, consumers have accounted for nearly three-
fourths of the economy’s growth (see Chart 1). The strongest gains in spending have occurred in the
past several years, as in the aftermath of the Great Recession many households struggled with
foreclosures and deleveraging.

Critical to consumers has been the improving job market. Job growth has been consistently robust
during the expansion, averaging well over 2 million jobs per year. This is about double the pace of job
growth needed to absorb the slowing growth in the labor force, and thus unemployment and
underemployment have steadily declined. At currently just over 4%, unemployment is consistent with a
full-employment economy. Indicative of the tightening labor market are the record number of open job
positions, across nearly every industry, and the rising quit rate, as workers jump to better jobs. Millennial
workers have been particularly aggressive in moving to higher- paying and more suitable jobs.

The tight labor market is prompting businesses to give their workers bigger pay increases. Wages as
measured by the employment cost index—the most accurate measure of wages—have accelerated from
close to 1.5% per year a few years ago when unemployment was still high to near 2.5% today. Even
bigger pay increases are forthcoming, although given lower underlying productivity growth and inflation,
future nominal wage growth is likely to be slower than in times past.

Reducing restrictions on immigration wrecks that—huge economic shock, kills growth

for decades—it’s not about GDP but income per capita
CBO 14
Congressional Budget Office, US Senate Committee on the Budget, The Economic Effects Of Mass
Immigration On U.S. Workers, 2014, https://www.budget.senate.gov/newsroom/budget-
background/the-economic-effects-of-mass-immigration-on-us-workers

The great public policy question of whether the United States should continue admitting about 1 million
immigrants a year under current law, or triple that number as proposed in the recently passed Senate
bill, has now come to the House. This question is momentous not only because our immigration system
needs reforming, but primarily because proposals to do so include massive increases in migrant flows in
addition to the legalization of millions currently residing in the U.S. illegally. Given the poor state of the
economy and the abysmal condition of the federal budget, immigration reform has become the
cutting edge in a vigorous debate over our country’s economic future and reform of federal programs
that drive unsustainable annual deficits. Significantly increasing the inflow of immigrants would
adversely shock an already weak economy, lower average wages, increase unemployment, and
decrease each American’s share of national output. As the Congressional Budget Office observed in its
evaluation of the Senate’s effort to increase immigration, the economy might be bigger because it
would contain more people, but it would not be stronger. GDP per person would actually decline.
Considering the acute, current weakness of labor markets and the slowest economic recovery since
the end of World War II, the last thing the U.S. economy needs is an enormous, harmful economic
shock. We focus on key indicators of distress in labor markets. The millions of Americans who are
unemployed, underemployed, or who have dropped out of the labor force entirely will be the first to
feel the adverse effects of job competition from additional immigrants. We then touch on the desperate
condition of working family incomes. And the chart book concludes by reviewing CBO’s analysis of the
Senate comprehensive reform bill. Still Have Not Seen Jobs Recovery To 2007 Levels Six Years After Start
Of Recession “Our economy still has three people looking for every job [opening].” Gene Sperling
President Obama’s long-time economic advisor, on CNN, Jan. 5, 2014 Labor market still not recovered: A
significant expansion of immigrants would occur at a time of substantial weakness in U.S. labor
markets. The current economic recovery has been too slow to produce a healthy growth in
employment. The chart below shows that after 72 months, we still have fewer jobs than we had in
December of 2007 when the recession began, even though the population has increased each year. 1
Indeed, the economy has produced 4.7 million jobs since the recovery began in 2009, but 6.8 million
people have dropped out of the labor force. This amazing statistic, that dropouts exceed newly
employed, is unprecedented in the post-World War II period. Employment Has Not Even Begun To
Recover Collapse in percentage of adults working: The percentage of the population that works also has
failed to recover from the recession. As of the end of 2013, 58.6 percent of the adult population was
employed. This is down from 62.7 percent at the start of the recession, and the percentage has been
stuck at about 58.6 since September of 2009. If the same percentage of the population worked today as
worked at the start of the recession, we would have 10.1 million more jobs. In 2007 there were 146
million Americans employed. Today there are 144.6 million. At the same time, the population of those
older than 16 years of age has grown by 13.5 million. Far from producing enough jobs to keep up with
population growth, the economy is providing few choices for adults other than joblessness or
temporary, part-time work. Key Working-Age Population Is Dropping Out Key labor age group dropping
out: These depression-era labor statistics come into even sharper relief when we look at the all-
important age group, 24 to 54. The economy depends on this age group for most of its labor.
Unfortunately, the labor force participation rate (those working or looking for work) of this age cohort
has been in freefall since the middle of the recession. Working Family Incomes Falling, Not Rising No
growth in working family income: Working America is highly stressed. Jobs just aren’t being created at
nearly the rate to keep up with population, and millions are simply dropping out. To make matters even
worse, the Census Bureau reported in August 2013 that the incomes of working families have been in
decline since 2007 (after adjusting for inflation). 2 What CBO Says About The Economic Effects Of Large
Increases In Immigration It is against this difficult economic background that immigration reformers
want to massively increase the number of work visas by increasing the flow of legal migrants and
legalizing those in the country illegally: basically an increase from 10 to 30 million new workers over a
10-year period available to compete for any job. Such an increase would: depress wages among low-
and high-skilled native-born workers and decrease the average wage across the entire economy, raise
the national unemployment rate, and slow the growth of per capita output. These are some of the
conclusions reached last June by the Congressional Budget Office in its review of S. 744, the Senate’s
comprehensive immigration bill. CBO used sophisticated economic modeling and a panel of leading
academics in estimating the economic effects of the Senate’s bill. Let’s examine each of these impacts
separately. Depresses wages: CBO concluded based on extensive academic evidence that low-and
highskilled native-born workers would compete at a wage disadvantage with similarly skilled
immigrants. CBO wrote: “Based on CBO’s reading of that research, a 1 percent increase in the labor
force attributable to immigration has tended to lower the relative wages for all workers with less than a
high school diploma by roughly 0.3 percent…and to lower the relative wages for workers with at least a
college degree by roughly 0.1 percent.”3 CBO’s analysis of S. 744 shows that average wages across the
entire economy would be lower for the first 12 years of the policy change. (See graphic above). CBO
draws heavily from the academic work of George Borjas and other leading labor economists. Dr. Borjas
has found a number of very interesting economic implications from increased immigration. For example:
Dr. Borjas recently noted that immigration from 1960 through 2012 (the last year for which he had
data) has cost native-born workers an average $402 billion in lost wages, while native-owned firms
gained $437 billion in income.4 In other words, he finds the increase for business is almost entirely paid
for by the decline in wages earned by nonimmigrant workers. The impact of increased immigration from
1980-2000 resulted in a 3% decrease in wage for average native workers, and an 8% decrease for high
school dropouts. A 10% increase in the size of a skill group (i.e. high school drop-outs) reduces wages of
that group by 3- 4%. “Immigration has its largest negative impact on the wage of native workers who
lack a high school diploma, a group that makes up a modest (and, in recent decades, shrinking) share of
the workforce. These workers are among the poorest Americans. The children of these workers make up
a disproportionate number of the children in poverty: 24.8 percent of all children of the native-born
working poor live in households headed by a high school dropout.”6 Dr. Borjas is not alone by any
means in drawing these conclusions from the available data. For example, economists at the Federal
Reserve Bank of Atlanta wrote in 2008: As a result of the growth of undocumented workers, the annual
earnings of the average documented worker in Georgia in 2007 were 2.9 percent ($960) lower than they
were in 2000… [A]nnual earnings for the average documented worker in the leisure and hospitality
sector in 2007 were 9.1 percent ($1,520) lower than they were in 2000.7 Some may not think that losing
$960 in earnings is very much, but it is a real blow to a lowincome household. That’s a monthly loss of
$80 dollars, or a week of groceries for a family of four. CBO also drew on the work of the prominent
labor economist David Card, who found that increases in low-skilled immigration reduced wages in
similarly skilled native-born populations: “the research implies that immigrant inflows over the 1980s
reduced wages and employment rates of low-skilled natives in traditional gateway cities like Miami and
Los Angeles by 1-3 percentage points.”8 Given this academic research, it is little wonder that CBO
underscored this wage effect. Higher Unemployment: However, it is not only lower wages that working
Americans will have to bear, but higher unemployment as well. The rapid increase in the immigrant
population, especially in the low-skilled segment of the income distribution, will overwhelm the ability
of the economy to produce jobs. Thus, CBO estimates that S. 744 would raise the number of
unemployed Americans during the first five years by an annual average of 162,000 and that
unemployment would “remain elevated through 2020.” This is a stunning conclusion, especially when
compared with what CBO argued in its 2013 Outlook. In their Budget and Economic Outlook of February
2013, CBO projected only 75,000 additional jobs per month during the last five years of the current 10-
year budget window, 2019 through 2023. In other words, the increase in unemployed Americans that
CBO projects will equal a full month of average employment gain for the first five years after enactment.
At today’s job growth rate, that additional unemployment is like losing about a month of job gains: we
are currently averaging around 170,000 new jobs per month. Lower Economic Output: As you might
expect, the lower wages and higher unemployment reflect an economy that’s not growing fast enough
to absorb all of the new workers and keep up with income growth. While the size of the economy
expands because of the larger population, the growth rate is not fast enough to raise wages or lower
unemployment. CBO estimates that GNP per capita will fall below baseline (that is, what would
happen absent passage of the immigration bill) and stay below baseline until 2030. This decline in GNP
per capita is due to the failure of the economy to grow fast enough to keep up with immigration-driven
population growth and the fact that the vast majority of the projected new workers will be low-skilled.

Outweighs everything—key to whole economy, and wages are the key determinant
Amadeo 18
Kimberly Amadeo, Kimberly is president of WorldMoneyWatch.com. She has 20 years senior-level
experience in economic analysis and business strategy working for major international corporations,
MS-Sloan School of Business, Consumer Spending and Its Impact on the Economy, 3/21/2018,
https://www.thebalance.com/consumer-spending-definition-and-determinants-3305917

Consumer spending is what households buy to fulfill everyday needs. This private consumption
includes both goods and services. Every one of us is a consumer. The things we buy every day create
the demand that keeps companies profitable and hiring new workers. Nearly two-thirds of consumer
spending is on services, like real estate and healthcare. Other services include financial services (such as
banking, investments, and insurance). Cable and internet services also count, and even services from
non-profits. The remaining one-third of our personal consumption expenditure is on goods. These
include so-called durable goods, such as washing machines, automobiles, and furniture. More
frequently, we buy non-durable goods, such gasoline, groceries, and clothing. Five Determinants of
Consumer Spending There are five determinants of consumer spending. These are the things that affect
how much you spend. Changes in any of these components will affect consumer spending. The most
important determinant is disposable income. That's the average income minus taxes. Without it, no
one would have the funds to buy the things they need. That makes disposable income one of the most
important determinants of demand. As income increases so does demand. If manufacturers ramp up
to meet demand, they create jobs. Workers' wages rise, creating more spending. It's a virtuous cycle
leading to ongoing economic expansion. If demand increases but manufacturers don't increase supply,
then they will raise prices. That creates inflation. The second component is income per capita. It tells
you how much each person has to spend. Income measurements might rise just because the population
increases. Income per person reveals whether each person's standard of living is also improving. Income
inequality is the third determinant of spending. Some people's income may rise at a faster pace than
others. The economy benefits when most of the gain goes toward low-income families. They must
spend a more significant share of each dollar on necessities until they reach a living wage. The
economy doesn't benefit as much when increases go toward high-income earners. They are more
likely to save or invest additions to income instead of spending. The fourth factor is the level of
household debt. That includes credit card debt, auto loans, and school loans. Current consumer debt
statistics show that household debt has reached new record levels. Surprisingly, high health care costs
are one of the biggest causes of overwhelming debt. The fifth determinant is consumer expectations. If
people are confident, they are more likely to spend now. The Consumer Confidence Index measures
how confident people are about the future. It includes their expectations of inflation. If consumers
expect inflation to be high, they will buy more now to avoid future price increases. That's why the
Federal Reserve targets a 2 percent inflation rate. Why It's Important Consumer spending is the single
most important driving force of the U.S. economy. Keynesian economic theory says that the
government should stimulate spending to end a recession. Supply-side economists recommend the
opposite. They believe the government should cut business taxes to create jobs. But companies won't
increase production if the demand is not there. If you doubt this, think about what would happen if
everyone stopped spending. Businesses would eventually go bankrupt and lay off workers. The
government would then have no one to tax. The economy would have to rely on exports, assuming
other countries kept up their consumer spending. Borrowing would keep the government and factories
open. These additional components of gross domestic product aren't as critical as consumer spending.
Even a small downturn in consumer spending can damage the economy. As it drops off, economic
growth slows. Prices will drop, which creates deflation. If slow consumer spending continues, the
economy can go into recession.

Deterrence will only hold if growth remains strong

Tønnesson 15
Stein Tønnesson, Research Professor, Peace Research Institute Oslo; Leader of East Asia Peace program,
Uppsala University, 2015, “Deterrence, interdependence and Sino–US peace,” International Area Studies
Review, Vol. 18, No. 3, p. 297-311

Several recent works on China and Sino–US relations have made substantial contributions to the current
understanding of how and under what circumstances a combination of nuclear deterrence and economic
interdependence may reduce the risk of war between major powers . At least four conclusions can be drawn
from the review above: first, those who say that interdependence may both inhibit and drive conflict are
right. Interdependence raises the cost of conflict for all sides but asymmetrical or unbalanced
dependencies and negative trade expectations may generate tensions leading to trade wars among inter-
dependent states that in turn increase the risk of military conflict (Copeland, 2015: 1, 14, 437; Roach,
2014). The risk may increase if one of the interdependent countries is governed by an inward-looking
socio-economic coalition (Solingen, 2015); second, the risk of war between China and the US should not
just be analysed bilaterally but include their allies and partners. Third party countries could drag China or
the US into confrontation; third, in this context it is of some comfort that the three main economic powers
in Northeast Asia (China, Japan and South Korea) are all deeply integrated economically through
production networks within a global system of trade and finance (Ravenhill, 2014; Yoshimatsu, 2014: 576);
and fourth, decisions for war and peace are taken by very few people, who act on the basis of their future
expectations. International relations theory must be supplemented by foreign policy analysis in order to
assess the value attributed by national decision-makers to economic development and their assessments
of risks and opportunities. If leaders on either side of the Atlantic begin to seriously fear or anticipate
their own nation’s decline then they may blame this on external dependence, appeal to anti-foreign
sentiments, contemplate the use of force to gain respect or credibility, adopt protectionist policies, and
ultimately refuse to be deterred by either nuclear arms or prospects of socioeconomic calamities. Such
a dangerous shift could happen abruptly, i.e. under the instigation of actions by a third party – or against
a third party. Yet as long as there is both nuclear deterrence and interdependence, the tensions in East
Asia are unlikely to escalate to war. As Chan (2013) says, all states in the region are aware that they cannot
count on support from either China or the US if they make provocative moves. The greatest risk is not
that a territorial dispute leads to war under present circumstances but that changes in the world
economy alter those circumstances in ways that render inter-state peace more precarious. If China and
the US fail to rebalance their financial and trading relations (Roach, 2014) then a trade war could result,
interrupting transnational production networks, provoking social distress, and exacerbating nationalist
emotions. This could have unforeseen consequences in the field of security, with nuclear deterrence
remaining the only factor to protect the world from Armageddon, and unreliably so. Deterrence could
lose its credibility: one of the two great powers might gamble that the other yield in a cyber-war or
conventional limited war, or third party countries might engage in conflict with each other, with a view to
obliging Washington or Beijing to intervene.
 2NC Wages UQ
Current trends of wage growth and consumer spending are driving strong economic
growth—tight labor market key
Mutikani 18 (Lucia, “U.S. consumer spending accelerates; job market strengthening”, May 31st, 2018,
Reuters, https://www.reuters.com/journalists/lucia-mutikani) MJG

WASHINGTON (Reuters) - U.S.

consumer spending posted its biggest gain in five months in April, a further sign
that economic growth was regaining momentum early in the second quarter, while inflation continued to rise steadily.
Other data on Thursday showed a bigger-than-expected drop in the number of Americans filing applications for unemployment benefits last week. Moderately
rising inflation and a tightening labor market bolstered expectations that the Federal Reserve will raise interest rates next month. “Consumer spending is
accelerating and inflation is holding firm in a tightening labor market, so the Fed is likely to stay on course with those gradual rate hikes this year despite the signs of
uncertainty elsewhere in the world from populism and trade protectionism,” said Chris Rupkey, chief economist at MUFG in New York. Consumer

spending, which accounts for more than two-thirds of U.S. economic activity, jumped 0.6 percent last
month, the Commerce Department said. That was the largest rise since November and followed a 0.5
percent increase in March. SPONSORED Economists polled by Reuters had forecast consumer spending advancing 0.4 percent. Spending was
boosted by higher prices for gasoline and other energy products. Nondurable goods purchases surged 0.9 percent. There were also increases in purchases of long-
lasting goods. Outlays on services rose 0.5 percent, lifted by demand for household utilities. Prices continued to gradually rise last month. The personal
consumption expenditures (PCE) price index excluding the volatile food and energy components increased 0.2 percent for the third straight month. That left the
year-on-year increase in the so-called core PCE price index at 1.8 percent. The core PCE index is the Fed’s preferred inflation measure. The U.S. central bank has a 2
percent inflation target. Economists expect the annual core PCE price index will breach the Fed’s target in the coming months. The Fed increased borrowing costs in
March and has forecast at least two more rate hikes for this year. U.S. financial market were little moved by the data. The dollar fell against the euro on signs of
easing political tensions in Italy. Prices for U.S. Treasuries rose. FILE PHOTO: Job seekers line up to apply during "Amazon Jobs Day," a job fair being held at 10
fulfillment centers across the United States aimed at filling more than 50,000 jobs, at the Amazon.com Fulfillment Center in Fall River, Massachusetts, U.S., August
2, 2017. REUTERS/Brian Snyder/File Photo Stocks on Wall Street were trading lower after the Trump administration decided to impose metal import tariffs on
Canada, Mexico and the European Union, sparking new concerns of a trade war with the United States’ main allies. LABOR MARKET TIGHTENING The
moderate inflation also helped support consumer spending last month. When adjusted for inflation,
consumer spending rose 0.4 percent in April after increasing 0.5 percent in the prior month. That
suggests an acceleration in consumer spending after it grew at a 1.0 percent annualized rate in the first
quarter, the slowest pace in nearly five years. The solid consumer spending added to data on trade and
industrial production that have left economists anticipating a pickup in economic growth in the second
quarter. Factory activity looks set to strengthen further, with the Institute for Supply Management-Chicago reporting its business barometer rose 5.1 points to
62.7 in May. But the housing market appears to have taken a further step back. Contracts to buy previously owned homes dropped 1.3 percent in April, the National
Association of Realtors said in another report on Thursday. Gross
domestic product estimates for the April-June period are
above a 3.0 percent rate. The economy grew at a 2.2 percent pace in the first quarter. Households
dipped into their savings to fund purchases last month, with income growth remaining sluggish, a concern for some economists.
Personal income rose 0.3 percent after a gain of 0.2 percent in March. Wages increased 0.4 percent.
Savings fell to $419.6 billion last month from $445.7 billion in March. “The real question is whether that level of consumption growth is sustainable and I just don’t
think that is likely unless income gains accelerate,” said Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania. But with the
labor market rapidly tightening, there is hope that wage growth will gain steam. In a separate report on Thursday, the
Labor Department said initial claims for state unemployment benefits dropped 13,000 to a seasonally adjusted 221,000 for the week ended May 26. Economists
polled by Reuters had forecast claims falling to 228,000 in the latest week. The labor market is viewed as being close to or at full employment. The jobless rate is
near a 17-1/2-year low of 3.9 percent, within striking distance of the Fed’s forecast of 3.8 percent by the end of this year. Labor market strength is likely to be
underscored by May’s employment report, which is scheduled for release on Friday. According to a Reuters survey of economists, nonfarm payrolls probably
increased by 188,000 jobs after rising by 164,000 jobs in April.

Wages are growing now – fastest pace in 8 years

Bartash, 18 (Jeffry is a reporter at Marketwatch Dow Jones who specifies in economics). Wages grow
at fastest pace in more than 8 years as U.S. adds 200,000 jobs in January, MarketWatch,
https://www.marketwatch.com/story/us-adds-200000-jobs-worker-pay-rises-at-fastest-pace-since-
2009-2018-02-02)

The numbers: The U.S. created 200,000 new jobs in the first month of 2018, showing that companies are
still hungry to hire more than eight years after an economic expansion began. Even better, worker pay
also rose at the fastest yearly pace since 2009. The increase in hiring exceeded Wall Street’s forecast.
Economists polled by MarketWatch had predicted a 190,000 increase in nonfarm jobs. Unemployment
remained at a 17-year low of 4.1%, the government said Friday. The big news is rising worker pay.
Average hourly wages jumped 9 cents, or 0.3%, to $26.74. That pushed the yearly increase to 2.9%
from 2.6%, marking the highest level since the end of the Great Recession in June 2009. What
happened: Hiring bounced back in January after a milder gain in December. Construction companies
added 36,000 jobs, restaurants took on 31,000 new workers and health-care firms increased payrolls by
21,000. Manufacturers even increased employment by 15,000 despite glaring shortages of skilled labor.
Employment in most other industries was little changed. Over the last three months, the U.S. gained an
average of 192,000 new jobs. That’s a touch faster than the 181,000 monthly average for 2017. The best
news, though, is what appears to be a long-anticipated increase in wages. Until very recently worker
pay had risen slowly, trailing well below the 3% to 4% gains typically seen at the peak of an economic
expansion.

Current wage growth is Goldilocks – even if they win the link turn a spike in either
direction destabilizes the economy
Cole 18 (Ralph, Director, Equity Strategy and Portfolio Management , “GOOD NEWS ON THE JOBS
FRONT”, July 6th, 2018, https://www.fergusonwellman.com/blog/2018/7/6/good-news-on-the-jobs-
front) MJG

Expectations and events often explain market movement. With earnings season underway next week,
every earnings report will be judged on whether those expectations were exceeded, met or missed.
Perhaps the most important aspect is if future growth outlook meets expectations. The same explanation can be
used for economic statistics. Today’s nonfarm payroll report beat expectations and was unequivocally good
news for the economy and the stock market. U.S. employment grew by 213,000 in June versus the expected
195,000, with prior months jobs revised higher by 37,000. It’s exciting to see broad-based job growth across industries
this late in the economic cycle without alarming rates of wage growth to accompany it. Average hourly
earnings grew by 2.7 percent year-over-year, which is consistent with non-inflationary wage growth. With
positive momentum on the jobs front, why then has unemployment increased to 4.0 percent from 3.8 percent? That is because
600,000 people joined the labor force last month! Higher wages and a continued strong labor market enticed people
back into the work force that had either stopped looking for a job or were not actively seeking a job. The
most recent period of increased participation rate reverses a trend that started in the late 90’s. There was
small reversal in the last economic cycle, but you can see on the chart below the dramatic increase over the past couple of years, albeit from
lower levels. This development increases the potential growth for the U.S. economy in coming years. Source:
Bureau of Labor Statistics Source: Bureau of Labor Statistics Taxes More Important than Tariffs While trade headlines caused the markets to
gyrate in recent months, up to this point they have had no measurable impact on economic activity. The Institute for Supply Management
Manufacturing Index rebounded to 60.2 in June; this is only the third time in the last 13 years the reading was over 60. As of today, our belief is
that the Tax Cuts and Jobs Act will have a far larger impact on economic activity than any tariffs announced. With earnings season around the
corner we will look to company earnings reports to determine the impact from tariffs imposed on $34 billion in Chinese goods that were
enacted this morning. Week in Review and Our Takeaways Economic data remained strong as we ended the second
quarter, leading stocks higher by 1.5 percent on the week Job growth remains in Goldilocks territory
with solid gains and reasonable wage growth U.S. economic potential growth increases with increased
labor participation Earnings season will provide insight to potential tariff fallout, according to
calculations by Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York.

Gains are small but steady—key to stable growth

Bloomburg 18 (Time, “U.S. Adds 148,000 Jobs in December and Wages Rise”, January 5th, 2018,
http://time.com/5089477/december-jobs-report-2017/) MJG

U.S. job gains slowed by more than forecast in December, wage

growth picked up slightly and the unemployment rate
held at the lowest level since 2000, adding to signs of a full-employment economy. Payrolls rose by 148,000,
compared with the 190,000 median estimate of economists surveyed by Bloomberg, held back by a drop in retail positions, a Labor Department
report showed Friday. The
jobless rate was at 4.1 percent for a third month, while average hourly earnings
increased by 2.5 percent from a year earlier, after a 2.4 percent gain in November that was revised downward. The
job gains, while less than forecast, bring the 2017 total to 2.06 million jobs — below 2016 but slightly more than analysts had been expecting at
the start of Donald Trump’s first year as president. With the economy at or near maximum employment, one of the Federal Reserve’s goals, the
figures likely keep the central bank on track for continued gradual interest-rate hikes in 2018. While
payroll increases have slowed
over the past few years as the labor market tightens, economists say job gains above 100,000 a month
are still enough to keep putting downward pressure on the jobless rate. The breakdown of December data across
industries showed solid gains of 30,000 in construction and 25,000 in manufacturing. Retailers cut 20,300 positions during the height of the
holiday-shopping season, bringing total gains among service providers to 91,000, down from 176,000 in November. Revisions to prior reports
subtracted a total of 9,000 jobs from payrolls in the previous two months, according to the report. November’s reading was revised upward to
252,000 from 228,000. Wages
Rise Average hourly earnings rose 0.3 percent from the prior month following a
downwardly revised 0.1 percent gain, the report showed. Among other details of the report, the participation rate was
unchanged at 62.7 percent in December. The rate, which is hovering near the lowest level since the 1970s, has nevertheless held steady in the
past year. Fed
Chair Janet Yellen has said that’s a positive sign, because the rate is under downward
pressure due to Baby Boomer workers who are retiring. Steady household demand and a pickup in capital investment,
backed by elevated consumer and business sentiment and improving global demand for U.S. goods, bode well for employment in 2018. Time
will tell whether the economic strength — along with the $1.5 trillion tax overhaul signed in December — translates into bigger wage gains,
which have proven elusive during the expansion. The Trump administration argues that tax cuts for corporations will help increase productivity
and boost pay for rank-and-file employees. That would in turn aid consumer spending, which accounts for about 70 percent of the economy.
Other Details The U-6 underemployment rate rose to 8.1 percent from 8 percent; measure includes part-time workers who’d prefer a full-time
position and people who want a job but aren’t actively looking People working part-time for economic reasons rose by 64,000 to 4.92 million
Private payrolls rose by 146,000 (median estimate was 193,000) after increasing 239,000; government payrolls advanced by 2,000 Average
workweek for all workers unchanged at 34.5 hours (matching median estimate) Number of people out of work for 27 weeks or longer, or the
so-called long-term unemployed, fell as a share of all jobless to 22.9 percent from 23.9 percent In annual revisions to data based on the
household survey, the unemployment rate for June 2017 was lowered to 4.3 percent from 4.4 percent; rates for other months during the year
were unrevised.
 --Consumer Spending UQ
Consumer spending high now
Washington Post 12/22 12/22/2017, “U.S. Consumer Spending Rises in Latest Sign of Strong
Economy”, The Washington Post, https://www.washingtonpost.com/business/economy/us-consumer-
spending-rises-in-latest-sign-of-strong-economy/2017/12/22/2dda9c6c-e719-11e7-a65d-
1ac0fd7f097e_story.html?utm_term=.bf79c3f82fe8

U.S. consumer spending accelerated in November and shipments of key capital goods orders increased
for the 10th straight month, data showed on Friday, the latest signs of strong momentum in the
economy as the year winds down.

But the bullish growth picture was dimmed somewhat as the figures also showed household savings
dropped last month to the lowest level in more than nine years. Low savings could hurt consumer
spending, though economists are optimistic wage growth will pick up in the new year.

Economists see a modest lift to consumer spending from a $1.5 trillion tax cut package approved by the
Republican-controlled U.S. Congress this week, in the largest overhaul of the nation's tax code in 30
years.

"Consumers are still out there spending, but their purchases are being supplemented by low energy
costs, credit and a reduction in savings rather than organic income growth," said Lindsey Piegza, chief
economist at Stifel Fixed Income in Chicago. "Without sustained improvement in wages, consumers will
struggle to maintain even today's moderate pace of consumption."

The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S.
economic activity, rose 0.6 percent last month after gaining 0.2 percent in October. Spending last month
was buoyed by an increase in demand for motor vehicles, recreational goods and utilities.
 2NC Link
Increasing immigration depresses wages—True at every level
Hall, senior policy analyst in empirical studies at The Heritage Foundation, 16 (Jamie Bryan, “Does
Current Immigration Economically Benefit Ordinary US Citizens?”, The Heritage Foundation, 11-30-16,
https://www.heritage.org/immigration/commentary/does-current-immigration-economically-benefit-
ordinary-us-citizens, accessed on 7-14-18, JM)

Does current immigration economically benefit ordinary non-immigrants? A recent major report
indicates that most immigration does not. In September, the National Academy of Sciences (NAS)
published a major report on “The Economic and Fiscal Consequences of Immigration.” The report shows
that, other than small number of scientifically educated immigrants, immigration produces little or no
overall economic gain for non-immigrants but may cause a substantial shift in income from workers to
business and capital owners. Also, immigrants overall produce a fiscal deficit due to the very large
inflow of legal and illegal immigrants with low education levels in recent decades. So how did the
researchers get to this conclusion? For starters, the report makes the perfectly obvious point that
immigration increases the gross domestic product as it increases the number of workers. However, the
pertinent question is not whether the GDP is larger but whether non-immigrant citizens are
economically and financially better off because of immigration. Specifically, has immigration
increased or decreased the post-tax per capita income of the non-immigrant population? The report
shows that immigration impacts the post-tax income of non-immigrants in three ways: through an
“immigration surplus,” technological change, and a fiscal impact on government finances. According to
the report, an immigration surplus potentially exists because, as immigrants enter the labor force,
wages decline and returns to capital (such as interest and profits) increase by a slightly larger amount.
As the report puts it, “the more wages decline, the larger the surplus.” At its maximum value, the
theory implies that the current stock of immigrant labor, at 16.5 percent of the total labor force, has
“lowered wages by 5.2 percent,” or roughly $500 billion, for non-immigrants, while raising the incomes
of owners of business and capital by as much as $554.2 billion. The difference between the reduced
wages and increased profits is “an immigration surplus of $54.2 billion, representing a 0.31 percent
overall increase in income that accrues to the native population.” Thus the model shows that the main
impact of immigration is to redistribute income. In other words, since businesses can pay workers less,
they make more of a profit. However, as the report notes, the supply of capital may increase and the
rate of return on capital will fall. This would mean the wage losses, capital income increases, and
immigration surplus gradually disappear, and, in the long run, the situation would return to the status
quoante. The theory also predicts that a disproportionate inflow of immigrant laborers at a particular
education or skill level will reduce the wage of workers in that group relative to others. For example,
adult immigrants are almost four times as likely as non-immigrants to lack a high school diploma. This
will result in persistently lower relative wages for less skilled workers, whether immigrant or not.

Influx of immigrants displaces native workers and depresses wages for 5-10 years –
other immigration studies don’t take this into account
SKIDELSKY 17 (Robert, Robert Skidelsky, Professor Emeritus of Political Economy at Warwick
University and a fellow of the British Academy in history and economics, is a member of the British
House of Lords., (Robert Rowthorn is Emeritus Professor of Economics at the University of Cambridge.),
“Inconvenient Truths About Migration”, November 22, 2017, Project Syndicate, https://www.project-
syndicate.org/commentary/immigration-inconvenient-truths-by-robert-skidelsky-2017-11) MJG
LONDON – Sociology, anthropology, and history have been making large inroads into the debate on immigration. It seems that Homo economicus, who lives for
bread alone, has given way to someone for whom a sense of belonging is at least as important as eating. US Supreme Court AMERICAN DEMOCRACY ON THE BRINK
Jun 29, 2018 JOSEPH E. STIGLITZ says the US Supreme Court no longer provides a check on legislative, executive, and corporate abuses of power. 170 Add to
Bookmarks Previous Next This makes one doubt that hostility to mass immigration is simply a protest against job losses, depressed wages, and growing inequality.
Economics has certainly played a part in the upsurge of identity politics, but the crisis of identity will not be expunged by economic reforms alone. Economic welfare
is not the same as social wellbeing. Let’s start, though, with the economics, using the United Kingdom – now heading out of the EU – as a case in point. Between
1991 and 2013 there was a net inflow of 4.9 million foreign-born migrants into Britain. Standard economic theory tells us that net inward migration, like free trade,
benefits the native population only after a lag. The argument here is that if you increase the quantity of labor, its price (wages) falls. This will increase profits. The
increase in profits leads to more investment, which will increase demand for labor, thereby reversing the initial fall in wages. Immigration thus enables a larger
population to enjoy the same standard of living as the smaller population did before – a clear improvement in total welfare.2 A
recent study by
Cambridge University economist Robert Rowthorn, however, has shown that this argument is full of
holes. The so-called temporary effects in terms of displaced native workers and lower wages may last
five or ten years, while the beneficial effects assume an absence of recession. And, even with no
recession, if there is a continuing inflow of migrants, rather than a one-off increase in the size of the
labor force, demand for labor may constantly lag behind growth in supply. The “claim that immigrants take
jobs from local workers and push down their wages,” Rowthorn argues, “may be exaggerated, but it is
not always false.”1 A second economic argument is that immigration will rejuvenate the labor force and stabilize public finances, because young, imported
workers will generate the taxes required to support a rising number of pensioners. The UK population is projected to surpass 70 million before the end of the next
decade, an increase of 3.6 million, or 5.5%, owing to net immigration and a surplus of births over deaths among the newcomers. SUBSCRIBE NOW Exclusive
explainers, thematic deep dives, interviews with world leaders, and our Year Ahead magazine. Choose an On Point experience that’s right for you. LEARN MORE
Rowthorn dismisses this argument. “Rejuvenation through immigration is an endless treadmill,” he says. “To maintain
a once-and-for-all reduction in the dependency ratio requires a never-ending stream of immigrants.
Once the inflow stops, the age structure will revert to its original trajectory.” A lower inflow and a higher retirement age
would be a much better solution to population aging. Thus, even with optimal outcomes, like the avoidance of recession,

the economic arguments for large-scale immigration are hardly conclusive.

Connects to the impact—Increasing the number of workers by 10% depresses wages

by 3%
Judis, editor-at-large at Talking Points Memo and a former senior editor at The New Republic
interviewing Harvard Economist George Borjas, 17 (John, “Is Massive Immigration an Unmitigated
Blessing? An Interview on Immigration With Harvard Economist George Borjas”, Talking Points Memo,
10-26-17, https://talkingpointsmemo.com/cafe/john-judis-interview-george-borjas, accessed on 7-13-
18, JM)

Judis: Who does benefit and who doesn’t benefit? Borjas: The way I’d phrase it is that the people who
benefit are the people who use immigrants, and the people who don’t are those who compete with
immigrants. People who tend to benefit are the employers who hire them. They make higher profits.
The people who compete with the new immigrants are both the older immigrants and natives who are
low-skilled. It’s a simple supply-demand argument. The question then becomes: How do we compare
the value of having run this huge anti-poverty program with the losses being suffered by the native
workers and the inequality being created by that type of immigration? Judis: What kind of losses are
suffered? Lower wages, unemployment, higher taxes? And how is inequality affected? Borjas: The
largest loss is probably the wage drop suffered by the workers who now face more competition in the
labor market. My rule of thumb is that if immigration increases the number of workers by 10 percent,
the wage of workers probably drops by about 3 percent. It is not a huge drop, but it is certainly not zero.
And we should all find it particularly worrisome when this wage drop is imposed on workers who can
least afford it. And this obviously tends to aggravate the forces that lead to greater inequality in our
economy. The other big loss that we need to think about in terms of low-skill immigration is the
increased cost of government services that we provide to them. According to the latest National
Academy report, this number could easily exceed over $50 billion a year.

Immigration kills wages

Borjas 16 (George J. Borjas is professor of economics and social policy at the Harvard Kennedy School,
chaired the National Science Foundation’s Committee of Visitors for the Economics Program – “Yes,
Immigration Hurts American Workers,” September 2016 –
https://www.politico.com/magazine/story/2016/09/trump-clinton-immigration-economy-
unemployment-jobs-214216)///JP
Here’s the problem with the current immigration debate: Neither side is revealing the whole picture. Trump might
cite my work, but he overlooks my findings that the influx of immigrants can potentially be a net good for the
nation, increasing the total wealth of the population. Clinton ignores the hard truth that not everyone benefits
when immigrants arrive. For many Americans, the influx of immigrants hurts their prospects significantly.
This second message might be hard for many Americans to process, but anyone who tells you that
immigration doesn’t have any negative effects doesn’t understand how it really works. When the supply
of workers goes up, the price that firms have to pay to hire workers goes down. Wage trends over the
past half-century suggest that a 10 percent increase in the number of workers with a particular set of
skills probably lowers the wage of that group by at least 3 percent. Even after the economy has fully
adjusted, those skill groups that received the most immigrants will still offer lower pay relative to those that
received fewer immigrants. Both low- and high-skilled natives are affected by the influx of immigrants. But because
a disproportionate percentage of immigrants have few skills, it is low-skilled American workers, including many
blacks and Hispanics, who have suffered most from this wage dip. The monetary loss is sizable. The typical
high school dropout earns about $25,000 annually. According to census data, immigrants admitted in
the past two decades lacking a high school diploma have increased the size of the low-skilled workforce
by roughly 25 percent. As a result, the earnings of this particularly vulnerable group dropped by
between $800 and $1,500 each year. We don’t need to rely on complex statistical calculations to see the harm
being done to some workers. Simply look at how employers have reacted. A decade ago, Crider Inc., a chicken
processing plant in Georgia, was raided by immigration agents, and 75 percent of its workforce vanished over a
single weekend. Shortly after, Crider placed an ad in the local newspaper announcing job openings at higher
wages. Similarly, the flood of recent news reports on abuse of the H-1B visa program shows that firms
will quickly dismiss their current tech workforce when they find cheaper immigrant workers.

Their ev is ideological and based on old stats—Growing body of research proves our
argument
Rowthorn, Emeritus Professor of Economics at the University of Cambridge and Fellow of King’s
College, 15 (Robert, “The Costs and Benefits of Large-scale Immigration”, Civitas, December 2015, p. 31,
http://www.civitas.org.uk/content/files/largescaleimmigration.pdf, accessed on 7-12-18, JM)

At one time most economists claimed that immigration had a negligible effect on the employment of
natives. This consensus has begun to fray in recent years as new evidence has emerged. An econometric
analysis by the official Migration Advisory Committee strongly suggests that immigration damages the
job prospects of lower skilled natives when the labour market is slack. There is evidence from other
sources that immigration may also have a transitory effect on native employment even in boom times.
In addition, there is evidence that competition from immigrants may result in lower wages for low
skilled local workers, including previous immigrants. The liberal media are quick to denounce as
xenophobia the claim that immigrants take jobs from local workers and push down their wages. This
claim may be exaggerated, but it is not always false.

Empirics
Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School, 13 (George,
“Immigration and the American Worker”, Center for Immigration Studies, 4-9-13,
https://cis.org/Report/Immigration-and-American-Worker, accessed on 7-11-18, JM)

I define the “immigrant share” for each of these skill groups as the fraction of the workforce in that
group that is foreign-born.4 The immigrant share obviously measures the size of the supply shock that
affects the labor market for a particular skill group at a particular time. Figure 1 illustrates the supply
shocks experienced by selected skill groups between 1960 and 2010. It is well known that immigration
into the United States greatly increased the supply of high school dropouts in recent decades. What is
less well known is that this supply shift did not affect all age groups within the population of high school
dropouts equally. Moreover, the nature of the imbalance changed over time. As Panel A of the figure
shows, immigrants made up almost 60 percent of all high school dropouts with around 20 years of
experience in 2010, but only 30 percent of those with less than five years. In 1960, however, the
immigration of high school dropouts most increased the supply of the oldest workers. Similarly, Panel B
shows that in 1990 the immigrant supply shift for workers with more than a college education was
reasonably balanced across all experience groups, generally increasing supply by around 10 percent. By
2010, however, the supply shift for these highly educated workers was far larger for those with less than
15 years of experience. It is easy to demonstrate the strong link that exists between trends in the wages
of native-born workers and the immigrant share within these schooling-experience groups. In particular,
Figure 2 presents the scatter diagram relating the change in (log) weekly earnings for each group to the
change in the immigrant share for that group, after removing decade effects from the data.5 The figure
clearly documents a negative relation between the growth in weekly earnings and immigration. Put
simply, the raw data at the national level show that weekly earnings in any particular decade grew most
for workers in the skill groups least affected by immigration in that decade. These data can be used to
estimate a multivariate regression model that relates changes in (log) weekly earnings for a particular
group to the change in the immigrant share for that skill group. It is worth emphasizing that this
statistical framework adjusts for changes in labor market conditions between 1960 and 2010 that might
affect wages differentially for the various skill groups. In rough terms, the regression framework
generates a trend line similar to the one illustrated in Figure 2, but one that also controls for the fact
that the returns to skills were changing over the past few decades due to many other reasons.6 The
slope of this trend line then gives the wage impact of immigration. Table 1 summarizes the evidence
from a number of alternative specifications of the regression model using the 1960-2010 census data.
The first two columns of the table report the regression coefficients (and standard errors) for the
immigrant share variable. To make the results easily understandable, the last two columns of the table
transform the coefficients into an implied wage impact. The first row of the table reports that if
immigrants increased the total number of workers in a skill group by 10 percent, the wage trends
observed over the past 50 years would suggest that the weekly earnings of working men would fall by
3.7 percent.7 It is also interesting to determine if these adverse wage effects are observed in specific
racial or ethnic groups.8 The remaining rows of Table 1 report the estimated wage effects when the
model is estimated separately in the samples of native-born black, Hispanic, and non-Hispanic white
workers.9 In all cases, it is evident that the wage of each native group falls whenever immigration
increases. In the case of blacks, for example, a 10 percent increase in the size of the skill group lowers
the wage of blacks in that group by around 2 percent. In the case of native-born Hispanics, the wage
would drop by 3 to 4 percent.

Immigration decreases wages- international studies confirm this trend both here and
abroad
Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School, 13 (George,
“Immigration and the American Worker”, Center for Immigration Studies, 4-9-13,
https://cis.org/Report/Immigration-and-American-Worker, accessed on 7-11-18, JM)

The simple methodology underlying the national-level approach has inspired a number of replications in
other countries. One particularly interesting context is given by the Canadian experience. Since 1967,
Canada has used a “point system” aimed explicitly at selecting high-skill immigrants. The point system
awards points to visa applicants who have particular socioeconomic characteristics (e.g., more schooling
and fluent English or French language skills), and then sets a passing grade that determines which
applicants qualify for a visa. The first row of Table 2 reports that a 10 percent immigration-induced
increase in the size of a skill group in Canada lowers the wage of that group by 3.5 percent. In contrast,
Mexico is a major source country for international migrants, with almost all of the emigrants moving to
the United States. Mishra (2007) merged data from the Mexican and U.S. censuses to calculate an out-
migration rate for each education-experience group and then estimated a regression model that related
the earnings of Mexicans who stayed in Mexico to the outmigration rate in their skill group. She found a
strong positive correlation between the earnings of Mexican stayers and the size of the outflow. A 10
percent reduction in the size of a skill group in Mexico raises the wage of the Mexicans who stayed
behind by 3.1 percent. Finally, several studies have replicated the analysis in the European context. In
Germany, for example, the immigrant share increased significantly in the 1990s. Some of the German
studies report a significant, though weaker, negative correlation between immigration and the wage
growth of specific skill groups in the German labor market, even though wages are thought to be
relatively rigid in Germany. A 10 percent increase in supply lowers the wage of native-born Germans by
1 to 2 percent. Similarly, the fraction of the workforce that is foreign-born in Norway increased from 2 to
10 percent in the past three decades. Using administrative data that cover all workers in Norway from
1993 through 2006, a recent study found that a 10 percent increase in the size of the skill group reduced
the wage of native-born Norwegians by 2.7 percent. In sum, the descriptive national-level data confirm
the common-sense expectation that an immigration-induced increase in the size of a particular skill
group is associated with a decline in the wage of that skill group, both in the United States and abroad. It
is important, however, to emphasize that although this adverse wage effect is costly for some (i.e., for
the affected workers), it can create benefits as well. The benefits will be discussed below.
 --AT: No Hurt Wages
Their empirics and studies are wrong—numerous methodological errors
Sharpe 15
James M. Sharpe, PhD-Business and Economics-UK, with Dr. Christopher R. Bollinger, Gatton Endowed
Professor of Economics and Director of the Center for Business and Economics Research-UK, THREE
ESSAYS ON THE ECONOMIC IMPACT OF IMMIGRATION, ProQuest Dissertations Publishing, 2015,
https://search-proquest-com.proxy.library.georgetown.edu/docview/1731862403?pq-
origsite=summon&accountid=11091

According to labor theory, the question of how immigration impacts native wages seems like a
straightforward one. Using a simple labor market model of supply and demand it is easy to show that as
labor supply increases, the average market wages will fall, ceteris paribus While economic theory .

suggests a clear cut answer most empirical work suggests immigration has a
, empirical evidence rarely supports the theory. In fact,

negligible negative impact, or even a slight positive impact, on wages Borjas (1994) and the of demographically comparable natives.26 26

Kerr and Kerr (2011) provide comprehensive reviews of this literature . Several arguments can be made as to why the empirics fail to match the economic theory. First,

endogenous characteristics of local labor markets may be driving

immigrant location decisions are , such that This immigrant location decisions. endogeneity may take

To alleviate this
several forms. Immigrants may choose to locate in high wage cities, natives may respond to immigrant inflows by moving, or firms may reallocate capital to high-immigrant cities in order to take advantage of the abundance of cheaper labor.

concern, Borjas et al. (1997) suggested that the analysis move away from analyzing local labor markets;
rather, researchers should use national-level data and treat the entire US as one labor market . Second,

Aydemir and Borjas (2011) suggest that sampling error leads to attenuation bias Due to the nature of .

the model, even small levels of measurement error can have large impacts on the estimated
coefficients Even when one treats the US as a single labor market, past studies fail to compare
.

immigrants to demographically comparable natives that will directly compete in the labor market It is .

in this area that the present paper will contribute to the existing literature It has become standard in the .

literature to analyze the impact of immigration on similarly skilled natives within cohorts defined by
education and work experience. This approach, pioneered in the immigration literature by Borjas (2003), implicitly assumes that within these cohorts, immigrants a nd natives are perfect substitutes. Recently, however, the
assumption of perfect substitutability has been challenged, and estimates suggest that a degree of imperfect substitutability exists between immigrants and natives within these cohorts (Card, 2009; Ottaviano and Peri, 2012; Manacorda et. al, 2012). As pointed out by Ottaviano and Peri

the incidence of imperfect

(2012), this fact is nontrivial. If immigrants and natives are imperfect substitutes, then any wage effect of immigration would be concentrated on existing immigrants, not natives. We claim that

substitutability arises due to the empirical model employed in previous studies – education is an
imperfect proxy for overall skill level. To see this, consider three empirical regularities. First, there is a small literature examining the differential impacts of immigration on natives by race. In this literature, researchers

stratify labor markets by education and race and find that immigration has a differential impact on black wages relative to white wages, but the evidence is mixed. Using the national labor market approach, Borjas et al. (2010) find that the impact of immigration is 33% lower on black men
relative to white men. Altonji and Card (1991), who examine the impact of immigration on the wages of less -skilled (educated) workers using the area approach, find the opposite. Their first-differenced results (row 4 of Tables 7.8 and 7.9) suggest that a 10% immigration shock has a
(roughly) 70% larger (more negative) effect on the average wage of less-skilled blacks than less-skilled whites. Though the results differ in the direction of the differential impact (which is likely due to differences in methodology and/or sample selection), it is clear that the impact of
immigration is not constant across races within education groups. If education is a good proxy for overall skill, then one would expect the impact of immigration to be constant across all workers within an education group. The differential effects on black wages estimated in this literature,

there is significant wage dispersion

however, suggest whites and blacks are not perfect substitutes within education groups; thus, calling into question the use of education to stratify labor markets. 46 Second,

within education groups Levy and Murnane, 1992; Murnane, Willett, and Levy, 1995; Ingram and
(

Neumann, 2006). This suggests that skills other than educational attainment are being rewarded in the
labor market immigrants earn less than similarly educated natives Bratsberg and Terrell, 2002;
. Third, (

Bratsberg and Ragan, 2002; Ferrer and Riddell, 2008; Friedberg, 2000). This fact has been attributed to differing employment distributions across occupations and a
lower return to education for immigrant workers. A similar argument is found in the geography literature when discussing the disparate value of “credentialized cultural capital” in determining immigrant/native wage gaps in Canada (Bourdieu, 1977; Reza, 2006). In this literature,
credentialized cultural capital refers to the level of educational attainment. Although immigrants may have more credentialized cultural capital (higher educational attainment), domestic employers do not value education earned abroad as highly as education earned domestically. Several
feasible scenarios exist for the above differentials in returns to education. First, US employers may be simply discriminating against immigrants and either underpaying for their skills or refusing to hire immigrant workers (Borjas, 1990). While feasible, Bucci and Tenorio (1997) decompose
the wage gaps between white natives and immigrants and find that the majority of the wage differential is simply US employers overvaluing native skills, not undervaluing immigrant skills. Similarly, Reimers (1983) documents that while discrimination may play a minor role in the wage

immigrants face differential returns to education

gaps of Hispanic immigrants; differences in observable characteristics (i.e. language proficiency) explain the majority of the wage differences. Second,

because they are being “misplaced” in the labor market. That is, immigrants enter the US and are
pushed toward jobs in which they possess too much education than the average worker . One reason for under-placement is that
educational attainment is a subjective measure between countries and over time within countries. Peracchi (2006) notes that years of schooling or the schooling level may reflect varying levels of literacy in 47 different countries. As researchers are interested in the effects of immigration
on demographically comparable natives and many immigrants receive the entirety of their education abroad, stratifying labor markets by education may not identify immigrants and natives that directly compete in the labor market. Because of differences in education standards across
countries, immigrants may be misplaced because skills learned in the host country are not transferrable to the US labor market. While many cases of skilled immigrants taking unskilled jobs are reported in the national media, this fact is supported by the data (Mattoo et al., 2008; Neagu,
2009). Figure 3.1 confirms this phenomenon for low-skill occupations. The figure plots the percentage of native and immigrant workers with a high school degree or some college that work in low-skill occupations. Holding educational attainment constant, immigrants are more
concentrated in less-skilled occupations and the gap is widening over time. Thus, it seems reasonable to assume that these workers will not directly compete in the labor market. Further evidence of this phenomenon can be seen in Table 3.1 below. Table 3.1 presents the percent of
workers that are classified as over-educated for their current job. Here, we define over-educated as having significantly more education relative to others working in the same occupation (more detail below). Table 3.1 uses occupation-specific education requirements from the ONET and
matches these data to US Census micro-data from 1970-2010. Specifically, we use O*NET data for the required level of education needed to adequately perform the job. These data give a value of 1-100 for 12 education groups, which map directly to the percentage of the total
employment in each occupation that holds said level of education. We collapse these 12 education groups into 7 categories: less than high school, high school graduate (or equivalent), some college – no degree, Associate’s Degree, Bachelor’s Degree, Master’s Degree, and
Doctorate/Professional Degree. We are interested in the share of the population who possess above average education for their current job. That is, they work in an occupation for which they 48 hold significantly more education than the rest of the labor force in the given occupation.
Using the data on required education, we group occupations based on the level at which the worker would be considered over-educated: over-educated if holding at least a bachelor’s degree, overeducated if holding at least a master’s degree, over-educated if holding a
doctorate/professional degree, or never over-educated. We do not consider the case in which someone is over-educated for a job if they hold an associate’s degree or some college but no degree. This follows from the wage structure literature which suggests that high school dropouts
and high school graduates are perfect substitutes (Katz and Murphy, 1992).27 The table presents over-education rates for natives, all immigrants, and immigrants who have been in the US for less than 5 years. The differences in over-education rates by nativity are significant, especially
for those persons holding advanced degrees. For all occupations, immigrants are nearly twice as likely to be over-educated for their job compared to natives. In occupations that generally require a bachelor’s degree, 15.18% of the immigrant workers hold an advanced degree compared
to 6.18% of natives. Column (3) displays over-education rates for newly arriving immigrants. Unsurprisingly, new immigrants have higher over-education rates than the entire immigrant population, which likely reflects the lack of transferability in immigrant skills upon entry (i.e. language
skills). From the immigrant assimilation literature however, we would expect this rate to decline significantly as immigrants remain in the US. Figure 3.2 plots the over-education rates for immigrants across all occupations by length of time in the US and region of birth. Contrary to the
assimilation hypothesis, the over-education rate for the entire immigrant population (solid line) is relatively constant over tenure in the US, around 10%. Because assimilation is affected by English proficiency and cultural similarities, we also plot over-education rates by region of birth.
The constant over-education rate persists for immigrants from Central and South America 27Similarly, when grouping workers into high- and low-education groups, the authors allocate a share of the “some college, no degree” group to the low-education group. Thus, we follow this
reasoning and assume that workers with less than a bachelor degree are not over-educated if they work in lower-skill jobs that typically do not require any college education. 49 (dotted line) and Asia (dashed line). Though the magnitudes are different, the underlying trend is the same.
For European immigrants (dash-dot line) however, over-education rates are decreasing over time, consistent with positive occupational mobility associated with assimilation. While decreasing, the over-education rate for the longest tenured immigrants is still roughly 9%. If it is the case
that many immigrants are being “misplaced” in the labor market on the basis of education, then previous studies analyzing wage impacts within education-experience cells may not tell the whole story. That is, immigrants and natives with the same educationexperience profile may not be
directly competing in the labor market, which would explain the negligible impacts found in the existing literature. While the under-placement scenario is the main focus, the discrimination scenario is not without merit. As Reimers (1983) indicated, discrimination plays a minor role in the
immigrant-native wage gap. Thus, if this discrimination is in the form of employers preferring to hire native workers, this may force more immigrants into occupations for which they are over-educated. For these reasons, we argue a better measure of labor market competition is to
stratify the labor market by occupation. While this seems like a logical empirical test, existing studies incorporating occupations as a proxy for skill are relatively sparse. To my knowledge, only three such studies exist. Camarota (1997) uses one CPS cross-section to estimate the impact of
immigration on wages within occupations and finds that a 1% increase in immigration will decrease the wages of the average native worker by 0.5%. However, the use of a single crosssection and small within-occupation sample sizes, make causal inference difficult. Card (2001) estimates
city-specific impacts of immigration on occupational wages for 175 cities using 1990 US Census data and finds that the immigration inflows of the 1980’s decreased wages in lowskilled occupations in high-immigration cities by no more than 3%. Orrenius and Zavodny (2007) use CPS data
from 1994 – 2000 and INS immigration data to estimate the impact of immigration on native wages in 3 broad occupation categories. The authors estimate that the 50 change in immigrants over the data period decreased wages in low-skilled, manual occupations 0.8% and had no impact

The present study improves upon past research in several ways First, following Borjas
for medium-skilled and high-skilled occupations. .

and Katz (1997) and Borjas (2003), we move away from the area studies of Card (2001) and Orrenius and
Zavodny (2007) and treat the U.S. as one national labor market Area studies have been criticized .

because they implicitly assume that native labor and capital do not adjust across labor markets in
response to immigration. If the existing population relocates inputs to areas (or occupations) less
affected by immigration, then the impact of immigration will be underestimated. Second, we construct
occupation groups defined using skill data from the O*NET. Previous studies using occupations have
relied on broad Census-defined occupation groups. The advantage of using the O*NET data is that we
are able to construct occupation groups with a greater degree of homogeneity in overall skill level,
regardless of nationality and citizenship status, than those using either education groups or broad
occupation classifications . The rest of the paper is structured as follows. Section 3.2 outlines the data and the methodology used to define occupation groups. Section 3.3 outlines the potential problems with stratifying labor markets by

education when analyzing the impact of immigration on native wages. We first analyze differences in employment shares of immigrants and natives along skill distributions. The results suggest that immigrants are underrepresented (overrepresented) in communicative (manual/physical)

task intensive occupations. This result holds for the entire population and within education groups. Next, we analyze the differences in the rate of return to education paid to natives and immigrants. We show that immigrants are
paid a lower rate of return than natives and this leads to a heavier concentration of immigrants in low-wage jobs. As discrimination has been shown to play only a minor role in immigrant-native wage gaps, this

The results 51 confirm When we

suggests that similarly educated immigrants and natives work in different jobs. Section 3.4 presents the empirical methodology and results similar to those in Borjas (2003). the intuition above.

stratify labor markets by occupations, the impact of immigration is nearly twice as large as those
found in the existing literature. This result is robust to several different definitions of occupation
groups and when we control for selection problems associated with occupations . In section 3.5, we address the concern that the use of

occupationdefined skill groups may introduce bias. Using the traditional education-experience skill cohorts, we show that the impact of immigration on the wages of demographically comparable natives within education groups is quantitatively similar to the estimated impact when using
cohorts defined by occupational skill. As such, the impact on wages is muted because immigrants and natives are imperfectly s ubstitutable within education groups. Section 3.6 concludes.
 --AT: Projections/”Net Effect”
Immigration generates transitory period- results in native job loss for 5 to 10 years
post-immigration influx- Short term effects are all that matter for our impact
Rowthorn, Emeritus Professor of Economics at the University of Cambridge and Fellow of King’s
College, 15 (Robert, “The Costs and Benefits of Large-scale Immigration”, Civitas, December 2015, p. 23-
24, http://www.civitas.org.uk/content/files/largescaleimmigration.pdf, accessed on 7-12-18, JM)

Most studies in this area are concerned with individual countries. There are two important studies which
take an international perspective. In their econometric study of EU countries, Angrist and Kugler (2003)
find a pattern of ‘reasonably stable negative effects’ of immigration on native male employment. The
estimated effects vary according to the method of estimation, but in some cases they are large and
statistically significant: up to 83 native male jobs lost for each 100 male immigrants. For women the
results are mixed and more difficult to interpret. In a study of 18 OECD countries, including the UK, Jean
and Jiménez (2007) conclude that their estimates do not find any permanent effect of immigration,
measured as the share of immigrants in the labour force, upon natives’ unemployment... however, the
transitory impact may be substantial; its magnitude and duration largely depends on the persistence of
unemployment shocks, and it may last between five and ten years. Five to 10 years is a long time and it
refers to a one-off rise in the share of immigrants in the national labour force. The share of immigrants
in all advanced OECD countries is on an upward trend and may continue rising for some years. If the
estimates of Jean and Jiménez are correct, they imply that there will be a prolonged rise in native
unemployment in some of these countries because of immigration. The UK has a relatively flexible
labour market, so the employment effects supposedly identified by these authors should be smaller and
less durable than those of the typical OECD economy. Even so, they could still be quite large. This is an
area of great uncertainty, so neither of the two international studies should be taken as infallible.
However, they put a question mark over the optimistic claim that natives have little to fear from
immigration.
 2NC Link-Low Skilled
An influx of immigrants into low-skilled jobs decreases wages –similar skill level and
finite low-skilled jobs increase competition
Camarota 98 (Steven, Steven Camarota received his Ph.D. in policy analysis from the University of
Virgnia. He is Resident Scholar at the Center for Immigration Studies and holder of the Center’s 1997-
1998 Fellowship in Immigration Studies, made possible by a grant from the Henry Luce Foundation, Inc,
(This research also appears in the summer issue of the academic journal Social Science Quarterly and is a
chapter in a forthcoming book on the globalization of the economy published by the Council on Foreign
Relations.), “The Wages of Immigration, The Effect on the Low-Skilled Labor Market”, Center for
Immigration Studies, January 1st, 1998, https://cis.org/Report/Wages-Immigration) MJG
Because the dependent variable is the log of weekly wages, the coefficients can be interpreted as simple percentages. Thus, the slope of -.0051 for the immigrant
variable in the first regression means that for each one percent increase in the immigrant composition of an individual’s occupation a worker’s weekly wages decline
by about one half of one percent.
Since nativeborn workers are in occupations that are 9.5 percent immigrant on
average, these findings suggest that immigration may reduce the wages of the typical worker by perhaps
4.9 percent. The relationship between immigrants and wages is more complex than that represented by the first model in Table 1. The interactive term and
the original immigrant variable in the second regression found in column two indicate that the effect of immigrants is dependent upon the average education level
of the occupation. The range for the slope of the immigrant variable is as follows: At the bottom end of the range is an occupation with an average education level
of 1.6. This value multiplied by the .0112 interactive term is .018. The immigrant variable’s slope in the interactive equation is -.029; therefore,
in the
lowest-skilled occupations the slope of the immigrant variable is -.011, indicating that immigrants have a
relatively large effect. The high range for the occupational education variable is 4.9. This value multiplied by the interactive term slope is .055. The sum
of the immigration variable and the interactive term in the highest-skilled occupation is .026. Therefore, the slope of the immigrant variable ranges in value from -
.011 to .026. This
indicates that at the highest skill-level immigrants increase wages, while in the lowest-
skilled occupations they depress wages. We will deal with the higher-skilled occupations shortly; first, let us turn to lower-skilled occupations.
If we examine the 23 percent of natives employed in those jobs that on average are done by workers

with only a high school degree or less (henceforth referred to as low-skilled occupations), we get the following
results: The product of the interactive slope and the average occupational education level of 1.8713 is .021. The sum of this figure and the immigrant variable is -
.008. This means that in low-skilled occupations, a
one percent increase in the immigrant composition of an individual’s
occupation reduces wages by .8 percent. Since these occupations are on average 15 percent immigrant,
this suggests that immigration may reduce the wages of the average native in a low-skilled occupation
by perhaps 12 percent compared to a worker with the same individual and occupational attributes
except with no immigrants in his occupation.14 This comes to $36.84 a week for a group of workers that
made only $307 a week in 1991. On a yearly basis the reduction is $1,915.68 from wages of $15,964 in
1991. While the second regression does indicate that immigrants have a negative effect on workers in low-skilled occupations, only 40 percent of native-born low-
skilled workers are employed in lowskilled occupations, and low-skilled workers comprise 80 percent of the native-born workers in these occupations.
The
question remains: Does immigration policy bear any responsibility for the labor market difficulties of
low-skilled workers in general? The answer based on the third regression in Table 1, which reports the
effects of immigration on only native-born low-skilled workers, appears to be yes. The regression coefficient for the
immigrant variable is -.0066 and is slightly larger than that of the immigrant variable in the first regression. Based on the sample, the average weekly wages of low-
skilled workers was $341 a week in 1991. A .66 percent reduction in weekly wages for these workers is $2.25. Low-skilled workers are in occupations that are on
average 10.6 percent immigrant. Thus,
the average low-skilled worker’s wages were reduced by $23.86 a week in
1991 or 7 percent. If we examine hourly wages we find a pattern similar to the one found in Table 1. Table 2 reports a series of regressions using the
same control variables as in Table 1 except that the dependent variable is the log of hourly wages. The size of the effect of immigration is somewhat smaller than in
the weekly regression, but the effect of immigration on wages is similar. The slope of -.0029 for the immigrant variable in the first regression means that for each
one percent increase in the immigrant composition of an individual’s occupation a worker’s hourly wage declines by .3 percent. Since
native-born
workers are in occupations that are 9.5 percent immigrant on average, the typical worker is
experiencing a reduction in hourly wages of 2.8 percent as a result of immigration. This is somewhat less than the 4.9
percent figure found in the first regression in Table 1. The coefficients for the interactive model found in the second column of Table 2 indicates that, as was the
case with weekly wages, the effect of immigration varies across occupations, with the negative effect being confined to lower-skilled occupations and workers. If we
again examine the 23 percent of natives employed in low-skilled jobs, we get the following results: The product of the interactive slope and an average education
level of 1.87 is .018. The sum of this figure and the immigrant variable is -.0042. This means that in low-skilled occupations, a one percent increase in the immigrant
composition of an occupation reduces hourly wages by .4 percent Since these occupations are on average 15 percent immigrant, an estimate of the impact of
immigration on the hourly wages of natives employed in low-skilled occupations is 6 percent or about half the level found in the weekly regression. The third
regression in Table 2 reports figures for only low-skilled workers. The
regression of low-skilled workers indicates that for each
one percent increase in the immigrant composition of a low-skilled worker’s occupation, hourly wages
fell by -.63 percent. Since low-skilled natives are employed in occupations that are on average 10.6 percent immigrant, this translates into a reduction in
hourly wages of 6.7 percent for this category of worker. This is very similar to the third regression found in Table 1. The results of the hourly regressions in Table 2
indicate that the effect of immigration on the hourly wages of low-skilled occupations and wages is somewhat less than its impact on weekly wages. The
most
likely explanation for the difference is that immigrants reduce both hours worked per week as well as
hourly wages. Therefore, the effect of immigration on weekly wages is greater because it reflects both a
reduction in hourly wage rates and hours worked per week. Although the reduction in wages is smaller when measured in hourly
terms, the results of the hourly regression adds strong support to the findings of the weekly regressions in Table 1. When taken together, the

findings in Tables 1 and 2 shed a good deal of light on how immigrants affect the wages of low-skilled
workers and occupations. The primary negative effect of immigration is in low-skilled occupations.15
Because so many low-skilled workers are employed in low-skilled occupations, immigrants adversely
affect the wages for low-skilled natives. The fact that in higher-skilled occupations immigrants do not depress wages and may increase them
indicates that it is not enough simply to be lowskilled. It is a worker’s occupation and not his skill level per se that makes him vulnerable to immigrant competition.
The model itself is biased toward producing occupational-level effects because the immigrant variable is assigned by occupation. However, the six individual-level
variables, along with the wage-inflation variable, create significant differences in the characteristics of individuals in the same occupation. Additionally, the results
make intuitive sense. The likely avenue by which immigrants affect native-born wages is by occupation or by groups of occupations in which there is a good deal of
movement back and forth. This study has focused primarily on the negative effect of immigration on low-skilled workers and occupations. There are a number of
reasons for this emphasis. First, as has already been pointed out,
it is low-skilled workers who have experienced the most
difficulty in the labor market. Determining whether immigration lowers the wages of this group of
workers is clearly a very important question for policymakers and social scientists. Second, only about 7
percent of the workers in the top one-third most-skilled occupations are immigrants. In contrast, about
15 percent of the workers in low-skilled occupations are immigrants. Therefore, it is in these low-skilled
occupations that immigrants have the greatest impact. Third, there is reason to believe that the positive
coefficients for the immigrant variable in higher-skilled occupations may not mean that immigrants
cause higher wages in these occupations. This is because it is very likely that distinct labor market forces
are at work at the opposite ends of the labor market. Lowskilled immigrants often come to the U.S.
because they face bleak prospects in their home country. They are, in effect, pushed into the U.S. by conditions at home. In
contrast, immigrants with high skill levels tend to be pulled to the U.S. by the possibility of better wages.
In every country skilled persons enjoy a higher standard of living than do the unskilled. It would take a significant
wage differential between the U.S. and their home country to lure immigrant professionals to this country. Therefore, since information about earnings differentials
are not included in this study, we would expect to find the highest percentage of immigrant professionals in those occupations with the highest wages. The higher-
paying the occupation in the United States the greater the probability that there will be a large wage differential between the U.S. and the rest of the world. The
large number of immigrants in such high-skilled occupations as medicine and engineering partly attests to this phenomenon. These conditions would produce a
situation in which immigrants are concentrated in the highest-paying occupations, but do not cause the higher wages. It
is certainly possible that
high-skilled immigrants increase wages for natives. Immigrant professionals may be in possession of
skills and knowledge that their native-born counterparts lack. This specialized knowledge may then be
transferred to natives in the same occupation. This would then make natives more productive and thus
might increase their wages. However, at the bottom end of the labor market this is much less likely to be
true. Immigrant agricultural workers or dishwashers are unlikely to possess specialized skills that their
native-born counterparts lack. Thus, the primary effect low-skilled immigrants have on natives in the
same occupation is competition. It is also important to realize that if immigrants do increase wages for those at the top of the labor market, only
about 25 percent of the work force is employed in occupations that would benefit significantly from immigration, and it is the 25 percent of the work force least in
need of an increase in pay. The
different signs for the percent-immigrant variable at the opposite ends of the labor
market may also be due to different conditions prevailing at the opposite ends of the labor market in
the United States. The decline in wages for less-skilled workers is powerful evidence that less-skilled
labor is not in short supply. Additionally, the proportion of the work force employed in occupations that require few years of schooling has fallen in
every decade in the postwar period. The opposite is true in higher-skilled occupations where there has been steady and continual growth in the number of jobs
requiring skilled workers. This
means that in higher-skilled occupations immigrant labor may be more easily
absorbed into an ever-expanding pool of jobs, while in low-skilled occupations immigrants and natives
are competing for an ever-dwindling supply of low-skill jobs.

Lowers annual wages 8%

Malanga, George M. Yeager Fellow at the Manhattan Institute, 06 (Steven, “Why Unskilled
Immigration Hurts America”, The Manhattan Institute, 7-23-2006, https://www.manhattan-
institute.org/html/why-unskilled-immigrants-hurt-america-0351.html, accessed on 7-13-18, JM)

The flood of immigrants, both legal and illegal, from countries with poor, ill-educated populations, has
yielded a mismatch between today's immigrants and the American economy and has left many workers
poorly positioned to succeed for the long term. Unlike the immigrants of 100 years ago, whose skills
reflected or surpassed those of the native work force, many of today's arrivals, particularly the more
than half who now come from Central and South America, are farmworkers in their home countries who
come here with little education or even basic training in blue-collar occupations. Nearly two-thirds of
Mexican immigrants, for instance, are high school dropouts, and most wind up doing either unskilled
factory work or small-scale construction projects, or they work in service industries, where they
compete for entry-level jobs against one another, against the adult children of other immigrants, and
against native-born high school dropouts. Of the 15 industries employing the greatest percentage of
foreign-born workers, half are low-wage service industries, including gardening, domestic household
work, car washes, shoe repair and janitorial work. Studies show that immigrants drive down wages of
native-born workers and squeeze them out of certain industries. Harvard economists George Borjas and
Lawrence Katz, for instance, estimate that low-wage immigration cuts the wages for the average native-
born high school dropout 8 percent, or more than $1,200 a year. Even economists who don't find as
much of an impact on all native Americans admit that the new workers push down wages significantly
for immigrants already here and native-born Hispanics. Consequently, the sheer number of immigrants
competing for low-skilled service jobs makes economic progress difficult. A study of the New York City's
restaurant business, for instance, found that 60 percent of immigrant workers do not receive regular
raises, while 70 percent had never been promoted.

Immigration drives down wages of low-skill jobs in the U.S. – empirics prove
Borjas 16 (George is a professor of economics and social policy at Harvard, he is also a fellow of the
Econometric Society and the Society of Labor Economists. He was also economic advisor to the
Governor of California from 1993 to 1998, and chaired the National Science Foundation’s Committee of
Visitors for the Economics Program – “The Wage Impact of the Marielitos: A Reappraisal,” February 13,
2017 pgs. 8-10 – http://journals.sagepub.com/doi/abs/10.1177/0019793917692945)///JP

The very low skills of the Marielitos indicate that we should perhaps focus our attention on the labor
market outcomes of the least-educated workers in Miami to establish a first-order sense of whether the
supply shock had any impact on Miami’s wage structure. The literature sparked by Borjas (2003)
supports the importance of matching the immigrants to corresponding native workers by skill groups.
Educational attainment is a skill category that would seem to be extremely relevant in an examination of
the Mariel supply shock. Any empirical study of the impact of Mariel runs into an immediate data
problem: The number of workers enumerated by the CPS in the Miami labor market is small, introducing
a lot of random noise into the calculations. The top panel of Table 3 reports the number of men who
satisfy the sample restrictions and who were enumerated in the Miami metropolitan area between
survey years 1977 and 1993. The average number of observations in each pre-1990 March CPS was 96.5,
and the average number of high school dropouts was 19.5. The sample size drops dramatically with the
1991 survey, when the number of non-Hispanic men sampled in Miami falls abruptly (by nearly a third),
and the number of high school dropouts some- times drops to the single digits. The empirical analysis
reported below will effectively pool at least three years of the CPS (either by manually aggregating the
data or by estimating impacts for three-year intervals) to enable a more precise calculation of the effect.
I begin by carrying out the most straightforward calculation of the potential wage impact that uses all
the available data. In particular, I simply calculate the average log weekly wage of high school dropouts
in Miami each year between 1972 and 2002, the period for which the March CPS has a consistent time
series for the Miami metropolitan area. 18 Figure 2 illustrates the wage trend and the 95% confidence
band around the mean, using a three-year moving average to smooth out the noise in the time series.
The figure also shows the trend for similarly educated non-Hispanic men working outside Miami. Note
that this simple exercise does not adjust the CPS data in any way (other than taking a moving average),
so it provides a transparent indication of what happened to low-skill wages in pre- and post- Mariel
Miami. Despite the similarity in wage trends between Miami and the rest of the country prior to 1980,
and despite the small sample size for the Miami metropolitan area, it is obvious that something
happened in 1980 that caused the two wage series to diverge in a statistically significant way. Before
Mariel, the log wage of high school dropouts in Miami was about 0.1 log points below that of workers in
the rest of the country. By 1985, the gap had widened to 0.4 log points, implying that whatever caused
the divergence had lowered the relative wage of low-skill workers in Miami by about 30%. The low-skill
wage in Miami fully recovered by 1990, only to be hammered again in 1995, perhaps coincidentally with
the time of the Little Mariel supply shock. By 2002, the wage gap between high school dropouts in
Miami and elsewhere had returned to its pre-Mariel normal of about 0.1 log points.

Immigration dramatically decreases the wages of native workers- uniquely harms

high-school dropouts and college graduates
Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School, 03 (George, “THE
LABOR DEMAND CURVE IS DOWNWARD SLOPING: REEXAMINING THE IMPACT OF IMMIGRATION ON
THE LABOR MARKET”, The Quarterly Journal of Economics, November 2003,
https://sites.hks.harvard.edu/fs/gborjas/publications/journal/QJE2003.pdf, accessed on 7-11-18, JM)

My estimates of the own factor price elasticity cluster between - 0.3 and - 0.4. These estimates,
combined with the very large immigrant influx in recent decades, imply that immigration has
substantially worsened the labor market opportunities faced by many native workers. Between 1980
and 2000, immigration increased the labor supply of working men by 11.0 percent. Even after
accounting for the beneficial cross effects of low-skill (high- skill) immigration on the earnings of high-
skill (low-skill) workers, my analysis implies that this immigrant influx reduced the wage of the average
native worker by 3.2 percent. The wage impact differed dramatically across education groups, with the
wage falling by 8.9 percent for high school dropouts, 4.9 percent for college graduates, 2.6 percent for
high school graduates, and barely changing for workers with some college.

Immigrants replace and compete with native for low-skilled jobs and incentivize
government to prioritize outsourcing solutions rather than fixing the alternative
causes to depresses wages and employment for natives
Richwine 16 (Jason, “Immigrants Replace Low-Skill Natives in the Workforce Evidence from the
American Time-Use Survey”, Jason Richwine, PhD, is an independent public policy analyst based in
Washington, D.C., and a contributing writer at National Review. Center for Immigration Studies,
September 28, 2016, https://cis.org/Immigrants-Replace-LowSkill-Natives-Workforce) MJG

Are immigrants replacing low-skill natives in the workforce? Consider the evidence. Since the early
1960s, prime-age men have been dropping out of the labor market even as immigrants were coming to
the United States in increasing numbers. Since 1994 — when separate immigrant and native estimates
first became available — the percentage of native-born high school dropouts not in the labor force rose
from 26 percent to 35 percent. Over the same period, the percentage of immigrant dropouts not in the labor force actually
improved from an already-low 12 percent to 8 percent. In terms of hours worked, native-born dropouts worked the
equivalent of only 34.8 full-time weeks per year over the 2003-2015 period covered by the American
Time Use Survey, while immigrant dropouts worked 48.9 weeks. Native-born dropouts have seen their
work time decline from 41 weeks in 2003-2005 to 32 weeks in 2012-2015, while immigrant dropouts
went from 52 to 50. And while natives fell from 56 percent of the nation's high school dropouts to 52 percent, their share of the labor
performed by all dropouts declined much more sharply — from 50 percent in the 2003-2005 period to 40 percent in 2012-2015. In summary,
the United States has been a magnet for low-skill immigration even as low-skill natives have worked less and less. It is difficult to avoid
the conclusion that immigrants replace natives in the workforce. However, note the careful choice of the word replace.
The results presented in this study do not prove that immigrants push out (or displace) natives. Competition from immigrants is just one of
many potential explanations for declining work among low-skill natives. Progressives tend to blame the loss of good-paying union jobs, for
example, while conservatives focus more on the expansion of the welfare state and weakened social sanctions against idleness. Regardless
of the reasons that native-born men are not working, immigration devalues the problem. Instead of
searching for ways to get natives back to work — whether through higher wages, less access to welfare,
social pressure, or some other means — government and business leaders have brought in immigrants
to do the work instead. The White House has openly touted this replacement: Immigration reform would raise the overall participation
rate by bringing in new workers of prime working age, offsetting some of the macroeconomic challenges associated with the long-run decline in
prime-age male participation.22 In other words, immigration is a substitute for addressing the real problem. Imagine how the focus of
politicians and businessmen would change if there were no supply of new immigrants to harvest their vegetables, weed their gardens, or hang
their drywall. They would likely take a much greater interest in getting idle American men back to work. Without
immigration to
function as a band-aid, U.S. leaders would suddenly have a strong incentive to tackle the work problem
and all the social dysfunction associated with it. Some may conclude that native-born men are hopelessly lazy, and that more
immigrants are therefore needed to keep labor-intensive industries going. That is the view of advocates who promote immigrant labor for "jobs
that Americans won't do".23
Those advocates have abandoned the idea that idle Americans can be brought
back into the mainstream of society, yet it was only 50 years ago that virtually all prime-age men
worked. Immigration restriction alone may not solve the problems endemic to the American underclass,
but it restores the incentive to help.
 2NC Link-Low Skilled-Manufac DA
Low skilled immigrants compete with natives for manufacturing jobs, decreasing
wages
Gould 18 (Eric, Corresponding author: Eric Gould, Department of Economics, Mt. Scopus, Hebrew
University of Jerusalem, Jerusalem “Explaining the Unexplained: Residual Wage Inequality,
Manufacturing Decline and Low‐skilled Immigration”, April 10th, 2018,
https://onlinelibrary.wiley.com/doi/abs/10.1111/ecoj.12611) MJG

The last several decades witnessed a decline in manufacturing employment and an increase in
inequality, but at the same time, an influx of low-skilled immigrants altered the demographics of the
labour market in a substantial way. Figure 9 illustrates this trend by showing that the share of the population that are non-college immigrants
more than doubled in the last four decades (0.053 in 1970 to 0.150 in 2010). In the online Appendix, Figures A3 and A12 show that this increase occurred in almost
every state to varying degrees, but was larger in coastal states. This Section exploits this geographic variation in order to examine whether this supply shift in

less-educated labour exerted pressure on the low end of the wage distribution, thereby increasing the
overall dispersion of wages. Table 8 performs an analysis identical to the one above for the effect of the manufacturing sector on inequality, but
adds the share of the non-college population who are immigrants as an additional treatment variable of interest. Adding this variable has no effect on the
coefficient on manufacturing in columns (1)–(3), most likely because the local influx of immigrants is uncorrelated with the local decline in manufacturing (online
Appendix Figure A13).The lack of any direct effect of immigrants on native wages in columns (1)–(3) in Table 8 is consistent with the existing literature that exploits
geographic variation as an estimation strategy (Card, 2001, 2005, 2009; Cortes and Tessada, 2011). However, existing work has not used as many Census years in
the analysis, and focused on explaining inequality between education groups (i.e. the college wage premium)rather than inequality within groups (residual
inequality).As discussed above, it is possible that the impact of a surge in immigration interacts with the size of the
manufacturing sector. To test this hypothesis, columns (4)–(6) in Table 8include an interaction between the share of employment in manufacturing and
the share of non-college graduate immigrants in the population. For all three levels of aggregation, Table 8 reveals a striking

pattern whereby the immigrant share is positive and significant, and the interaction term is negative and
significant. These coefficients suggest that an influx of less-educated immigrants decreases inequality
when the manufacturing employment share is at the high level of the 1970s, but increases inequality
when manufacturing falls to the 2010 levels. (The turning point according to column (4) in Table 8 occurs when the manufacturing
employment share is at 23%, which is above the2010 aggregate share in Figure 4 and for most states in online Appendix Figure A9.)These findings

suggest that a strong demand for less-educated native workers in manufacturing makes them
complements with low-skilled immigrants, but the two groups become more substitutable when they
compete for the same jobs as the demand for native workers declines with the manufacturing
employment share. The last six columns of Table 8 perform the same analysis but with instrumental variables. Each regression instruments for all three
potentially endogenous control variables: the manufacturing share of employment, the share of immigrants in the non-college local population and the interaction
between the two. The instrument for the manufacturing employment share is the same as described above. The share of immigrants in the local population is based
on the same idea as the instrument for manufacturing. Following several studies in the immigration literature (Card, 2001,2005, 2009), the instrument is
constructed by using the cross-sectional shares of immigrants from various countries across geographic units in the United States in the base year, along with the
national trends in the share of immigrants from var ious countries. Essentially, the formula for the instrument is depicted by (2), with j now referring to immigrants
from country of origin j instead of industry j.15After instrumenting for all three variables of interest, the IV results in Table 8 are similar to those obtained using
OLS.16The size, direction and significance of each coefficient in each specification are very comparable, and confirm the idea that immigration does affect
inequality, but in a way that depends on the size of the manufacturing sector. On e could also interpret this from the other direction: the
effect of
manufacturing on inequality is strong and negative (less manufacturing jobs increase inequality) but this
effect increases with the size of the immigrant population. n other words, the downward pressure on wages in
response to a decline in manufacturing will be greater if there is also supply side pressure in the same
direction. This effect could be due to the endogenous choice of technology by manufacturing firms. But, it could also be exacerbated by the
overall fall in the demand for middle-skilled jobs, along with the increased supply of labour for lower
skilled jobs due to immigration and the outflow of natives from relatively well-paid manufacturing work.
This interpretation, however, implies that the decline in manufacturing and the influx of low-skilled immigrants are affecting inequality by putting downward
pressure on the low end of the wage distribution. This hypothesis is tested in Tables 9 and 10,which examine inequality at the top of the distribution (the 90/50
residual wage ratio)and the bottom of the distribution (the 50/10 ratio), respectively. Although there are some statistically significant coefficients for inequality at
the top tail in Table 9, the estimates are much larger, significant and robust across specifications and levels of aggregation in Table 10. These
findings
confirm the idea that the decline in manufacturing employment and the rise in low-skilled immigration
are putting downward pressure on the wages of less-skilled natives.

Decrease in manufacturing creates a negative displacement effect- spills over to other

sectors
Gould, Professor of Economics at Hebrew University, 18 (Eric, “EXPLAINING THE UNEXPLAINED:
RESIDUAL WAGE INEQUALITY, MANUFACTURING DECLINE AND LOW-SKILLED IMMIGRATION*”, The
Economic Journal, January 2018, p.2, https://onlinelibrary.wiley.com/doi/epdf/10.1111/ecoj.12611,
accessed on 7-12-18, JM)

However, existing work ignores the idea that a shrinking manufacturing sector not only shifts workers
across sectors of differing means and variances in wages, but could also create a general equilibrium
effect on the shape of the distribution of wages within all sectors. Specifically, a decline in the demand
for manufacturing workers could translate into a decline in the demand for similar, middle-skilled
workers across all sectors of the local labour market– creating downward pressure in particular on the
wages of workers at the low end of the income distribution. The most direct way this could happen is
through a displacement effect. Autor et al. (2015) and Charles et al. (2018) show that manufacturing
declines in the last few decades are associated with higher unemployment and lower employment.
Since manufacturing workers tend to be less educated, the increase in the supply of less-educated
workers looking to move into other sectors will create downward pressure on all workers of similar, low-
skill levels – which tend to be at the lower part of the wage distribution. This pattern is consistent with
the evidence that off shoring has created and has put downward pressure on wages by shifting workers
away from higher-wage manufacturing jobs into lower-paying sectors (Ebenstein et al., 2014). Negative
shocks to the manufacturing sector create inequality within and outside the manufacturing sector for
other reasons too. Autor et al. (2014) show that manufacturing shocks (due to import competition from
China since 1990 in their study) had much larger adverse effects on manufacturing workers at the lower
end of the wage spectrum compared to the upper end. They find that higher wage workers are better
able to find comparable employment in other sectors, and suffer smaller wage losses if they stay in the
same sector – compared to lower wage workers who suffer large wage losses if they stay or move out of
their specific sector within manufacturing. These findings suggest that manufacturing declines reduce
the overall demand for less-skilled workers, while higher wage workers have more general skills that
allow them to find comparable employment in other firms and sectors. Evidence for the spillover effects
on wages outside of manufacturing is found in Autor et al. (2013). They show that manufacturing
declines, in response to increased import competition from China, reduced the wages of workers in
other sectors. The effect seems larger for less educated workers as well. Bound and Holzer (1993, 2000)
also found that manufacturing declines reduced employment and wages during the 1970s and 1980s,
particularly for less-educated black men. These results suggest that the decline in manufacturing
reduced the demand for local non-traded services and increased the supply of labour into other sectors.
Both factors created downward pressure on the wages of workers even outside of manufacturing.
 2NC Link-High Skilled
High skilled immigrants push out similarly-qualified natives and decrease wages
Lin 17 (Gary, Cornell University, “The Distributional Impact of High-Skilled Immigration: A Task-Based
Approach”, May 18, 2017, https://editorialexpress.com/cgi-
bin/conference/download.cgi?db_name=MWITC2017&paper_id=40) MJG

Table 3 provides empirical support for the predictions of the model. The preferred specication in column 1 of Table 3 demonstrates that a one
percentage point increase in the share of immigrant STEM workers decreases native employment in
abstract occupations by 2.9 percentage points, indicating a statistically signicant displacement eect. To put
this in perspective, the interquartile range of CZ exposure to high-skilled immigration, i.e. a movement from a CZ in the 25th percentile to a CZ
in 75th percentile in terms of exposure, over the two decades from 1990 to 2010 is around 0.14 percentage points.21 Thus, the
crowding-out eect of native employment in abstract occupations is small (≈ 0.14 × 2.93 = 0.41) but non-
negligible. The table also veries the prediction of the model that displaced native workers reallocate into
routine occupations, showing a statistically signicant point estimate of 2.84 in the preferred speci-
cation. The point estimate on native manual worker is small and statistically insignicant. Changes in employment shares may still mask the
more subtle changes if employment adjustments take place on the intensive margin, i.e. through a reduction in weeks or hours of work. To
examine this channel of adjustment, I now empirically assess the reallocation of labor supply—dened as the total number of hours worked in
the previous year—among native workers across dierent tasks. Table 4 demonstrates that the results are qualitatively similar to the point
estimates from employment shares. However,
it is worth mentioning that the point estimate on native abstract
workers is now slightly more negative (−4.29 in the preferred specication compared to−2.93 from
before) which suggests that in addition to the reallocation of native workers from abstract to routine
occupations, there is also a reduction in the share of total hours worked in abstract occupations by
native workers overall. The point estimates on routine natives are statistically signicant quantitatively
similar to previous estimates while the point estimates on manual natives remain small and statistically
insignicant.

An increase in High skilled workers depresses wages and displaces lower-skilled

workers as they are forced to work down the occupational ladder
Green 15 (Beaudry, P., Green, D. A., and Sand, B. M. (2015). The Great Reversal in the Demand for Skill
and Cognitive Tasks. Journal of Labor Economics, 34(S1):S199–S247. Department of Economics,
University of British Columbia) MJG

As we noted at the outset, a substantial disagreement exists about the causes behind the current low
rate of employment in the US. Cyclical effects of the 2008 financial crisis likely play a role, and the
structural decline in employment in routine occupations and manufacturing jobs are certainly
contributing factors (Charles, Hurst, and Notowidigdo, 2012; Siu and Jaimovich, 2012). In this paper, we
present theory and evidence suggesting that to understand the current low rates of employment in the
US one needs to recognize the large reversal in the demand for skill and cognitive tasks that took place
around the year 2000. In particular, we have argued that after two decades of growth in the demand for
occupations high in cognitive tasks, the US economy reversed and experienced a decline in the demand
for such skills. The demand for cognitive tasks was to a large extent the motor of the US labor market
prior to 2000. Once this motor reversed, the employment rate in the US economy started to contract. As
we have emphasized, while this demand for cognitive tasks directly effects mainly high skilled workers,
we have provided evidence that it has indirectly affected lower skill workers by pushing them out of jobs
that have been taken up by higher skilled worker displaced from cognitive occupations. This has resulted
in high growth in employment in low skilled manual jobs with declining wages in those occupations, and
has pushed many low skill individual;s out of the labor market.

High skilled immigrants increasingly are forces to take low skilled jobs, further crowing
out native workers
Richwine 18 (Jason, “High-Skill Immigrants in Low-Skill Jobs”, Jason Richwine, PhD, is an independent
public policy analyst based in Washington, D.C., and a contributing writer at National Review. Center for
Immigration Studies, July 12th, 2018, https://cis.org/Report/HighSkill-Immigrants-LowSkill-Jobse) MJG

Highly educated immigrants, meaning those who arrive with a college degree or more, often find that
their skills do not fully transfer to the U.S. labor market. Many end up holding jobs for which they are
overqualified based on their paper credentials. This "occupational mismatch" among legal highly educated immigrants is the subject of
this report. By a moderate but significant margin, legal immigrants with at least a college degree are more likely than

natives to take low-skill jobs. More importantly, the severity of the mismatch varies widely across
sending regions. Legal immigrants from some regions of the world struggle much more than others to utilize their college or advanced degrees. As a
consequence, policy-makers should be cautious when designing an immigration system that selects for education. Some notable findings : Among

immigrants with a college degree, 20 percent have a low-skill (bottom third) occupation, compared to 7
percent of natives. Nearly 30 percent of Mexican immigrants with a college degree have a low-skill
occupation, as do 35 percent of Central American immigrants. About 85 percent of Canadian immigrants with at least a college
degree have a high-skill (top third) occupation, compared to 73 percent of natives and 53 percent of Mexican immigrants. Among immigrants with an advanced
degree, 37 percent have an elite-skill (top tenth) occupation, compared to 50 percent of natives. Length of U.S. residency is not strongly correlated with
occupational skill level. Introduction Much of the debate over immigration in the past several decades has focused on the low end of the skill distribution. Can a
postindustrial nation such as the United States manage the economic, fiscal, and social impact of taking in immigrants with low education? Although that question
remains important, some attention has shifted in recent years toward the impact of higher-skill immigration, for two main reasons. First, proposals to raise the
average skill level of legal immigrants have gained traction in policy circles and on Capitol Hill. The Cotton-Perdue RAISE Act, for example, would abolish extended
family preferences and reallocate employment-based visas toward a points system. Second, immigrants have become more educated
even in the absence of a policy change. The percentage of new working-age immigrants with at least a
college degree increased from 30 percent in 2000 to 49 percent in 2016.1 Highly educated immigrants
do not always secure high-skill jobs, however. Many experience "occupational mismatch", holding jobs
for which they are overqualified according to their paper credentials. Perhaps the most obvious reason is that some
immigrants lack the legal right to work in the United States.2 However, this report limits its analysis to legal immigrants . Occupational mismatch can

still occur among legal immigrants for a variety of reasons. Cultural obstacles include a lack of English
literacy and an unfamiliarity with regulations, networking, and licensing requirements in the U.S. labor
market.3 In addition, some skilled immigrants arrive on temporary visas that restrict their job options.4 Beyond
labor market obstacles, different countries may simply have different standards for earning degrees,
meaning that the actual skills of educated immigrants can vary considerably across sending nations.5 This
report offers new data on occupational mismatch among highly educated legal immigrants. It demonstrates that immigrant groups differ, on average, in how they
utilize their college or advanced degrees in the U.S. labor market. Some highly educated immigrants, such as those from Canada and Australia, generally take jobs in
the United States that require more skill than jobs held by comparably educated natives. By
contrast, highly educated immigrants from
places such as Mexico and Central America tend to take lower-skill jobs despite their credentials. The
occupational skills gap does not disappear as immigrants spend more time in the United States. These
results suggest a need for caution in designing a high-skill immigration system.
Increase in High-skilled immigrants crowds out native workers with similar skill sets
and education quality
Burstein et al 17 (Ariel Burstein UCLA Gordon Hanson UC San Diego Lin Tian Columbia University
Jonathan Vogel, Columbia University, “Tradability and the Labor-Market Impact of Immigration: Theory
and Evidence from the U.S.”, Yale.edu,
https://cowles.yale.edu/sites/default/files/files/conf/2017/Summer/International/Vogel-
Tradability%20and%20the%20Labor-
Market%20Impact%20of%20Immigration%20Theory%20and%20Evidence%20from%20the%20US.pdf)

6.2 Doubling of High-Education Immigrants. In this scenario, we set NˆI re = 2 for e = 3 (immigrants with a college education) and NˆI re = 1
for e = 1, 2 (immigrants with some college, a high-school degree, or less than a high-school education). At the 10th percentile of exposure to the immigration shock
(i.e., our measure x I r ), a commuting zone would see its effective labor supply increase by 0.5 percentage points, which grows to 3.7 percentage points at the 90th
percentile, 12.9 percentage points at the 99th percentile and 32.3 percentage points at the 100th percentile of exposure. The CZs with the greatest aggregate
exposure to changes in high-skilled immigration include San Jose CA, Miami FL, New York NY, Los Angeles CA, San Diego CA, and Houston TX. To summarize impacts
of the shock, we
again show changes in average real wages for lesseducated native-born workers and the
native education-wage premium, which are displayed in Figure 8. In the CZs at the 99th and 100th percentile of exposure, the real wage rises by
2.2 and 4.2 log percentage points, respectively, as compared to an increase of 0.8 percentage points for CZs at the 10th percentile of exposure. As in the previous
counterfactual exercise, this real-wage impact arises because of agglomeration externalities and because native and immigrant workers are imperfect substitutes,
so that increasing high-education immigrants raises native real wages. In the right panel of Figure 8, we see that because the immigration shock expands the relative
supply of more-educated immigrant labor in a CZ and because more-educated immigrants are relatively less substitutable with less-educated natives, the education
wage premium rises more in CZs that are exposed to larger increases in skilled foreign labor. Consistent with the logic operating in the previous shock, this effect
arises because moreeducated immigrants and less-educated natives tend to work in dissimilar occupations and not because they are relatively weakly substitutable
within occupations. Moving to adjustment in wages at the occupation level, Figure 9 shows changes in real
wages across occupations in Los Angeles for tradable and nontradable activities. Since there is a positive inflow of immigrants, most occupations
experience an increase in real earnings, owing to the negative impact of the increase in labor supply on the absorption price index. For the occupations

that are most exposed to the labor inflow, real wages decline, as the direct effect of expanded labor
supply on occupation wages more than offsets the fall in the price index. However, in sharp contrast with Figure 6, the
difference in real-wage adjustment between the two sets of occupations is now rather modest: the declines in real earnings for the most-exposed tradable and
nontradable occupations are roughly the same, while the increase in real-wages for the least-exposed occupations differ by roughly 2 percentage points between
the tradable and nontradable occupations.
In terms of relative earnings within the two groups, wages for the most-
exposed nontradable occupation (health assessment) fall by 6.6 percentage points more than for the
least-exposed nontradable occupation (extractive mining). In tradables, the difference in wage changes
between the most- and least-exposed occupation (natural sciences and fabricators, respectively) is 4
percentage points. Whereas in the case of the previous counterfactual exercise the difference in wage
changes between the most and least immigration-exposed occupations was 6.1 percentage points larger
in nontradables than in tradables, the difference in Figure 9 is just 2.7 percentage points. Figure 10, which plots
the difference in wage changes between the most- and least immigration-exposed occupations across CZs, provides further evidence of reduced differences in
occupation wage adjustment between nontradables and tradables in the high-skilled immigration experiment as compared to the Latin American immigration
experiment. In
nontradable jobs, most-least exposed occupation wage differences are clustered between 0
and −6 percentage points, whereas in tradable jobs the points are clustered in the slightly more compact
range of between 1 and −4 percentage points. In some CZs the wage of moreexposed tradable
occupations rises relative to the wage of less-exposed tradable occupations because of the general
equilibrium impact of immigration in other CZs.
Large immigrant migration causes wage shock that depresses low-skilled wages and
displaces some high-skilled native workers
Colas 17 (Mark, Mark received his B.A. from UC Davis in 2009 and will be receiving his PhD in
Economics from the University of Wisconsin this Spring, University of Wisconsin , “Dynamic Responses
to Immigration”, January 18th, 2017, https://wpcarey.asu.edu/sites/default/files/colasjmp.pdf) MJG

In this section I simulate an immigration inflow which increases the immigrant share as a fraction of
total unskilled workers by 10%. Choosing an immigration inflow of this magnitude is appealing for a number of reasons. First, I can easily compare
my results with those found in a large “reduced form” literature on the wage affects of immigration.16 Second, the simulated inflow is of similar magnitude to the
14.4 million applicants for the United States Diversity Immigrant Visa in 2015.17 First I examine the effects on wages and non-wage utility across all cities and
industries. Figure 9 shows the average wage change by education level and immigration status. The
immigration shock leads to an initial
wage decrease for unskilled workers and increase fo skilled workers. Immediately following the shock,
unskilled native wages decrease by 2.5%, unskilled immigrant wages decrease by 4.0% while skilled
native wages increase by 1.0% and skilled immigrant wages increase by 1.6%. Wages gradually converge
to their baseline trajectory over the sample period. By the end of the sample period, the wage effects are less than half the size as
immediately after the shock. One interesting result is that the wage effects for previous immigrants are considerably larger than those for natives. Ottaviano and
Peri (2012) come to a similar conclusion in their estimation of a national level production function. In their model, the differential effects of immigrant inflows on
natives versus previous immigrants arise because they allow for natives and immigrants to be imperfect substitutes in production. In this model I assumed that
natives and immigrants of the same skill level are perfect substitutes in production but assume multiple industries and local labor markets. Previous

immigrants experience a larger wage cut because they are more heavily concentrated in local labor
markets which receive large immigrant inflows. Figure 10 shows the change in non-wage utility. The effects are remarkably small, despite
the estimated large switching costs parameters. The presence of the idiosyncratic preference hocks for sector switching and migration imply that some agents are
close to the margin between two sectors or locations each period and therefore can switch sectors or migrate relatively painlessly. Given the small effect on non-
wage utility, I focus on the effects of immigration on wages for the remainder of the section. Next I explore heterogeneity in the wage effects felt by unskilled
workers. Figure 12 shows the average wage change for unskilled workers by their sector in the year prior to the immigrant shock.
Skilled intensive
sectors, which unskilled immigrants are least likely to be employed in, experience the largest wage drop.
To explain this result, from equation 4, first note that the derivative of log equilibrium unskilled human capital prices with respect to log unskilled labor when capital
can adjust fully is: The term in brackets is the share of total labor income that is paid to skilled labor.18 Th fore, for a given change in ln LnjtU , sectors in which
skilled labor has the largest income share will see the largest decrease in log human capital prices.19 As the distribution of new unskilled immigrants across sectors
is not drastically different than that of all unskilled workers, the change ln LnjtU is similar across sectors and skilled intensive sectors experience the largest drops in
log human capital prices. To illustrate this, figure 11 displays changes in unskilled human capital prices across sectors. We can see that the decrease in human
capital prices is smallest for the service sector. Figure 13 shows the effects on unskilled wages across local labor markets. The 12 local labor markets are listed across
the horizontal axis and are ordered by the size of their immigrant inflow as a fraction of their unskilled population. The solid dots show the percent change in wages
for unskilled workers in the year of the immigration inflow while the hollow dots show the effect on wages 20 years later. Intuitively,
workers who
work in cities which receive large inflows experience the largest wage decreases, both at the time of the
inflow and 20 years later. Miami Los Angeles, and New York, with immigrant inflows over 9% percent of
their population, see their unskilled wages decrease by over 3.9%, while Minneapolis, Detroit and Philadelphia, with
immigrant inflows less than 3% of their population, experience unskilled wage decreases less than 1.2%. 20 years later, the differences are smaller, but still present.
Miami, Los Angeles and New York still have 2% lower wages than in the case in which the immigrant inflow did not occur while Minneapolis, Detroit and
Philadelphia still have less than a 1% decrease in unskilled wages. To better understand how workers are responding to immigrant inflows, I next examine how the
distributions of workers across industries and labor markets change over time. Figures 14 and 15 shows the change in distribution of skilled and unskilled workers
across industries. Immediately after the immigrant inflow, the proportion the skilled workers in the unskilled intensive service industry increases by .2% while the
proportion in the skilled intensive professional decreases by .4%. Consistent with the Rybczynski theorem, over time skilled workers continue to switch out of the
skilled intensive sector and into the unskilled intensive sector. Figure 15 shows that, as the
immigrant share of unskilled workers
increases and immi grants are more likely to be employed in unskilled intensive industries, the
proportion of total unskilled workers in the service sector increases and the proportion in the
professional sector drops. These changes in the distribution of unskilled workers remain relative constant over the 20 year period considered. Figures
16 shows the distribution of unskilled and skilled workers across cities immediately after the immigration shock and 20 years after the shock. The left panel shows
the change in the distribution of unskilled workers. Again, cities on the horizontal axis are ordered by the size of the immigrant inflow as a fraction of their unskilled
population. As a result of the immigration inflow, all cities experience an increase in their unskilled population. The two most heavily affected cities, Miami and Los
Angeles, both experience over a 20% increase in the size of their unskilled immigrant population. 20 years later, the change in unskilled population in cities which
received large immigrant inflows has decreased by roughly half as unskilled workers migrate away from these cities. The right panel of 16 shows the distribution of
skilled immigrants across cities over time. The immigration shock increases the proportion of skilled workers in cities which receive the most immigrants. However
the magnitude is quite small—20 years after the shock, the skilled worker population in the most affected cities has increased by less than .5%.
 --H1B
H1-B visas decrease wages and employment for native workers- particularly bad in the
IT sector
Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School, 16 (George, “High-
Skill Immigration: The H-1B Program”, LaborEcon, 3-10-16, https://gborjas.org/2016/03/10/high-skill-
immigration-the-h-1b-program/, accessed on 7-10-18, JM)

Finally, as I was preparing this post earlier in the week, John Bound sent me a new paper (coauthored
with Gaurav Khanna and Nicolas Morales) entitled “Understanding the Economic Impact of the H-1B
Program on the U.S.” This is one of the most thoughtful studies I have ever read on the H-1B program.
The authors construct a (very technical) model of the economy that addresses the impact on workers,
consumers, and firms, while avoiding the conceptual problems and empirical issues that plague most of
the non-experimental work. This is how Bound, Khanna, an0d Morales summarize their findings: [H-1B
immigrants] increased the overall welfare of US natives, and had significant distributional consequences.
In the absence of immigration, wages for US computer scientists would have been 2.6% to 5.1% higher
and employment in computer science for US workers would have been 6.1% to 10.8% higher in 2001. On
the other hand, complements in production benefited substantially from immigration…Firms in the IT
sector also earned substantially higher profits. The H-1B program inevitably created winners and losers,
and the losers were the native high-tech workers. And I should emphasize that “native” really means
pre-existing–as many of the pre-existing high-tech workers were probably born abroad.
 2NC I/L-Low Labor Supply Key to Wages
Wages are specifically increasing for poor workers because of availability of low-skill
jobs, creating a baseline for broad economic growth—Increasing labor supply
collapses that
Thompson 17 (Mark, “The Most Underrated Story About the U.S. Economy”, March 9th, 2017, The
Atlantic, https://www.theatlantic.com/business/archive/2017/03/wages-rising/519114/) MJG
For decades, the story was simple: The gap between the rich and the poor grew ever-wider as incomes increased faster at the top than the bottom. The story was
true, too. Wages have been rising faster for the top 5 percent than for the bottom 20 percent almost every
year this century. But in a remarkable reversal, annual wage growth has been greater (as a percent) for
the poor than for the rich in the last few years. A new report by the left-leaning Economic Policy Institute found that wages grew
faster in 2016 for the poorest quintile than for the richest. The trend was particularly pronounced for
white workers. The poorest 10 percent of white workers collectively saw a 5.1 percent raise in 2016, twice
as faster as the 2 percent growth among the richest decile percent. This good news isn’t just an artifact of a single think tank’s artisanal number crunching. The

Atlanta Fed has also found that the three-month moving average of wage growth reached a post-
recession high in November 2016. Non-white incomes have recently been growing faster than whites’, reversing yet another post-recession
trend. And this might be the most surprising detail of all: Wages for high-school graduates are growing as fast as those for

college grads for the first time since 1998, when the Atlanta Fed’s dataset begins. MORE STORIES Say Hello to Full
Employment ANNIE LOWREY Code Now. Pay Tuition Later. LINDSAY GELLMAN A worker sweeping the ground in front of skyscrapers Forced Labor Is the Backbone
of the World’s Electronics Industry ARIEL RAMCHANDANI Is This the End of Public-Sector Unions in America? ALANA SEMUELS Why is this finally happening? The
answer involves a fortuitous mix of policy changes and ongoing economic growth. “ The
two leading factors are the tightening labor
market and the state-level minimum wage increases,” said Elise Gould, a senior economist at the left-
leaning Economic Policy Institute. Labor protests like the Fight for $15 movement contributed to minimum-wage increases in several states and
cities. The impact has been obvious: Wages for the poorest 10 percent grew two-times faster in states with minimum-wage increases. Minimum-Wage Increases
Spurred Wage Growth for Americans Earning in the 10th Percentile ECONOMIC POLICY INSTITUTE But wage growth for the poor ticked up even in states without
minimum-wage hikes. That’s because a falling unemployment rate is especially critical for pushing up wage growth for
the poor. With each percentage-point fall in unemployment, it’s the bottom decile that sees the most
wage growth. There are some easy lessons here. First, low unemployment is a low-income worker’s best
friend. Second, in the last two years, minimum-wage hikes raised income for the poor without, it seems, destroying jobs or raising the unemployment rate.
Third, the U.S. economy seems capable of producing broadly shared income growth, at least late into a

recovery cycle, despite the many well-founded fears that rich, educated workers are leaving their
poorer, less-educated peers in the dust. What nobody can say, however, is whether this happy trend is durable. Will a recession strike and wipe
out these gains for the poor? Will minimum-wage increases prove to be a one-off moment of income growth for the poor? Will higher wages for low-skill workers
ultimately accelerate the automation of their jobs, since employers get more labor savings from replacing an expensive job than a cheap one? Nobody knows. But
for now, wage growth for the poor is the happiest story nobody is talking about.

Tight labor market key – limiting the supply is what’s driving wage and spending
growth now
Clarida 16 Richard Clarida, April 2016, PIMCO, “Wages Are Rising: Good News for Workers, the
Economy… and the Fed”, https://www.pimco.com/en-us/insights/economic-and-market-
commentary/global-central-bank-focus/wages-are-rising-good-news-for-workers-the-economy-and-the-
fed/

“Much commentary and public concern have focused on the evident trend decline in the share of U.S.
national income flowing to labor (and the corresponding trend rise in the share of U.S. national income
flowing to capital). … While it is too soon to tell if the current expansion will – like prior expansions –
feature a rise in labor’s share back toward the historical average, there is some evidence of an
acceleration in wages that is beginning to emerge in tandem with the ongoing decline in the
unemployment rate. If and when labor’s share of national income and wages rises and unemployment
continues to fall, what will be the implications for inflation and, in turn, the Fed?”

Since I wrote that in the summer of 2014, labor’s share of national income has increased materially in
tandem with the much more widely discussed decline in the unemployment rate. As of Q4 2015, it
stands just north of 67%, reaching a share last observed (on the upswing) in December 2006 – see Figure
3.
Note that this pattern of a mid-cycle rebound in labor’s share of national income is typical of past U.S. recoveries. In the three
expansions during the “Great Moderation” – the quarter-century after Paul Volcker broke the back of inflation – labor’s share
of income initially fell during the early days of recovery and then began to rebound during the expansion phase of the business
cycle. Importantly, this rise in labor’s share occurred before, and usually well before, the business cycle peak and continued as
the economy fell into recession. The rise in labor’s share that occurs during recessions is well-known and is usually attributed to
the desire of firms to “hoard” labor initially in downturns as sales decline – holding off on firing workers until the decline in
demand is clearly expected to persist. What is less appreciated is the phenomenon of labor’s rising share of
income well in advance of the peak in economic activity and for reasons unrelated to labor hoarding.

Key takeaways for investors and Fed watchers

Although it took a while to kick in, it does appear that this recovery from the Great Recession of 2007-–
2009 has returned to the pattern of past cycles in which labor’s share of the pie begins to rise – and of
course capital’s profit share of national income begins to decline.

These facts are worth remembering the next time you see financial news anchors bemoaning sluggish
gains in corporate earnings. Especially in a low productivity growth world, gains in labor’s share will
come, at least to some extent, out of profit growth. The extent to which this happens will depend upon
how much of the higher labor cost bill is passed through to prices.
 2NC I/L-Wages Key to Spending/Econ
Current growth of wages is key to the Economy – consumer spending and home
refinancing
Stilwell 15 (Victoria, “Wages Haven’t Been This Crucial to U.S. Economy in Half Century”, Bloomberg,
March 20th, 2015, https://www.bloomberg.com/news/articles/2015-03-20/wages-haven-t-been-this-
crucial-to-u-s-economy-in-half-century) MJG

When it comes to U.S. economic growth, wages may never have been this important. The link between
earnings and consumer spending has been tighter in this expansion than in any other since records
began in the 1960s. Wages have become even more critical as households, still shaken after being
caught with too much debt when the recession hit, remain unwilling or unable to tap home equity or let
credit-card balances balloon to buy that new television or dishwasher. By not overextending themselves again,
Americans are only spending as much as their incomes will allow, meaning that 70 percent of the
economy is riding on how fast pay rises. “In an environment where credit is not being used in a material way, the fate of wages
matters,” Porcelli said. “They’re doing all of the driving from a consumption perspective.” The correlation between growth in wages
and consumer spending adjusted for inflation stands at 0.93 since June 2009, when the recovery began, according to Porcelli. A
reading of 1 means they move in the same direction all the time, zero means there is little relationship and minus 1 means they continually diverge. Porcelli tracked
wages through the index of aggregate weekly payrolls for private production workers, which takes into account hourly earnings, the length of the workweek and
changes in employment for about 80 percent of the labor force. Records go back to 1964, longer than the measure for all employees that includes supervisors,
which dates back only to 2006. Yellen’s View
The outlook for earnings is among the things that will help policy makers
decide when to raise interest rates, Federal Reserve Chair Janet Yellen said Wednesday. The labor market has
improved enough for central bank officials to prepare to exit the most aggressive easing in the central bank’s 100-year history, though too-low inflation and weak
pay gains are reasons for caution. “We will be looking at wage growth,” Yellen said during a press conference
following the central bank’s announcement that it was leaving its benchmark rate near zero. While faster
increases in income aren’t a precondition for raising rates, “that would be at least a symptom that inflation would likely move up over time,” she said. Fed

policy makers reduced their forecasts for how quickly they will raise interest rates this year and next and
also lowered the projected rate of economic growth. ‘Residual Effects’ One reason why officials will be slow to increase borrowing
costs is “the residual effects of the financial crisis, which are likely to continue to constrain spending and credit availability for some time,” Yellen said in their press
conference. Six years into the U.S. economic expansion, Americans are still shying away from credit. As of the fourth quarter, total household indebtedness was
$11.83 trillion, up 1 percent from the previous three months, according to data from the Federal Reserve Bank of New York. That remains short of the record $12.7
trillion reached in the third quarter of 2008. Credit-card balances totaled $700 billion in the fourth quarter, little changed from the average of $703 billion for the
economic expansion. “I have been impressed with how reluctant consumers are to increase their debt on especially credit cards,” Richard Curtin, director of the
University of Michigan Survey of Consumers, said on a conference call last week. “I wouldn’t expect a sharp increase in credit-card debt, and that’s going to limit
spending at the retail level.” Sentiment Subdued Last week’s report showed the University of Michigan’s preliminary consumer sentiment reading for this month
dropped as home-heating bills came due following the plunge in temperatures during February. Shaka Asuma, 45, of Waldorf, Maryland, is among those shunning
debt. He doesn’t have any credit cards, and depends solely on his income to drive purchases. “I try to spend within my means,” said Asuma, who works in facilities
at a law firm in Washington. Most of his salary goes toward paying for transportation to work, groceries and bills. If anything is left over, he might splurge on a game
for his Microsoft Corp. Xbox console, Asuma said. “I don’t like owing money,” said Asuma. “I didn’t want to get a credit card just because I didn’t want to put myself
in a predicament where I was tempted.” Home Refinancing Another reason wages are key to the outlook is that
homeowners are reluctant to use home equity to boost spending. An estimated $6.7 billion was taken
out during refinancing of conventional prime mortgages in the fourth quarter, down from $7.6 billion in the previous three months,
according to figures from McLean, Virginia-based Freddie Mac. Adjusted for inflation, so-called cash-out home refinancing reached a peak

of $99 billion in the second quarter of 2006. The amount of debt outstanding equaled a little more than total disposable income in the
fourth quarter, the smallest ratio since 2002, according to data compiled by Bloomberg. The smaller debt loads are, on balance, an advantage when compared to
the excesses that sparked the financial crisis, said Dana Saporta, a U.S. economist at Credit Suisse Securities USA in New York. “Conditions are certainly a lot
healthier and seem a lot more normal now.” One offshoot of the recession -- increased oversight of the consumer-credit industry -- probably means the wage-

spending relationship will be strong for years, said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania.
Less Plastic The establishment of the Consumer Financial Protection Bureau and laws aimed at fostering fairness and transparency, including the Credit CARD Act of
2009 designed to help Americans understand how much they are paying in fees and interest, will probably limit the use of plastic, he said. “People’s attitudes
toward credit are different given what they went through” in the recession, Zandi said. Consumer spending’s dependence on wages shouldn’t blight the outlook for
a pickup in growth, as some earnings measures are accelerating, RBC’s Porcelli said. The employment cost index has shown a pickup in pay and the National
Federation of Independent Business’s survey has reflected an increase in planned compensation. And Porcelli’s preferred wage index --
aggregate weekly payrolls -- climbed 5 percent in the 12 months through December, the best annual
showing since 2006 and up from a 4 percent gain in 2013. It rose 5.7 percent a year on average from
2004 through 2007. Hourly Earnings Those contrast with the trend in the widely watched average hourly earnings data from the Labor Department’s
monthly jobs report, which has been mostly steady. Wages climbed 2 percent in the year ended February, matching the

average for the recovery. Porcelli recently raised his forecast for consumer spending even as readings on retail sales have declined for the past three
months. He projects consumption will climb 3 percent in 2015, up from the 2.3 percent he estimated in December. Expenditures rose 2.5 percent in 2014. The

recent wage data “are very supportive of this call,” Porcelli said.

Low wage jobs lead to slow economic recovery—limits consumer spending

Appelbaum 12 Eileen Appelbaum, April 10th, 2012, U.S. News and World Report, “Low-Wage Jobs to
Blame for Slow Economic Recovery”, https://www.usnews.com/opinion/blogs/economic-
intelligence/2012/04/10/job-polarization-not-to-blame-for-slow-economic-recovery

Looking at the nature of job growth as economic recovery took hold, the National Employment Law
Project found that lower-wage occupations—retail sales persons, office clerks, food prep workers, and
stock clerks topped this list—grew by 3.2 percent from the first quarter of 2010 through the first quarter
of 2011, and mid-wage occupations grew by 1.2 percent, while higher-wage occupations declined by 1.2
percent. Occupational projections to 2020 tell a similar story. The Bureau of Labor Statistics projects that five of the top six
occupations with the most job growth from 2010 to 2020 will be low-wage jobs that require little or no post-high school
education—retail sales persons, home health aides, home care aides, office clerks general, and food prep and serving workers.
Personal care aides and home health aides are also the two fastest growing occupations according to these projections.

Thus the job polarization of the 1990s has been replaced in the last dozen years by job growth that is
dominated by occupations in the bottom tier of the skill and wage distributions. This trend is likely to
continue in the absence of policies that increase demand more broadly in the economy and that
improve wages and working conditions for the millions of workers—mainly women—in the occupations
that are growing. Low wages in the expanding occupations limit gains in consumer spending and
hamper more robust job growth.
 2NC I/L-Consumer Spending Key Econ
Consumer spending is particularly important at this time in the business cycle – it’s the
lynchpin of the current recovery and overall economy
Emmons 17
Will R. Emmons, Housing and Consumer Spending Are Powering the Economy like Never Before,
September 6, 2017, https://www.stlouisfed.org/publications/housing-market-perspectives/issue-6-sept-
2017/housing-consumer-spending-power-economy

Despite its length, the current expansion has been weak, ranking ninth among the 10 post-WWII
business cycles.1 Only the previous cycle, ending in the second quarter of 2009, was weaker. That cycle
was dominated by the housing boom and bust and culminated in the Great Recession. As Table 1 shows,
the average rate of economic growth beginning in 2002 has been far below that in all of the other
business cycles listed.

Table 2 shows that the composition of economic growth also has changed in recent decades, generally
shifting in favor of housing and consumer spending.2 Only during the brief 1958-61 cycle did residential
investment—which includes both the construction of new housing units and the renovation of existing
units—contribute proportionally more to the economy’s growth than it has during the current cycle.
Perhaps surprisingly, homebuilding subtracted significantly from economic growth during the previous
business cycle even though the period included the housing bubble. The crash in residential investment
was so severe between the fourth quarter of 2005 and the second quarter of 2009 that it erased all of
housing investment’s previous growth contributions.3

Personal consumption expenditures (i.e., consumer spending) also have been very important in recent
cycles. Consumer spending has contributed 74.9 percent of overall economic growth during this cycle
so far, a share exceeded in only two other cycles. Not surprisingly, strong residential investment and
strong consumer spending tend to coincide when households are doing well.4

The combination of weak overall GDP growth and strong contributions by both residential investment
and consumer spending mark the defining characteristic of the current business cycle: Household-
related spending is driving the economy like never before. Fully five-sixths, or 83 percent, of total
growth since the economy began to recover in 2009 has been fueled by household spending. Hence, the
continuation of the current expansion may depend largely on the strength of U.S. households.

And that’s determined by income growth—growth is steady but slow now—any

disruption triggers massive recession
Rhame 10/25 Laura Rhame, 10/25/17, FS Investments, “The Chilling Prospect of Cooling Consuption”
https://www.fsinvestments.com/perspectives/articles/consumer-driving-us-economy-slow-down

Conspicuous consumer
Before we dig into the cause of slowing consumption, let’s revisit the importance of the consumer to the
U.S. economy. Since World War II, every time consumption has contracted on a year-over-year basis, the
economy has gone into recession. Given the impact of consumer spending, even a slowdown in the
pace of consumption has significant implications for the economy.

So far, the consumer has been capably pushing our economy forward, offsetting weakness in other
sectors like government spending or business investment. However, during this expansion, income
growth has been weak and increasingly threatens to undermine the dependable consumer. This is
critical, because outside of income, households have only limited options when it comes to funding
consumption, including taking on new debt or dipping into existing savings. While consumer debt levels
have been rising, low interest rates are keeping monthly payments in check. Here, we focus primarily on
trends in income and savings.2
Earnings income: Earnings income has been severely challenged throughout this expansion. Average hourly earnings have
grown only 2.2% during this expansion, significantly below earnings growth in the prior three expansions.3 Other measures of
income, like personal disposable income, showed a solid recovery in 2014 only to enter a renewed slump. In August,
Translation: consumers
consumption expenditures grew 3.9% y/y, yet personal disposable income grew just 2.7% y/y.
spent more than they earned. Consumers likely funded the shortfall in two primary ways – by going into
debt or dipping into savings.
Savings: When income growth stagnates, consumers either need to cut back spending or dip into savings. The second chart
shows that consumers have chosen the latter. Since mid-2016, the savings rate has plunged to just 3.6% in August.4 Comparing
the savings rate now with past expansions shows lows in line with the late 1990s, when consumers were comfortable drawing
down their savings as the tech bubble pushed equity prices to stratospheric valuations. In the expansion of the 2000s, when
leverage was widely available, consumers were able to draw down their savings even further, hitting a low of around 2.0%.
Partly due to regulatory changes in the financial industry, most economists do not expect consumer lending or leverage to
become so widely available again during this expansion to enable a return to a 2.0% savings rate.

When confidence isn’t enough

Growth of our entire economy remains heavily dependent on consumer spending. Going forward,
unless wages pick up meaningfully, consumers may have little room on their household balance sheet
to finance future consumption. Consumer confidence is an important leading indicator of consumption,
but in the end, spending growth is really mostly dependent on income growth. Without faster income
growth, consumption could cool from current levels.

The prospect of a possible slowdown in consumer spending comes at an uncomfortable time for the U.S.
economy as a whole. Growth has been sluggish during this expansion, and business investment, in
particular, has struggled to gain sustained traction and push growth higher. The economy is already
stuck in a low-growth rut, a challenging fundamental reality for investors. If the economy downshifts
further, then equity markets would look increasingly overstretched from underlying economic
fundamentals.
 Ext-AT: Consumer Spending Not Key
Decline of consumer spending causes a recession – policy change that causes job loss
or attitude shifts risk decline.
Conerly 1/3
Bill Conerly, senior fellow at the National Center for Policy Analysis, chairman of the board of Cascade
Policy Institute, longest-tenured member of the Oregon Governor’s Council of Economic Advisors, Econ
PhD-Duke, What Could Go Wrong With The Economic Forecast In 2018?, January 3, 2018,
https://www.forbes.com/sites/billconerly/2018/01/03/what-could-go-wrong-with-the-economic-
forecast-in-2018/#7d80a69d2e32

The more likely cause of a downturn this year is a sharp cutback by consumers. I cautioned in my
earlier consumer spending forecast that growth of spending is significantly greater than growth of
incomes. There are always grumpy people complaining that others are spending beyond their means,
but the aggregate data don’t support that hypothesis. However, over the course of 2017 the savings rate
has dropped as consumers’ lower income growth did not trigger slower spending growth. And note this
discussion is about growth rates, not the actual level of spending. I think it’s likely consumers will cut
back a little, with a risk that they cut back a lot. The usual trigger of spending reductions is loss of
jobs—not happening lately, and not going to happen unless something else is the cause. Consumers
might also cut back on spending if interest rates rise sharply, though that does not seem likely. Attitudes
might turn negative, if there were some precipitating factor—but what could that be? Consumers
have watched the country’s politics turn increasingly acrimonious, have watched a hugely divisive
president, and have seen Oklahoma lose the Rose Bowl, and yet all the recent indicators of attitudes
remain elevated.

Liquidity shocks outweigh – the impact’s unique, can only go one way, and causes a
repeat of ‘08
Bacchetta 15
Philippe Bacchetta, Swiss Finance Institute professor of macroeconomics, University of Lausanne, What
kind of financial shocks caused the Great Recession?, 19 Feb 2015

The financial turmoil experienced over the last decade has led to a renewed interest in the effect of
financial disturbances on the real economy. A growing body of literature documents how financial
shocks can impulse business cycle movements, while it was commonly accepted that financial frictions
mostly amplify cycles (e.g. Jermann and Quadrini 2012, or Christiano et al. 2014). These shocks emerge
from the financial sector and can take several forms, such as debt, risk, or stock price shocks. In a recent
paper (Bacchetta et al. 2014), we argue that the evolution of corporate cash reserves can potentially
shed some light on the nature of financial shocks. Corporate cash and employment It is interesting to
observe that in the US employment comoves negatively with the corporate cash ratio, measured as the
share of liquid assets in total assets. Figure 1 shows that this negative relationship is particularly striking
for the Great Recession, since the corporate liquidity ratio experienced a large boom from 2009 while
employment has been strongly depressed. Figure 1. Corporate liquidity and employment Notes: The
cash ratio, measured as the share of corporate liquidity in total assets, is built from the US Flow of Funds
(non-farm non-financial corporate sector). We define liquidity as the sum of private foreign deposits,
checkable deposits and currency, total time and savings deposits, and money market mutual fund
shares. Corporate employment in logarithm is drawn from the Bureau of Labor Statistics. Both quarterly
variables are Hodrick–Prescott filtered. However, this negative correlation is not specific to the recent
financial crisis since the contemporaneous correlation between the two variables is significantly
negative (-0.41) over the sample 1980Q1–2011Q4. Interestingly, this negative correlation also holds at a
disaggregated level. Using firm-level data from Compustat, we show that the annual cross-firm
correlation between employment and the cash ratio is on average -0.29 over the same period. What
does the comovement mean? This negative relationship between the corporate cash ratio and
employment may at first appear surprising and raises several questions. To what extent are firms’ cash
and employment decisions related? Can decisions on cash reserves provide information on the financial
constraints faced by firms? We argue that the distinction between liquidity and credit shocks is a
primary step to address these questions. The so-called credit shock usually refers to changes in long-
term (or less liquid) borrowing. However, firms’ operations are also affected by short-term liquidity. A
negative liquidity shock can thus be interpreted as a shortage of short-term borrowing such as credit
lines or trade credits, or other forms of external liquidity like trade receivables to customers, or other
types of payments. On the one hand, cash management decisions are partly driven by a tightening in
financing conditions, especially those affecting the availability of external liquid funds. On the other
hand, cash holding is related to employment, simply because liquid assets facilitate the firm’s ability to
pay for the wage bill. Based on these facts, liquidity shocks can explain a negative correlation between
the corporate cash ratio and employment. This underlies the crucial role played by the tightening of
liquidity conditions in the aftermath of the Lehman crisis. While no initial sharp reduction in credit
supply was observed at the onset of the recent financial crisis, firms experienced a significant
deterioration in their expected liquidity conditions. Gilchrist and Zakrajsek (2012) also argue that banks
cut the existing corporate lines of credit during the crisis. Firms’ liquidity shocks in a macroeconomic
model The optimal choice of corporate liquidity is rarely introduced in macroeconomic models, even in
models with financial frictions. Liquid assets are usually held by households, typically in the form of
money, to finance their consumption. However, firms also have liquidity needs. Papers incorporating
firms’ liquidity are typically in the spirit of Holmstrom and Tirole (2011) and Woodford (1990). The
theoretical framework built in Bacchetta et al. (2014) includes corporate cash holdings and employment.
It gives a subtle view of financial shocks, by disentangling the role of liquidity shocks and credit shocks.
This distinction is made possible by assuming that firms are credit constrained on both markets, namely
the markets for liquid and illiquid funds. Liquidity shocks appear to be crucial to explain the negative
relationship between these two variables. A reduction in external liquidity generates two effects. On the
one hand, lower liquidity reduces the financial opportunities of firms and depresses labour demand.
On the other hand, the reduction in external liquidity makes the production process more intensive in
cash to ensure that wages are fully financed. Firms’ assets are then tilted towards cash. Combining these
two effects implies that the cash ratio increases while employment declines. A credit shock also
tightens financial conditions and discourages employment. However, since it does not directly affect the
structure of the portfolio between internal and external liquidity, it barely affects the cash ratio.
Interestingly, the typical technology shock is not a good candidate to explain the negative relationship
between employment and the corporate cash ratio. Indeed, a decline in productivity improves firms’
ability to obtain short-term loans (through a positive collateral effect), which generates a slight
reduction in the cash ratio while employment is reduced. A natural exercise is to assess the relative
contribution of financial shocks (credit and liquidity shocks) to the business cycle. The theoretical model
can be used to recover credit, liquidity, and technology series over time, as shown in Figure 2. Figure 2.
TFP, credit, and external liquidity series liquidity Note: The TFP, credit, and liquidity series are computed
from the theoretical setup in Bacchetta et al. (2014). Liquidity and credit shocks are not correlated,
which suggests that they are of a different nature to one another. Interestingly, liquidity shocks
generate the bulk of short-term fluctuations, while credit shocks are more important in the medium
term. In addition, both financial shocks are more volatile than productivity. Our model predicts that the
Great Recession was mostly driven by financial shocks, i.e. liquidity and credit shocks, rather than a
technology shock. This latter result is in line with Jermann and Quadrini (2012) who construct a generic
financial shock. As shown in Figure 1, the negative comovement between cash and employment was
particularly pronounced during the financial crisis, confirming that liquidity shocks are key drivers of
the recession.1 There is also significant heterogeneity in firms’ cash behaviour. To capture the cross-firm
dimension, we assume that firms are hit by idiosyncratic productivity and liquidity shocks. The model is
parameterised using moments’ distribution from firm-level data. Despite its simplicity, the model
performs relatively well quantitatively in reproducing the negative cross-firm correlation between the
cash ratio and employment. Conclusion We stress a negative comovement between the corporate cash
ratio and employment which can be explained by (external) liquidity shocks. These shocks make
production less attractive or more difficult to finance, while they also generate a need for internal
liquidity necessary to pay wage bills, which can be satisfied by holding more cash. The combination of
long-term credit and liquidity shocks has substantially contributed to the Great Recession.

Maintaining increased Consumer spending key to economic growth

St. Louis Fed 17 (The St. Louis Fed On the Economy blog features relevant commentary, analysis,
research and data from our economists and other St. Louis Fed experts, “Household Spending Remains
Key to U.S. Economic Growth”, December 29th, 2017, https://www.stlouisfed.org/on-the-
economy/2017/december/household-spending-fuels-economic-growth) MJG

Household-related spending is driving the economy like never before, according to a recent Housing
Market Perspectives analysis. Since the U.S. economy began to recover in 2009, close to 83 percent of
total growth has been fueled by household spending, said William R. Emmons, lead economist with the St. Louis Fed’s Center for
Household Financial Stability. “Hence, the continuation of the current expansion may depend largely on the strength

of U.S. households,” noted Emmons. An Examination of the Current Expansion In July, the U.S. economic expansion entered its ninth year, and it should
soon become the third-longest growth period since WWII, Emmons said. He noted that it would become the longest post-WWII

recovery if it persists through the second quarter of 2020. However, the current expansion has been weak and ranks ninth among
the 10 post-WWII business cycles, as shown in the figure below.1 “Only the previous cycle, ending in the second quarter of 2009, was weaker,” he said. “That cycle
was dominated by the housing boom and bust and culminated in the Great Recession.” business cycles The Changing Composition of Economic Growth Emmons
noted that the composition of economic growth also has changed in recent decades and has generally shifted in favor of housing and consumer spending,2 as
shown in the figure below. GDP Growth “Only during the brief 1958-61 cycle did residential investment—which includes both the construction of new housing units
and the renovation of existing units—contribute proportionally more to the economy’s growth than it has during the current cycle,” Emmons said. He noted that,
perhaps surprisingly, homebuilding subtracted significantly from economic growth during the previous cycle even though it included the housing bubble. “The crash
in residential investment was so severe between the fourth quarter of 2005 and the second quarter of 2009 that it erased all of housing investment’s previous
growth contributions,” he said. He noted that residential investment typically subtracts from growth during recessions. Thus, its ultimate contribution to the current
cycle likely will be less than currently shown because the next recession will be included as part of the current cycle. At
the same time, he said,
personal consumption expenditures (i.e., consumer spending) also have been very important in recent
cycles. Emmons noted that consumer spending has contributed close to 75 percent of overall economic
growth during the current cycle. The share was higher in only two other cycles. “Not surprisingly, strong
residential investment and strong consumer spending tend to coincide when households are doing
well,” he said.
 Ext-AT: Consumer Spending Resil
Consumers drive economy but depends on strong wage growth
Rhame 10/25 Laura Rhame, 10/25/17, FS Investments, “The Chilling Prospect of Cooling Consuption”,
https://www.fsinvestments.com/perspectives/articles/consumer-driving-us-economy-slow-down

Consumers are the engine that drives our economy, making up 69% of U.S. economic activity. Although
playing their part with steady spending, consumers are increasingly drawing from savings rather than
wage increases to fuel this activity. Despite surging consumer confidence, sluggish wage growth may put
pressure on spending, and a slowdown would pull overall U.S. growth lower at a time when it is already
challenged. For investors, low growth could push equity valuations even further from economic
fundamentals.
 Ext-AT: Uncertainty/Confidence Crisis
Confidence not key to growth and economy is headed toward a recession now
Monica 17
(Paul R. La Monica is a digital correspondent at CNNMoney, “Consumer confidence soars under Trump.
Here's what it means”, CNN, March 29, 2017, http://money.cnn.com/2017/03/29/investing/consumer-
confidence-trump-economy/index.html)

Gallup noted that Republicans still have a healthier view of the economy than Democrats, but added
that "rank-and-file Republicans became significantly less confident in the economy last week."

If that trend continues, it will be interesting to see whether or not Republicans and Democrats alike
decide to actually pull back on plans to buy more things over the next few months. At the end of the
day, confidence doesn't power the economy. Shopping does.

"Consumers feel current economic conditions have improved over the recent period, and their renewed
optimism suggests the possibility of some upside to the prospects for economic growth in the coming
months," Franco added.

Some economists argue that the U.S. is due for a recession soon because we haven't had one in nearly
eight years. This has been a relatively long, albeit shallow, recovery.

Interestingly, and perhaps not surprisingly, the economy is also increasingly being viewed through
partisan lenses.

The University of Michigan addresses politics more directly in its consumer confidence reports.

And it noted earlier this month that based on its gauge of economic expectations, Democrats "signaled
that a deep recession was imminent" while Republicans felt that "a new era of robust economic growth
was ahead."

What's more, the most recent political infighting over health care appears to have dented confidence in
the economy among Republicans and Democrats.

Polling company Gallup said earlier this week that its latest U.S. Economic Confidence Index hit its
lowest level since the election -- largely due to the stock market's recent slide and the failure to repeal
and replace Obamacare.

It's also worth pointing out that the Conference Board's consumer confidence index surged right after
last November's election as well -- to the highest level since July 2007. The Great Recession began in
December of that year and lasted until June 2009.

All of this is not to say that the economy is about to enter another downturn just because the
notoriously late to the party consumer is suddenly feeling giddy.

It's understandable why there is suddenly more hope on Main Street these days.
While the Conference Board didn't mention President Trump by name, it would appear that average
Americans -- much like small business owners and CEOs -- are excited about the possibility of tax reform
and stimulus.

"Consumers' assessment of current business and labor market conditions improved considerably.
Consumers also expressed much greater optimism regarding the short-term outlook for business, jobs
and personal income prospects," said Lynn Franco, director of economic indicators at The Conference
Board, in a release.

The dot-com bubble's bursting was one factor that led to a recession that started in March 2001 and
lasted through November of that year. (That period, of course, included the immediate aftermath of the
9/11 terrorist attacks.)

And another closely watched measure of consumer confidence, The University of Michigan's Consumer
Sentiment Index, hit its highest level since 2000 earlier this month as well.

Consumers are suddenly a lot more confident about the economic future of the United States. That's a
good thing. But it's also worth noting that consumers don't always have a great track record when it
comes to predicting the financial future.

The Conference Board, an economic research firm, said Tuesday that its latest monthly survey of
consumer sentiment surged in March to the highest level since December 2000.

Note that date. December 2000. At that point in time, the stock market, particularly techs on the
Nasdaq, were in the midst of a massive plunge.
 2NC Unemployment DA
Immigrants drive oversupply of labor—depresses wages and triggers resentment and
mass native unemployment—the impact is the economy, wealth inequality, and
backlash
Corcoran 13
Edward Corcoran, LTC Edward Corcoran, USA-retired, Ph.D., serves as a Senior Fellow on national
security issues at GlobalSecurity.org. Ed ended his military career as a Strategic Analyst at the US Army
War College where he chaired studies for the Office of the Deputy Chief of Operations, Immigration,
Globalization and National Security, 2013, https://www.huffingtonpost.com/edward-
corcoran/immigration-globalization_b_3600776.html

Immigration is undermining America. For years, it was an American strength. The Statue of Liberty
proclaims: “Give me your tired, your poor, your huddled masses, yearning to breathe free, the wretched
refuse of your teeming shore, send these, the homeless, tempest-tost to me.” Persecuted Pilgrims,
starving Irishmen, war refugees, and millions of others came to America to seek a new life in a new land,
their dynamism propelling the new country into a position of global leadership. But now there is strong
opposition to immigration. How can it be that a nation created by immigrants is now rejecting
immigration? Tension is palpable in the two messages embodied in the border: KEEP OUT and HELP
WANTED. The American economy needs cheap labor - it has always had an underclass, often earlier
immigrants working themselves up into the Middle Class and being replaced by still newer immigrants.
So what has changed?? Two things have changed dramatically: the structure of the American working
force and the globalization of economic development. America no longer needs new workers, it needs
new work. There is an underlying concern over an aging population, where will the country get the
workers to support them? But reality is the opposite, there are too many workers. Thanks to
mechanization spurred by new technologies, essential production and services can be provided by only a
fraction of the work force. The resulting oversupply of labor has resulted in high unemployment rates
which do not even count long-term unemployed or people who have given up on finding work; nor do
they count the underemployed - people working well below their skill levels and often well below prior
salary levels. Excess workers are an inherent aspect of the current work structure. Nevertheless, even
with millions of Americans out of work, there is still a demand for cheap immigrant labor. And the basic
reason is simple: many of the jobs which immigrants are called upon to perform are not only physically
demanding, but they also fail to pay a living wage which could support even a modest American life
style. But wages these jobs do pay are still generally better than immigrants could earn in their country
of origin. What makes the situation so problematical is that this current immigrant underclass no longer
has prospects of working its way up into the Middle Class. The Middle Class itself is going downhill.
Many of its members are no longer or only barely able to earn a living wage. Poverty rates are steadily
rising. What is really broken is American wage scales. The presence of large numbers of out-of-work
Americans and undocumented immigrants significantly reduces pressure on employers to raise wages
when there are so many workers willing, even desperate, to take low-wage jobs while millions of
immigrants are willing to take even lower wage jobs. While it is true that integrating millions of
undocumented workers into the American economy would increase its size, much of the increase would
be due to meeting requirements of the immigrants themselves, requirements for goods, housing,
schools, roads, medical facilities. This helps meet an untenable need for continuing economic growth,
but the economy would only be larger, not more equitable. These wage pressures are not only active
at the low end of the wage spectrum. At the high end, American companies now hire well over
100,000 skilled immigrants yearly. The basic justification for this is that the companies cannot find
qualified Americans. So skilled immigrants take high paying jobs while newly graduated American
engineers, scientists, and technicians have trouble finding work. Part of this problem is some mismatch
between the job qualifications companies are looking to hire for and the specific qualifications of skilled
Americans. But part of it also is the willingness of skilled immigrants to work for salary and
reimbursement levels lower than available American workers. In addition, the brain drain of drawing
skilled workers from developing countries undermines the ability of these countries to develop their
own economies. Overall, immigrants provide downward pressures on American wages at both the low
and high end of the scale; excess workers undermine all wage levels. One result is the economic
stagnation of the Middle Class. The Ladder of Success is now broken, not only for new immigrants but
also for many native Americans. The current underclass is stuck in a subsistence position while millions
of others are left without prospects of improving their own lives. Wealth inequality is becoming a
central challenge of the American economy, eroding the cohesion of American society. Immigration
exacerbates it, helping to divide America increasingly into a two-tier society with millions of
frustrated and increasingly desperate individuals, naturally driving up violence, drug activity, gang
membership, and prison incarceration rates, already the highest in the world. Globalization is the
second major change, international economic competitiveness. One aspect is that the Industrialized
World in general and America in particular no longer enjoys privileged (i.e., cheap) access to energy, raw
materials, and agricultural goods. Global competition has driven prices up and availability down. While it
is not quite a flat world, an engineer in Moscow or a computer specialist in Mumbai or a designer in
Bangkok can compete directly with American workers, while low wage rates abroad attract
manufacturing facilities. Even if American companies do not move abroad, determined global
competition undermines their position. Although global wages and manufacturing costs are slowly
climbing, anything close to parity is a long way off and many American jobs will never come back. Many
governments fail to provide opportunities for their own citizens to earn a living wage and this is
ultimately what drives immigration into the Industrialized World. This is intensified in many cases by
natural riches, which tend to build and support corrupt upper classes at the expense of everyday
workers, and by environmental and safety deficiencies which also impact everyday workers. The
problem requires significant governance improvements in the developing world. But beyond these
challenges of raw materials, wage rates and local governance, globalization is bringing more
fundamental changes. There is an unprecedented strategic situation where no major nation faces a
direct threat of invasion or subjugation. Global competition is increasingly economic competition. China
as a rising power is increasingly seen as an American rival, but the Chinese and American economies are
now tightly intertwined, making cooperation more important than competition. This is particularly true
for China as leadership legitimacy now rests almost entirely on economic performance. Poor
economic performance would almost certainly push the leadership into a nationalistic and
confrontational stance, threatening stability on a world scale. Similarly, the prospects of a major war in
Europe are now negligible, but economic disintegration threatens stability there. What is now clear in
Europe is becoming clear everywhere: prosperity is no longer divisible. The Arab Spring was driven by
American values of freedom and the worth of the individual, but has been undermined by economic
shortcomings. Stability in Afghanistan remains elusive as military efforts proved inadequate and
economic development was badly neglected. Both Brazil and Turkey are now facing broad popular
discontent due to economic imbalances and a number of failed states continue to spread misery and
unrest. Immigration into the Industrial World is not an isolated problem but the symptom of a much
deeper challenge: promoting global prosperity. The Industrialized World cannot act as a safety valve
for the rest of the globe. Immigration is in fact an even larger problem in Europe which has no tradition
of integrating immigrants into the fabric of society. Instead, immigrants remain as economically
disadvantaged resident outsiders. While undermining cohesion in the Industrialized World,
immigration reduces pressure on developing nations to address their own economic challenges.

Independent of economy---A spike in unemployment triggers Trump lashout

Healy 17
Gene Healy, vice president at the Cato Institute and author of "The Cult of the Presidency: America’s
Dangerous Devotion to Executive Power, 100 Days In, Trump Has Already Learned The Seductions Of
Foreign War, APRIL 28, 2017, http://thefederalist.com/2017/04/28/100-days-trump-already-learned-
seductions-foreign-war/

With his major initiatives stymied by Congress and the courts, President Trump has begun griping about
the media holding him to “the ridiculous standard of the first 100 days.” The good news for Trump is he
can argue for an extension: according to some of America’s preeminent “thought leaders,” he wasn’t
really president until he hit Syria with 59 Tomahawk missiles on April 6. “The Trump administration can
truly be said to have started only now,” exulted neoconservative foreign policy guru Elliot Abrams the
day after the airstrikes. “Donald Trump became the president of the United States [last night],” echoed
CNN’s Fareed Zakaria. It was “a big moment,” “a kind of education of Donald Trump,” Zakaria gushed:
Trump “realized [that] presidents don’t need to go to a pesky Congress every time they want military
force.” As a practical matter, Zakaria is right: perversely, it’s in the use of military force—the area where
presidents are most dangerous—where they now have the freest hand. The president can’t unilaterally
pass a tax cut or a new health-care plan, but say the word, and the missiles will fly. When he’s
showered in media accolades for doing so, it can make the resort to force particularly seductive. With
tensions rising on the Korean Peninsula, the Trump team has signaled it may be ready to unleash
another barrage, if it can just get our errant “armada” into position. Asked last Monday whether the
president was “prepared to act alone” against North Korea, White House press secretary Sean Spicer
replied they’d make sure Congress is “notified,” but “I think he’s going to utilize the powers under
Article II of the Constitution.” Now that’s presidential! War Abroad Distracts Americans from Home Our
Constitution’s framers had a far narrower view of the president’s powers, and envisioned a broader role
for that “pesky Congress” in matters of war and peace. As James Madison put it in 1793, “In no part of
the constitution is more wisdom to be found, than in the clause which confides the question of war or
peace to the legislature, and not to the executive department”; were it otherwise, “the trust and the
temptation would be too great for any one man.” There’s a good deal of political-science evidence
suggesting that the “temptation” Madison warned about is real. The “rally effect, “for “rally round the
flag,” describes the popularity boost presidents derive from international conflict: “Scholars have
repeatedly found short-lived spikes in US presidential approval following US uses of military force.” The
“diversionary war” hypothesis—the scholarly moniker for “Wag the Dog”—proposes that beleaguered
presidents may seek to distract the public by waging war abroad. Here, the evidence is more mixed. But
various studies have found that presidents are more likely to use force during periods of economic
stagnation, or high unemployment, and that “presidents resort to the sword more quickly when their
approval ratings decline.” Some presidents may be particularly susceptible to temptation: “More
conceptually simple leaders—particularly when high in distrust, a trait linked to more hawkish policy
inclinations—are significantly more likely to engage in diversion.” The Media Love War. Middle
America, Not So Much Whatever motivated Trump’s Syria strike, it seems to have given his dismal
approval ratings a nudge. Moreover, judging by the chorus of approval from American “opinion
leaders,” the president may have to rethink his view that the press is the “enemy of the American
people.” On Syria, media elites proved themselves far more likely to “rally round the flag” than will
guys in trucker hats. The “failing New York Times” greeted the airstrikes with the headline “On Syria
Attack, Trump’s Heart Came First.” He “did the right thing” was the common refrain from former critics,
like the Times’ Nicholas Kristof, the humanitarian hawk Anne-Marie Slaughter, and neoconservative
#NeverTrump-er Bret Stephens. It’s no surprise that, as a senior White House official told the
Washington Post’s David Ignatius, “The decision to strike a Syrian air base was a confidence builder for
an inexperienced and sometimes fractious White House.” After all, “Trump couldn’t be sure when he
launched the attack that a Russian wouldn’t be killed, or that some other freak mishap wouldn’t arise.”
We managed to dodge the worst-case scenarios, but new dangers lie ahead. As Madison warned: in war,
“laurels are to be gathered, and it is the executive brow they are to encircle. The strongest passions and
most dangerous weaknesses of the human breast; ambition, avarice, vanity, the honourable or venial
love of fame, are all in conspiracy against the desire and duty of peace.” Two centuries later, our
political culture has degraded to the point where it encourages the worst presidential temptations—and
we’ve made waging war nearly as easy as firing off a tweet. If, per Fareed Zakaria, we’re witnessing the
“education of Donald Trump,” what lessons is he being taught?

Best studies prove jobs are the key variable---deterrence doesn’t check
Howell 7
William G. Howell, Sydney Stein Professor in American Politics at the University of Chicago Harris School
of Public Policy and a professor in the Department of Political Science and the College, Jon C. Pevehouse,
While Dangers Gather: Congressional Checks on Presidential War Powers, p. 107, 2007

*Italics in original

The estimates associated with some of our control variables differ markedly from those previously
observed . Strikingly. Public Approval is now highly significant and negative,, suggesting that higher
approval ratings lead to longer response times.. It is odd that congressional support would hasten a
military response, while public support would appear to delay it. The finding, though, is consonant with
claims about diversionary war—that is, that heads of states occasionally use military force in order to
mute public criticisms about domestic problems.. Here. we find that presidents resort to the sword
more quickly when their approval ratings decline.62
Additionally, we find that Unemployment, Election Year and World Disputes all significantly influence
the timing of responses. Presidents appear much quicker on the draw when unemployment figures
mount and when they, or their successors, are facing an election; presidents tend to stall when other
world events compete for their attention. Though Major Power continues to register null results,
Democracy now appears as a powerful predictor in these event history models. Presidents, we find, take
considerably longer when responding militarily to opportunities in democracies than to those in
nondemocracies. Drawing on the logic of the democratic peace, this result makes sense, as democracies
are more likely to resolve their conflicts through peaceful methods.

Goes nuclear
Street 16
Tim Street, Senior Programme Officer on the Sustainable Security programme at Oxford Research Group
and has worked for many years on the politics of nuclear disarmament and the arms trade, President
Trump: Successor to the Nuclear Throne, 30 November 2016,
http://www.oxfordresearchgroup.org.uk/publications/briefing_papers_and_reports/president_trump_s
uccessor_nuclear_throne

Donald Trump’s arrival in the White House as US President has deeply unnerved people from across the
political spectrum, both inside the US and around the world. The fact that many regard Trump as an
indecent individual and his government as potentially the number one threat to their dignity, liberty and
life means that the civil strife already raging in the US is unlikely to fade away soon. The wide-ranging
implications of Trump’s election to the most powerful office on Earth—for the peace and stability of
both that nation and the world—cannot be emphasised enough. In this regard, of the many
uncertainties and worries brought on by a Trump presidency, the two existential questions of climate
change and nuclear war stand out. With the former, Trump’s recent comment that he now has an ‘open
mind’ about the importance of the Paris climate agreement—having previously said climate change is a
‘hoax’—is unlikely to assuage fears that he will seek to dramatically expand the US’s extraction and
reliance on fossil fuels. With the latter, strong doubts have been raised over whether the new President
is capable of responsibly handling the incredible power that will be at his fingertips. Moreover, several
commentators are already raising concerns that a Trump administration will pursue policies that will
aggravate and disappoint his supporters, a situation that could increase the possibility of the US
engaging in a ‘diversionary’ war. In order to consider what we can expect from a Trump presidency, as
well as noting whom Trump empowers as members of his cabinet and those whom he draws on for
advice, it is vital to study the track record of recent administrations and appreciate the powers Trump
will inherit. In doing so this briefing focuses on the question of what a Trump presidency might mean for
international relations with a focus on nuclear arms, including doctrine and disarmament. This means
reviewing policies relevant to the US’s nuclear arsenal and pressing international challenges such as
non-proliferation, including in East Asia and the Middle East, as well as the US’s relationship with Russia
and its role in NATO. The power and responsibilities of the nuclear monarch The US President is solely
responsible for the decision to use the near-unimaginably destructive power of the nation’s nuclear
arsenal. Thus, as Bruce Blair—a former intercontinental ballistic missile launch control officer—makes
clear, ‘Trump will have the sole authority to launch nuclear weapons whenever he chooses with a single
phone call.’ The wider political meaning of the bomb for the world is aptly summarised by Daniel
Deudney, who describes nuclear weapons as ‘intrinsically despotic’ so that they have created ‘nuclear
monarchies’ in all nuclear-armed states. Deudney identifies three related reasons for this development:
‘the speed of nuclear use decisions; the concentration of nuclear use decision into the hands of one
individual; and the lack of accountability stemming from the inability of affected groups to have their
interests represented at the moment of nuclear use’. Similarly, Elaine Scarry has explained in stark terms
in her 2014 book Thermonuclear Monarchy: Choosing between Democracy and Doom, how the
possession of nuclear weapons has converted the US government into ‘a monarchic form of rule that
places all defense in the executive branch of government’ leaving the population ‘incapacitated’. In
response to this situation, Scarry argues that the American people must use the Constitution as a tool to
dismantle the US nuclear weapons system, thereby revitalising democratic participation and control
over decision-making. Scarry also outlines the incredible might the president wields, with each of the
US’s fourteen nuclear-armed submarines alone carrying ‘enough power to destroy the people of an
entire continent’, equivalent to ‘eight times the full-blast power expended by Allied and Axis countries in
World War II’. Nuclear specialist Hans Kristensen has described how the US’s strategic nuclear war plan
‘if unleashed in its full capacity’ could ‘kill hundreds of millions of people, devastate entire nations, and
cause climatic effects on a global scale’. This war plan consists of a ‘family of plans’ that is aimed at ‘six
potential adversaries’ whose identities are kept secret. Kristensen understands that they include
‘potentially hostile countries with nuclear, chemical, and biological weapons (WMD)’, meaning China,
North Korea, Iran, Russia and Syria as well as a terrorist group backed by a state that has conducted a
catastrophic WMD attack. The ‘dominant mission’ for US nuclear weapons within these plans is termed
counterforce, meaning strikes on ‘military, mostly nuclear, targets and the enemy’s leadership’. Despite
these plans, the US’s nuclear arsenal is often described by mainstream commentators as being solely
intended to ensure mutual assured destruction (MAD), i.e. as part of the ‘balance of terror’ with Russia,
in order to prevent armed conflict between the two nations and to ensure a response in kind to a
surprise nuclear attack. However, as Joseph Gerson and John Feffer explain, rather than deterrence just
being about enough nuclear forces surviving a surprise first strike attack to ensure MAD, US military
planners have also understood it to mean ‘preventing other nations from taking “courses of action” that
are inimical to US interests’. David McDonough thus describes the ‘long-standing goal of American
nuclear war-planners’ as being the achievement of the ability to launch a disarming first-strike against
an opponent- otherwise known as nuclear superiority. This has been magnified in recent years as the US
seeks to ‘prevent’ or ‘rollback’ the ability of weaker states—both nuclear and non-nuclear powers—to
establish or maintain a deterrence relationship. Taking all this into account, the new commander-in-
chief’s apparently volatile temperament thus raises deep concerns since his finger will be on the nuclear
trigger as soon as he assumes office on 20th January 2017. Given his past experience, Bruce Blair’s statement that he is ‘scared to death’ by the idea of a Trump presidency is but one further reason why urgent discussion and action, both in the US and globally, on lessening nuclear dangers—and reviving

disarmament—is vital. A recent report by the Ploughshares Fund on how the US can reduce its nuclear spending, reform its nuclear posture and restrain its nuclear war plans should thus be required reading in Washington. However, as t he Economist has rightly noted, ‘It is not Mr Trump’s fault that the system, in which the vulnerable land-based missile force is kept on hair-trigger alert, is widely held to be inherently dangerous’ since, as they point out, ‘no former president, including Barack Obama, has done anything to change it.’ Over sixty years after the nuclear attacks
on Hiroshima and Nagasaki, nuclearism thus remains very much embedded in the nation’s strategic thinking. Yet the election of Obama, and the rhetoric of his 2009 Prague speech, in which he stated ‘America's commitment to seek the peace and security of a world without nuclear weapons’ led many to think that a real change was on the cards. Obama’s visit to Hiroshima earlier this year to commemorate the bombings was thus a painful reminder of how wide the gap is between the rearmament programmes that the US and other nuclear weapon states are engaged in
and the disarmament action that they are legally obliged to pursue under the nuclear non-proliferation treaty (NPT). Obama himself said in Japan that, ‘technological progress without an equivalent progress in human institutions can doom us. The scientific revolution that led to the splitting of an atom requires a moral revolution as well.’ For this statement to be meaningful it is necessary to identify who is responsible for the existing, highly dangerous state of affairs. In short, the US government’s recent record supports Scarry’s suggestion that a democratic revolution is
what, in reality, is most needed if the US is to make substantial progress on nuclear non-proliferation and disarmament. Short-term reforms towards the democratic control and ultimate dismantlement of the US’s nuclear arsenal have been outlined by Kennette Benedict, who writes that the next administration should: place our nuclear weapons on a much lower level of launch readiness, release to the public more information about the nuclear weapons in our own arsenals, include legislators and outside experts in its nuclear posture review and recognize Congress’
authority to declare war as a prerequisite to any use of nuclear weapons. Assessing Obama’s nuclear legacy In order to properly appreciate what a Trump presidency may bring, we need to revisit the range and types of powers bequeathed to the commander-in-chief by previous administrations. Despite the military advances made by China and Russia in recent years, it is important to recognise that the US remains far and away the biggest global spender on conventional and nuclear weapons and plans to consolidate this position by maintaining significant technological
superiority over its adversaries, which will, as is well appreciated, push Beijing, Moscow—and thus other regional powers—to respond. Yet spending on nuclear weapons alone is set to pose significant budgeting difficulties for future US governments . According to a 2014 report by the James Martin Center, the Departments of Defense and Energy plan to spend approximately $1 trillion over the next 30 years ‘to maintain its current nuclear arsenal and procure a new generation of nuclear-armed or nuclear capable bombers and submarines’ as well as new submarine
launched ballistic missiles (SLBMs) and inter-continental ballistic missiles (ICBMs). Arms Control Today has found that total Defense Department nuclear spending ‘is projected to average more than $40 billion in constant fiscal year 2016 dollars between 2025 and 2035, when modernization costs are expected to peak’. Including costs for the Department of Energy’s National Nuclear Security Administration’s projected weapons-related spending during this period ‘would push average spending during this period to more than $50 billion per year’. If anywhere near these
sums are spent, then the modest reductions to the US’s nuclear stockpile achieved during the Obama presidency will be entirely overshadowed. Moreover, as analyst Andrew Lichterman notes, the US’s continued modernisation of its nuclear forces is ‘inherently incompatible’ with the ‘unequivocal undertaking’ given at the 2000 NPT Review Conference to eliminate its nuclear arsenal and apply the ‘principle of irreversibility’ to this and related actions. For Lichterman, the huge outlays committed to the nuclear weapons complex were part of a political ‘bargain’ made by
the Obama administration with Republicans. This ensured that the New START nuclear arms control treaty would pass in the Senate whilst also not disturbing the development of missile defense and other advanced conventional weapons programmes. New START is a bilateral agreement between Russia and the US, which Steven Pifer describes as ‘one of the few bright spots’ that exists in these nations’ relationship. Under the treaty Moscow and Washington must, by 2018, reduce their stockpile of operationally deployed strategic nuclear warheads to 1,550 . Furthermore,
both must keep to a limit of 700 deployed strategic launchers (missiles) and heavy bombers, and to a combined limit of 800 deployed and non-deployed strategic launchers and heavy bombers. Despite New START ‘proceeding smoothly’ according to Pifer, Hans Kristensen recently produced a report comparing Obama’s record with that of the previous presidents holding office during the nuclear age, which found that, hitherto, Obama has cut fewer warheads—in terms of numbers rather than percentages—than ‘any administration ever’ and that ‘the biggest nuclear
disarmers’ in recent decades have been Republicans, not Democrats. Kristensen thus drily observes of this situation that, a conservative Congress does not complain when Republican presidents reduce t he stockpile, only when Democratic president try to do so. As a result of the opposition, the United States is now stuck with a larger and more expensive nuclear arsenal than had Congress agreed to significant reductions. As his presidency draws to a close, presumably as a means of securing some sort of meaningful legacy in this area, it has been reported that Obama
considered adopting a no first use (NFU) policy for nuclear weapons, something which, whilst reversible, could act as a restraint on future presidents. Yet this was apparently abandoned, according to the New York Times, after ‘top national security advisers argued that it could undermine allies and embolden Russia and China’. Furthermore, according to Josh Rogin of the Washington Post, the governments of Japan, South Korea, France and Britain all privately communicated their concerns about Washington adopting NFU. Defense Secretary Ashton Carter is also said to
have argued that such a move would be unwise because ‘if North Korea used biological weapons against the South the United States might need the option of threatening a nuclear response’. However, as Daryll Kimball explains, the US’s ‘overwhelming’ conventional military advantage means that ‘there is no plausible circumstance that could justify—legally, morally, or militarily—the use of nuclear weapons to deal with a non-nuclear threat’. Such resistance to NFU is thus deeply disappointing given that, as Kimball goes on to note, this move would go some way to
reassuring China and Russia about the US’s strategic intentions. It would also be an important confidence-building measure for the wider community of non-nuclear weapon states, showing that the US is willing to act in 'good faith' towards its disarmament obligations under the NPT. Thinking about the causes of proliferation more widely requires us to understand what drives weaker states to seek deterrents, if their reliance on them is to be reduced. For example, as Dr Alan J. Kuperman observes, NATO’s bombing and overthrow of Libyan leader Muammar Gaddafi in
2011 ‘greatly complicated the task of persuading other states such as Iran and North Korea ‘to halt or reverse their nuclear programs’. The lesson Tehran and Pyongyang took is thus that because Gaddafi had voluntarily ended his nuclear and chemical weapons programmes, the West now felt free to pursue regime change. When assessing the importance of the Iran nuclear deal, which is often hailed as one of Obama’s landmark achievements, and which the next President must not be allowed to derail, it is thus important also to consider carefully what behaviour by the
most powerful states will enable existing or potential nuclear possessors to embrace disarmament and reduce their interest in seeking non-conventional deterrents. The inability of Washington to make substantial progress towards reducing the salience of nuclear weapons at home and abroad is all the more noteworthy when one considers the state of US and Russian public opinion on nuclear arms control and disarmament. As John Steinbrunner and Nancy Gallagher observe, ‘responses to detailed questions reveal a striking disparity between what U.S. and Russian
leaders are doing and what their publics desire’. For example, their polling found that: At the most fundamental level, the vast majority of Americans and Russians think that nuclear weapons have a very limited role in current security circumstances and believe that their only legitimate purpose is to deter nuclear attack. It is highly consistent, then, that the publics in both countries would favor eliminating all nuclear weapons if this action could be taken under effective international verification. Another im portant measure which the US has failed to hitherto ratify is the
Comprehensive Test Ban Treaty (CTBT). This is despite President Obama stating in 2009 that he intended to pursue Senate ratification of the treaty ‘immediately and aggressively’. Once more, there is notably strong public support–82% according to a 2010 poll by the Chicago Council on Global Affairs—for the US joining the CTBT but, again, the Republican-controlled Senate has blocked the treaty at every opportunity. Overall, the gap between the public’s will and the government’s inaction on nuclear issues is alarming and redolent of the wider democratic deficit in the US.
On a more positive note, the fact that the citizenry supports such measures suggests that groups advocating arms control and disarmament initiatives should continue to engage with and understand the public’s positions in order to effectively harness their s upport. Stepping back from the brink In terms of priorities for the incoming administration in the US, stepping back from military confrontation with Russia and pushing the threat of nuclear war to the margins must be at the top of the list. Whilst much has been made of a potential rapprochement between Trump and
Putin, the two have, reportedly, only just spoken for the first time on the phone and still need to actually meet in person to discuss strategic issues and deal with inevitable international events and crises, including in relation to Ukraine and Syria. As of now, whilst the mood music from both sides might suggest a warm ing of relations, as has been seen with previous administrations, unless cooperation is rooted in a real willingness to resolve problems (which for Russia includes US ballistic missile defense deployments in Eastern Europe and NATO expansion) then tensions
can quickly re-emerge. Another related question concerns how Trump will conduct himself during any potential crisis or conflict with Russia or another major power, given the stakes and risks involved, as highlighted above. Whilst we must wait to find out precisely what the new administration’s approach to international affairs will be, in the past week, NATO’s Secretary General Jens Stoltenberg told the BBC that he had been personally informed by Donald Trump, following the election, that the US remains ‘s trongly committed to NATO, and that the security guarantees
to Europe stand’. Trump had previously shaken sections of the defence and foreign policy establishment by suggesting that NATO was ‘obsolete’ and that countries such as Japan (and by extension others such as South Korea and Saudi Arabia) ‘have to pay us or we have to let them protect themselves’, which could include them acquiring the bomb. One reason why some in Washington have, in the past, not wanted their regional allies to develop their own nuclear weapons is because the US might then become dragged into an escalating conflict. Moreover, if an ally in one
region seeks the bomb, this may cause others elsewhere to pursue their own capabilities- an act of strategic independence that might make these states harder to influence and control. The US’s key relationships in East Asia and the Middle East illustrate why, if a future US President wishes to take meaningful moves towards a world free of nuclear weapons, then developing alternative regional political agreements, including strategic cooperation with China and Russia, will be necessary. As Nancy Gallagher rightly notes, the ‘weaknesses of existing international

As well as mapping out

organizations’ thus requires ‘more inclusive, cooperative security institutions’ to be constructed regionally ‘to complement and someday, perhaps, to replace exclusive military alliances’, alongside progressive demilitarisation. Such confidence-building measures would also support efforts to halt missile and nuclear tests by states such as North Korea, which may soon be capable of striking the US mainland. Imagining the next enemy

the US’s current nuclear weapons policies and its regional relationships, it is important to reflect upon
how domestic political dynamics under a Trump presidency might drive Washington’s behaviour
internationally, particularly given the nuclear shadow that always hangs over conflicts involving the
US. For example, in the near-term, Trump’s economic plan and the great expectations amongst the
American working class that have been generated, may have particularly dangerous consequences if, as
seems likely, the primary beneficiaries are the very wealthy. Reviewing Trump’s economic plans, Martin
Wolf of the Financial Times concludes that ‘the longer-term consequences are likely to be grim, not least
for his angry, but fooled, supporters. Next time, they might be even angrier. Where that might lead is
terrifying’. Gillian Tett has also highlighted the ‘real risks’ that Trump’s policies could ‘spark US social
unrest or geopolitical uncertainty’. Elsewhere, George Monbiot in the Guardian, makes the stark
assertion that the inability of the US and other governments to respond effectively to public anger
means he now believes that ‘we will see war between the major powers within my lifetime’. If these
warnings weren’t troubling enough, no less a figure than Henry Kissinger argued on BBC’s Newsnight
that ‘the more likely reaction’ to a Trump presidency from terror groups ‘will be to do something that
evokes a reaction’ from Washington in order to ‘widen the split’ between it and Europe and damage the
US’s image around the world. Given that Trump has already vowed to ‘bomb the shit out of ISIS’ and
refused to rule out the use of nuclear weapons against the group, it goes without saying that such a
scenario could have the gravest consequences and must be avoided so that the US does not play into
the terrorists’ hands. Looking more widely, President-elect Trump’s existing and potential cabinet
appointments, which Glenn Greenwald has summarised as ‘empowering…by and large…the traditional,
hard, hawkish right-wing members of the Republican Party’ also point to the US engaging in future
overseas conflicts, rather than the isolationism which many in the foreign policy establishment criticised
Trump for proposing during the presidential campaign. William Hartung and Todd Harrison have drawn
attention to the fact that defence spending under Trump could be almost $1trillion (spread over ten
years) more than Obama’s most recent budget request. Such projections, alongside Trump’s election
rhetoric, suggest that the new nuclear monarch will try to push wide open the door to more spending on
nuclear weapons and missile defense, a situation made possible, as we have seen, by Obama’s inability
to implement progressive change in this area at a time of persistent Republican obstruction. Conclusion
The problem now, for the US and the world, is that if Trump does make good on his campaign promises
then this will have several damaging consequences for international peace and security and that if
Trump does not sufficiently satisfy his supporters then this will likely pour fuel on the flames at home,
which may then quickly spread abroad. The people of the US and the world thus now have a huge
responsibility to act as a restraining influence and ensure that the US retains an accountable,
transparent and democratic government. This responsibility will only grow if crises or shocks take place
in or outside the US which ambitious and extremist figures take advantage of, framing them as threats
to national security in order to protect their interests and power. If such scenarios emerge the next
administration and its untried and untested President will find themselves with a range of extremely
powerful tools and institutional experience at their disposal, including nuclear weapons, which may
prove too tempting to resist when figuring out how to respond to widespread anger, confusion and
unrest, both at home and abroad. If we want to look for evidence supporting a belief in more hopeful
possible outcomes, we may recall that during the election campaign, Trump had said, on the highly
controversial topic of immigration, that ‘everything is negotiable’. The next President’s opportunistic
and transactional approach and the potential for a new opening with Russia could thus still provide a
way of stepping back from the brink. Yet any warming of relations between the US and other major
powers must go hand-in-hand with significant restraint when it comes to conventional and nuclear
weapons policy to properly signal a shift away from offensive unilateralism and towards common
security.
 --Hurts Vulnerable Groups
Immigration uniquely lowers the wages of native high-school dropouts- damages a
particularly vulnerable group
Borjas, Professor of Economics and Social Policy at the Harvard Kennedy School, 13 (George,
“Immigration and the American Worker”, Center for Immigration Studies, 4-9-13,
https://cis.org/Report/Immigration-and-American-Worker, accessed on 7-11-18, JM)

The mechanical nature of the predicted impact of immigration on the average wage level suggests that
we should be prudent when interpreting the wage effects implied by the simulation. The observed data
simply help to “place” the wage effect for each of the education groups around the mechanically
predetermined average wage effect. The Cobb-Douglas assumption algebraically implies that the
average wage effect in the long run must have been 0.0 percent. Therefore, some education groups
must have experienced a wage loss that is somewhat larger than zero, while other education groups
must have experienced a somewhat smaller wage loss. The mechanical nature of the average wage
effect suggests that the only valuable results that come out of the simulation deal with the impact of
immigration on relative wages. In other words, immigration led to a 3 percent decline in the wage of
high school dropouts relative to that of college graduates, and this is true both in the short run and the
long run. Immigration, therefore, is implied to have reduced the relative earnings of high school
dropouts by around $600. Let me conclude by addressing a point that is often brought up in the policy
debate. Immigration has its largest negative impact on the wage of native workers who did not graduate
from high school, a group that makes up a modest (and, in recent decades, shrinking) share of the
workforce. However, these workers are among the poorest Americans. According to the 2012 Current
Population Survey, 22.3 percent of all adults 18-64 who are in poverty (and out of school) are high
school dropouts. Similarly, the children of these workers make up a disproportionate number of the
children in poverty: 24.8 percent of all children of the native-born working poor live in households
headed by a high school dropout. In short, although native-born high school dropouts may make up a
small fraction of the native-born population, they are particularly vulnerable to the adverse wage effects
of immigration.
Aff
 2AC N/U
No UQ or Internal Link – Wage growth is dead, and causality with tight labor markets
no longer holds
Levitz 6/13
Eric Levitz, citing recent economic reports and DOL statistics, NYMag, Most Americans’ Wages Have
Actually Declined Over the Past Year, 6/13/2018, http://nymag.com/daily/intelligencer/2018/06/most-
americans-wages-have-declined-over-the-past-year.html

Earlier this month, the Labor Department revealed that America’s unemployment had fallen to its
lowest level since 1969. President Trump proceeded to declare that he was now presiding over “the
greatest economy in the HISTORY of America” — and a bitter debate over whether Trump had truly
made the economy “great again.” This argument centered on two distinct questions: 1) Is the economy
actually great? 2) To the extent that the economy is great, is said greatness a product of Trump’s wise
leadership? The second question is easier answer than the first. There is essentially no evidence that the
president’s tax cuts (his sole piece of major economic legislation) did anything to significantly improve
America’s macroeconomic performance. Since that legislation’s passage, economic growth in the U.S.
has actually slowed; consumer spending and wage growth has been tepid; and business investment,
unremarkable. One can reasonably credit Trump for successfully avoiding any policy mistake disastrous
enough to derail the expansion he inherited (a preemptive war with North Korea, for example). But his
entrance into the Oval Office did not coincide with any significant, positive change in the economy’s
preexisting trend line. If you do not own a pass-through business or a significant amount of corporate
stock, chances are Trump has personally done nothing to significantly improve your economic
circumstances. Whether the Trump economy has been “great” is a more subjective matter. By most
measures, it is better now than when Trump took office; and by some, it is exceptionally strong. The
overall unemployment rate is the lowest it’s been in decades; the African-American unemployment rate
is the lowest in recorded history; and the ratio of job openings to unemployed workers is the lowest it’s
been since the government starting tracking that statistic in December 2000. On the other hand,
Americans are deeply indebted, many are stuck with part-time jobs, and wage gains have been so
disappointing, their weakness has challenged fundamental premises of mainstream economics:
Simply put, you aren’t supposed to be able to pay workers this little when the unemployment rate is
this low. And on Tuesday, the big picture on Americans’ paychecks grew even darker: In May, U.S.
inflation accelerated to its fastest pace in more than six years — and wiped out what little wage
growth the typical American worker had seen over the past 12 months in the process. The consumer
price index was 2.8 percent higher this past pay May than it was the same month one year ago; that
increase leaves real average hourly earnings for production and nonsupervisory workers (a.k.a. the
vast majority of workers) 0.1 percent lower than they were 12 months ago. Notably, while wage
growth was infamously tepid during the Obama years, the low-inflation environment of 2015 and 2016
did allow ordinary workers to secure real raises. Part of the uptick in inflation this year is a product of
rising oil prices, a phenomenon over which the American president has little control. But some of it is
likely attributable to the deficit expansion that Trump used to finance his regressive tax cuts. (To the
extent that is the case, ordinary workers are effectively paying for the price for the Koch brothers’ big
payday). Regardless, the fact that workers aren’t seeing any real wage gains — at (somewhere near)
the peak of an economic expansion — is a crisis. The share of growth that goes to labor (as opposed to
capital) has declined substantially in recent decades. If workers can’t secure a bigger slice of the
economic pie at a time of 3.8 percent unemployment, when can they? That is a genuinely hard
question. But it seems reasonable to guess that Americans will not see truly significant wage gains, so
long as their president continues to do everything in his power to reduce their leverage over their
bosses.

Wage growth and employment are structurally screwed—Automation

Roberts 17
Lance Roberts, RealInvestment, Why Wage Growth Will Remain Elusive, Jul, 20, 2017,
http://realinvestmentadvice.com/why-wage-growth-will-remain-elusive/

Just recently, Bloomberg ran a fascinating article discussing a new study from the McKinsey Institute.
“American manufacturing could be poised to rebound as technological disruption shakes up global
production chains, but that will offer little relief to displaced factory workers, according to new research
by the McKinsey Global Institute. Now, McKinsey sees conditions changing in a way that could favor U.S.
producers: automation is weakening the case for labor arbitrage as wages rise in emerging market
economies and developing market residents are coalescing into a new consumer class, among other
factors. While the U.S. could seize on those manufacturing growth opportunities, especially if the
government and companies invest to make production more competitive, there are catches.
Importantly, production might bounce back without bringing a lot of jobs in tow. ‘Even if we rebuild
factories here and you build plants here, they’re just not going to employ thousands of people — that
just doesn’t happen,’ said report co-author and McKinsey Global Institute Director James Manyika. ‘Find
a factory anywhere in the world built in the last 5 years — not many people work there.’” McKinsey is
absolutely correct. While the President recently started a discussion on “Buy American,” most of the
root belief in the efficacy of tax cuts, tax reform, and nationalism is rooted in the history of “Reagan-
omics.” The thing most overlooked by the majority of economists, politicians, and commentators, is the
stark difference in the underlying economic and monetary fundamentals which provided the massive
tailwind Reagan’s policies that simply don’t exist currently. As my partner, Michael Lebowitz, illustrated
previously: “Many investors are suddenly comparing Trump’s economic policy proposals to those of
Ronald Reagan. For those that deem that bullish, we remind you that the economic environment and
potential growth of 1982 was vastly different than it is today. Consider the following table:’” 1982-today
The issue of working harder, and earning less, continues to plague the economic minds driving both
monetary and fiscal policy. Since the turn of the century, there has been a steady erosion of the
growth rate in compensation as advancements in technology has limited the ability for workers to
demand higher wages. Whether it has been McDonald’s installing kiosks to replace cashiers or
manufacturing companies automating assembly line jobs, the decision simply comes down to which is
more cost-effective to increase bottom-line profitability. The answer is always – automation. This is
shown in the chart below from McKinsey which shows which industries are the most susceptible to
automation. This continuing drive for profitability by reducing the cost of labor through increased
productivity also explains the other conundrum of the “hidden unemployment.” Businesses remain
keenly focused on the bottom line, particularly as payroll and benefit costs continue to climb each year,
as aggregate end demand drags. However, if businesses can increase productivity without increasing
employment those net gains flow directly to the bottom line. This attitude, of course, not only stifles
the need for employment but also lowers wage requirements as the available labor pool competes for
fewer jobs. Skills Lacking Bloomberg ran a second article recently discussing the second problem which
is further suppressing wage growth – a lack of requisite skill sets. To wit: “A growing number of
companies are finding it difficult to recruit skilled workers, which threatens to curtail profits and
growth, according to a quarterly survey conducted by the Washington-based National Association for
Business Economics. The results of NABE’s July Business Conditions Survey published on Monday
showed that 34 percent of respondents have had trouble hiring skilled employees over the last three
months, up from 27 percent in January. The Washington-based association polled 101 panelists, who are
economists from companies and industry associations. In response, companies are sponsoring foreign
workers, expanding their search and hiring more independent contractors, according to the survey.
They’re also boosting automation, stepping up internal training and in some cases improving pay,
Jankowski said. Perhaps at least partially as a result, more than a third of respondents cited labor costs
as having the largest negative impact on their profits so far this year.” In a nutshell, there is the entirety
of the problem and the reason why wage growth remains nascent. Mike Shedlock summed up what is
going on, stating: It’s not just salaries. Obamacare and benefits are hurting many companies. Cheap
money from the Fed keeps zombie companies alive. Cheap money from the Fed induced (and still does)
over-expansion fast of food restaurants and retail stores of all sorts. Workers really are not worth
benefit costs plus an extra 3% so companies seek to automate. Are McDonald’s workers worth $15?
Please be serious. Amazon and online shopping are weakening retail profits. Increasing productivity,
lowering costs and increasing profit margins. In a slow growth economy, this has become the clarion call
to corporate CEO’s. This is why, as shown on Tuesday, that while earnings per share have exploded,
actual revenue growth remains feeble. Working more and earning less. That is struggle faced by the
average American today as each dollar buys less than it did before. Statistically, the economy may be
recovering. However, for the average American it is a far more depressing reality. Capacity utilization
still remains far weaker than at the peak of the last economic cycle and employment relative to the
total working age population remains mired at lows. These components all feed back into the mental
and financial state of the consumer which, in turn, impacts businesses future investment and hiring
decisions – or lack thereof. The real story here is that there is little hope for an already struggling
middle class to gain any ground in an economic climate that continues to stack the cards against them.
But who knows, maybe someone will develop an “app” for that.

US consumer spending low in May while inflation speeds up

Crutsinger ’18 [Martin Crutsinger is an Ap Economics Writer; “US consumer spending weak in May,
while inflation speeds up”; June 29, 2018; https://www.sfgate.com/news/article/US-consumer-
spending-grew-just-0-2-percent-in-May-13036870.php]
WASHINGTON (AP) — U.S consumers increased their spending just 0.2 percent in May , a disappointing result after two
months of much stronger gains. Meanwhile, inflation — as measured by a gauge monitored by the Federal Reserve — rose at the
fastest pace in six years. The Commerce Department said Friday that the tiny rise in spending last month followed much stronger
increases of 0.6 percent in March and 0.5 percent in April. It was the poorest showing since spending had fallen 0.1 percent in
February. Inflation, by a gauge that is preferred by the Federal Reserve, was up 0.2 percent in May and 2.3 percent over the
past 12 months. That is the fastest 12-month pace since 2012 and stands above the Fed's optimal target of 2 percent annual
inflation gains. However, the central bank has signaled that it is willing to let inflation run above 2 percent for a time,
given that it had fallen short of that mark for six years. The Fed in June boosted its benchmark rate for a second time this year and projected
that it would raise rates four times this year. Analysts said that the rise in inflation seen in Friday's report should keep the Fed on track. Media:
Euronews Consumer spending accounts for 70 percent of economic activity, and economists are counting on solid
gains to propel growth after a slow start to the year . But the weak May reading on spending may call that forecast into question.
In advance of the report, many economists had been looking for a more robust increase of around 0.5 percent in
spending. After Friday's report on spending, economic forecasting firm Macroeconomic Advisors trimmed its tracking forecast for second
quarter GDP growth from an annual rate of 5.4 percent to a still-strong 4.8 percent. But other economists said projections that the
first quarter's 2 percent growth rate would double to 4 percent or better might prove too optimistic . "Right now, the extended period
of strong growth that so many are predicting is just a wish and a hope," said Joel Naroff, chief economist at Naroff Economic Advisors. "I am not
saying that the tax cuts are having no impact on growth... but as of now, I think the added spending has been disappointing." Incomes grew
a solid 0.4 percent in May, supported by strong growth in wages and salaries. Some analysts argued that the weak
spending gain seen in May was heavily influenced by a drop in spending on utility bills that reflected milder weather during the month. They
predicted a rebound in June when spending on utilities returned to more normal levels. With the income gain outpacing the increase in
spending, the saving rate rose to 3.2 percent of after-tax incomes in May, up from 3 percent in April.
 1AR N/U
Wages aren’t growing, and can’t for any meaningful length of time—structural
constraints
Shambaugh and Nunn ’17 [Jay Shambaugh is the director of The Hamilton Project and a senior
fellow in Economic Studies at the Brookings Institution. He is also a Professor of Economics and
International Affairs at the Elliott School of International Affairs at The George Washington University.
Ryan Nunn is a fellow in Economic Studies and policy director for the Hamilton Project; “Why Wages
Aren’t Growing in America”; October 24, 2017; https://hbr.org/2017/10/why-wages-arent-growing-in-
america]
the majority of Americans share in economic growth through the wages they receive for their labor, rather than through
investment income. Unfortunately, many of these workers have fared poorly in recent decades. Since the early 1970s, the hourly
inflation-adjusted wages received by the typical worker have barely risen, growing only 0.2 percent per year. In
other words, though the economy has been growing, the primary way most people benefit from that growth has almost completely stalled.
Understanding how and why this stagnation occurred is not just an academic question — it is essential to redesigning public policies so that
more Americans share in the benefits of economic growth. In a recent Hamilton Project at Brookings report, we highlight what we believe are
some of the most critical developments over the last few decades and consider what is necessary for the typical American to get a raise. For
wages to grow on a sustained basis, workers’ productivity must rise, meaning they must steadily produce more per hour, often
with the help of new technology or capital. Further, workers must receive a consistent share of those productivity gains,
rather than seeing their share decline. Finally, for the typical worker to see a raise, it is important that workers’ gains are spread
across the income distribution. If wages are rising but the increases are all going to the best-paid workers, the typical worker doesn’t
see a gain. Two of these conditions have not been met, which explains the fact that productivity has risen while
the median wage has barely changed. Since the early 1970s, the hourly inflation-adjusted wages received by the typical worker
have barely risen, growing only 0.2 percent per year. In a notable shift from earlier decades, labor’s share of income is no longer
constant, but has fallen from nearly 65 percent in the mid-1970s to below 57 percent in 2017. Though some of this
decline reflects measurement limitations, much of the decline is plausibly due to shifts in technology and market structure that have
disadvantaged workers. Even as the share of income channeled to labor has declined, the distribution of income has become more unequal.
Since the late 1970s, large wage gains have accrued to workers at the top of the distribution, and wages have been declining or stagnant for the
bottom half of the income distribution. Assigning relative responsibility to the policies and economic forces that underlie
rising inequality or declining labor share is a challenge. International trade and technological progress have
played significant roles, putting downward pressure on the wages of low-skilled workers. For example, as imports from
low-wage countries made inroads into the manufacturing sector, job losses in the United States were substantial in some areas. At the same
time, U.S. manufacturing has learned to produce more with fewer workers. Both developments generated widely shared benefits in the form of
new products and lower prices, but also led to dislocation of some workers and downward pressure on less-skilled workers’ wages.

Wage suppression inevitable

Winant ’18 [Gabriel Winant is a professor of history at Yale University; “How the American economy
conspires to keep wages down”; Gabriel Winant; April 13, 2018;
https://www.theguardian.com/commentisfree/2018/apr/13/american-economy-wage-suppression-
how-it-works
When unemployment goes down, wages are supposed to go up. That’s just supply and demand. Quite puzzlingly, though,
this mechanism seems not to be working today. Unemployment stands at a modest 4%, but paychecks aren’t
growing. Although today’s is the best-educated workforce in history, employers just insist that workers need more training. In other words,
they’re gaslighting us. Meanwhile, over decades, employers have built and maintained a massive collective political apparatus to hold down
wages. To call it a conspiracy would be only slight embellishment. The symptoms of the problem are not hard to miss. In February, for
example, the American economy posted its biggest one-month jobs gain in a couple years, but wage growth
stayed stalled out. For months, economists and financial journalists have been puzzling over the question, as Bloomberg put it, of “why the
economy grows but your paycheck doesn’t”. Economists will tell you that wages generally increase with productivity – that
you’re paid in line with the value of what you do. This was credible from the end of the second world war to the 1970s,
when productivity and hourly wages rose almost perfectly in sync. But according to research by the Economic Policy
Institute, from the early 1970s to 2016 productivity went up 73.7%, and wages only 12.3 %. Similarly, there used to be a
positive relationship between stock prices and wage increases. But some initial signs of wage growth in February sent the market spiraling over
inflation fears – until it became clear that the reported wage gains were all concentrated among top earners. Then everyone calmed down and
stopped selling. Meanwhile, the Federal Reserve just announced that it’s taking the next step in its plan to raise interest
rates. This will suppress wages to prevent inflation, although inflation is minuscule and wages aren’t showing signs of life.
Another apparent culprit is what’s called “monopsony”. Monopoly occurs when sellers are so concentrated that they don’t really
have to compete. Monopsony is when the buyers – in this case, employers – are concentrated. A recent paper from
the Roosevelt Institute found that the average level of concentration in labor markets is 45% higher than the
threshold for “highly concentrated” markets used by antitrust regulators. If the government went after employer monopsony the way
it does other kinds of markets, regulators might have their hands quite full. What’s worse, as Alan Krueger and Eric Posner pointed out in the
New York Times recently, one in five workers with a high school degree or less is subject to a non-compete clause – a
tool for employers to push wages down by forbidding workers from getting jobs with their competitors. Work is
intrinsically political. In return for your wages, you’re supposed to submit – not once but every day Many major franchises also forbid
their franchisees from hiring workers away from each other . So a McDonald’s on this corner isn’t allowed to hire away workers
from the McDonald’s on the other corner by offering 25 cents more. (Such rules were a classic tool of white landlords in the Jim
Crow South to keep down the pay of black sharecroppers .) And even employers that don’t have such a commanding position
can still hire workers through contractors who do. Temp agencies, for example, can function like bottlenecks, forcing workers into
monopsonistic labor market conditions on behalf of smaller, less powerful employers. We tend to think of employment as a market
interaction: supply and demand meet to set a price, and that’s the wage you get paid. But work is much more than this. When you
buy bread, there’s no other connection between you and the baker. You take your loaf and go home . But when you
sell labor in the labor market, you’re entering into an ongoing power relationship. In return for your wages, you’re supposed to submit – not
once but every day. It’s not just economic. Work is intrinsically political. Typically, we enter into economic relationships by ourselves. But
political relationships quickly become collective. As we’ve seen, employers have a vast collective apparatus at their disposal: the stock market,
the Fed, antitrust and employment law, just to name a few. But, defiance can travel and become collective too. For some years, for example,
unions have had success winning raises for low-wage
 2AC No Link
Immigrants good for wages
Varas 17 Jacqueline Varas, American Action Forum, March 20, 2017, “How Immigration Helps U.S.
Workers and the Economy”, https://www.americanactionforum.org/insight/immigration-helps-u-s-
workers-economy/

The number of jobs in the United States is not fixed. As the U.S. population and labor force has
increased, so has total employment. Therefore, adding foreign workers to the economy does not
crowd-out employment for native workers. To the contrary, immigration generates growth and
employment opportunities by increasing the total number of people in the United States. A larger
population leads to increased consumption levels, higher demand, and more production. One study
from the National Bureau of Economic Research (NBER) found that immigration leads to labor
specialization, which increases total factor productivity. This is not surprising: research shows that
immigrant and native workers are imperfect substitutes. They gravitate toward different types of jobs
due to varying language skills, education levels, and levels of experience. These productivity advances
have resulted in income gains for American workers. Specifically, the study found that a 1 percent
increase in immigrant employment per state leads to a 0.5 percent increase in income per worker.
Other studies have confirmed the income benefits of immigration. While examining high levels of
immigration to the United States between 1990 and 2004, researchers found that native-born U.S.
workers experienced corresponding short-run and long-run increases in wages. Approximately 90
percent of the U.S.-born labor force gained from immigration, while the individuals whose wages were
most negatively affected were previous immigrants. Immigration also caused small, negative effects on
the wages of U.S.-born workers without a high school degree.

Their ev is terrible economics—consensus of academic lit and best studies prove no

link
Nowrasteh 14
ALEX NOWRASTEH, senior immigration policy analyst at the Cato Institute’s Center for Global Liberty
and Prosperity, frequently publishes peer-reviewed academic work on economics and political economy,
Immigration’s Real Impact on Wages and Employment, 2014, https://www.cato.org/blog/immigrations-
real-impact-wages-employment

The Center for Immigration Studies (CIS) has been releasing a series of reports claiming that immigrants
are benefiting from the slightly recovering job market while natives are not. Of course, if immigrants
were even less likely to gain jobs than Americans, CIS would use that as evidence that immigrants are a
drain on the economy. No matter. The implicit assumption in CIS’ publications is that if those millions of
immigrants weren’t working in the United States, more native-born Americans would have jobs – a
static view of the economy. CIS’ fixed pie implication is inappropriate to any kind of reasonable
economic analysis of the effects of immigration on the labor market. That is the primary reason why
labor economists do not use CIS’ methods when attempting to measure the labor market impacts of
immigration. Even if CIS’ numbers were compiled correctly, they are not measuring anything useful. A
large body of academic economic research has found that immigration has a relatively small effect on
U.S-born American wages and their employment prospects. For wages impact, the estimates are that
immigrants either lower the wages of some American workers by about 2 percent or raise them by
about 2 percent in a dynamic economy (this, this, and this). The employment effects vary little but, like
wages, the effects are small and clustered around zero. Nowhere will you find a tradeoff where one
additional immigrants means that one American loses a job in the economy. The CIS papers make no
counterfactual dynamic economic estimates of the strength of the labor market without immigrants.
Here are some additional facts you won’t see in CIS’ papers: Unemployment rates for the native born
and immigrants move in the same direction with a correlation coefficient of 0.92. Immigrants and
natives tend to cluster in different occupations but the unemployment rate for both groups is very
similar over time. They both respond to a growing or shrinking labor market. Source: Bureau of Labor
Statistics Employed adult immigrants as a percent of all adult employed workers has edged up from
about 15 percent in 2005 to about 16 percent in 2014. Employed adult natives as a percent of all
employed adults declined from about 85 percent in 2005 to about 84 percent in 2014. Source: Bureau of
Labor Statistics The job market also looks pretty poor for all workers. Source: Bureau of Labor Statistics
Most employment gains since 2010, the depths of the Great Recessions, have gone to natives. But
immigrants have also done pretty well considering their lower percentage of the population and
workforce. There are several reasons why this could be true. Immigrants are much less likely to have
access to unemployment insurance and other means tested welfare programs, so their reserve wages
are lower – meaning they’re willing to re-enter the labor force for a lower wage rather than stay
unemployed. Welfare discincentivizes some unemployed Americans from reentering the workforce. And
Immigrants are more mobile than similarly skilled native-born workers. A new NBER working paper by
Brain C. Cadena and Brian K. Kovak observed that low skilled workers were disproportionately affected
by job losses during the Great Recession and are typically the least mobile workers – meaning they do
not move very far for new low skilled job openings. They found no measurable shift in the local supply of
native-born low skilled workers with a high school degree or less in response to declines in the number
of local jobs. Low skilled Mexican born workers are the exception – they are the most mobile workers in
the United States. Between 2006 and 2010, Cadena and Kovak found that a 10 percentage point larger
employment decline drove a 7.6 percentage point larger decline in population for Mexican workers in
local labor markets, all else remaining equal. The same employment decline drove a 5.3 percentage
point decline in local population for highly skilled workers. As discussed already, the native low skilled
population did not move in response to changes in the local labor market. Mobility is influenced by the
availability of welfare benefits, but many immigrant are self-selected for mobility – they did move here
from another country after all so they are less tied down to any particular region of the United States.
Immigrant labor mobility smoothens labor markets over geographical areas and has other benefits, and
it likely explains some of their job gains. Source: Bureau of Labor Statistics Unauthorized immigrants are
very mobile workers. If they come from geographically closer places like Mexico or Latin America then
they can respond very rapidly to changes in the U.S. labor market. They are then very mobile once they
arrive in the United States. The stock of unauthorized immigrants peaked in 2007 before the Great
Recession and dipped after that as the unemployment rate for immigrants rose (-0.42 correlation
coefficient). By the way, the worst period for native job growth occurred during the period when the
number of unauthorized immigrants also declined. If immigrants really did substantially decrease
employment opportunities for Americans, we wouldn’t see that effect. Source: Bureau of Labor
Statistics and Pew Research The CIS papers do not attempt any type of regression analyses or to
analyze the effects of immigration on a dynamic labor market. What would happen to the labor
market if millions of immigrant workers, consumers, and entrepreneurs disappeared? The CIS report
sheds zero light on that despite a vast peer-reviewed academic economics literature that finds
immigrants are attracted to growing economies and improve them once they arrive.
 1AR No Link
Their studies miss four core factors—their argument assumes no new jobs are created,
but the economy’s not static! Effects are either zero or positive
Peri 13
Giovanni Peri is a professor of Economics at UC Davis, The Economic Benefits of Immigration, Berkeley
Review of Latin American Studies, Fall 2013, https://clas.berkeley.edu/research/immigration-economic-
benefits-immigration

The Economic Effects of Immigrants The very simple logic of demand and supply implies that, other
thing being fixed, an increase in the labor supply reduces wages as workers compete in an increasingly
crowded economy. While correct on its face, this is “partial equilibrium” reasoning. Since partial
equilibrium models rely on the assumption that other things are kept fixed, they do not account for
the series of adjustments and responses of the economy to immigration. Still, that simple logic is often
pushed to its Malthusian implication that more workers in an economy mean lower wages and lower
incomes. These partial equilibrium implications are likely to be incorrect, theoretically and empirically,
in “general equilibrium.” The workings of four important mechanisms attenuate — and often reverse
— the partial effects of an increased supply of foreign workers on the demand for native workers.
Investments First, as a consequence of the availability of more workers, firms invest: they expand their
productive capacity and build more establishments. The productive capacity (capital) per worker has
grown in the U.S. economy at a constant rate during the period from 1960 to 2009. If anything, capital
per worker was higher when immigration was at its peak in 2007 than it was in 1990 before the
immigration boom began. Investments, that is, were responsive to the predictable inflows of workers.
Hence, immigrants did not crowd out existing firms over the long run. Rather, they increased the size
and number of firms providing investment opportunities. Educational Composition of Immigrants
Second, workers are not all the same. In terms of their labor market skills, there is a large difference
between workers with tertiary education and those with a secondary education or less. It makes sense
to distinguish between these two groups because they do different jobs. A modified version of the
wage-depressing effect of immigrants is that, if the relative supply of less-educated workers among the
foreign-born is larger, their inflow would depress the wages of less-educated natives relative to highly
educated natives. In the U.S., however, because of the combination of immigrants at the top and the
bottom of the schooling distribution (as seen in the chart below), immigrants have had a balanced
distribution. The overall proportion of college-educated immigrants has been very similar to that of
natives. So, their inflow did not significantly alter the relative supply of those two broad groups. Labor
economists consider the split between the tertiary and non-tertiary educated as the most relevant
factor for understanding the effects of relative supply on relative wages. Since immigration did not alter
the relative supply of these two groups, it is unlikely to have changed their relative wages. At the
national level, immigration cannot explain the observed increase in the relative wage of college-
educated workers versus high-school graduates observed in the 1980s and 1990s, simply because it
did not much affect that relative supply. Specialization and Technology: Job Upgrades It is even more
interesting to consider the differentiation of skills and productive characteristics between natives and
immigrants within each of the two education groups. One tendency among immigrant workers with
little schooling is to concentrate predominately in manual jobs. They tend to work as farm laborers,
construction workers, roofers, drivers, food preparers, housekeepers, and caregivers for children and
the elderly. Similarly educated natives, on the other hand, tend to work in jobs that require more
intensive communication and interaction skills; they are cooks, construction supervisors, farm
coordinators, and clerks. In a study I conducted with Chad Sparber (“Task Specialization, Immigration
and Wages,” American Economic Journal: Applied Economics, 1:3, July, 2009), we show that, due to the
limited knowledge of the language, immigrants specialize in manual jobs. As a consequence, firms and
sectors that hire immigrants generate higher demand for jobs requiring coordination, communication,
and interaction — jobs that are typically staffed by natives, whose language skills are superior. This
dynamic specialization according to skills pushes natives to upgrade their jobs to better paid,
communication-intensive occupations and protects their wages from competition from immigrants. By
taking the manual jobs that natives progressively leave, immigrants push a reorganization of production
along specialization lines that may increase the effectiveness and efficiency of labor. A related line of
research by Ethan Lewis at Dartmouth shows that, in markets with many immigrant workers, firms
adopt techniques that are particularly efficient in the use of less- educated, manual-intensive workers.
Hence, they are able to absorb a large number of less-educated manual workers without a loss in
productivity and wages. Mobility of Immigrants Finally, immigrant workers, both newcomers and those
already working in the United States, are more willing than natives to move in order to find jobs.
Immigration, as a consequence, has served to smooth out local booms and busts; by moving away
from declining regions and into booming areas, immigrants help stabilize the economy and reduce the
“mismatch” between local demand for labor and its supply. Immigrants’ willingness to move helps
slow wage decline in stagnant regions and contributes to economic growth in booming ones.
Combined with the complementarity of immigrants to natives, this mobility helps reinforce
productivity growth in strong labor markets. In summary, investment, the specialization of natives, the
complementarity between natives and immigrants, and the technological response of firms are the local
economy’s margins of response to immigration. They all attenuate and may overturn the depressing
effect of increased labor supply. These factors explain why a long line of empirical economic studies
(first summarized by Friedberg and Hunt in 1995, and then by Longhi et al. in 2005) has found that
immigration has, at most, a very small effect on native wages and employment at both the local and
the national level. My recent studies on U.S. employment and wages (in particular “Rethinking the
Effect of Immigration on Wages,” Journal of the European Economic Association, John Wiley & Sons,
Ltd., vol. 10(1), written with Gianmarco Ottaviano), found very small — a few fractions of a percentage
point — positive effects of immigration on the wages of less-educated natives. Only a few studies (e.g.,
Borjas 2003, 2006) have found negative wage effects on less-educated workers at the national level.
These effects amounted to a roughly 3 percent decline over the period from 1980 to 2000. Even those
studies, however, found positive wage effects of 1 to 1.5 percent for workers with an intermediate to
high schooling level.

And, Empirics
Smith 18
Noah Smith, Bloomberg, Immigrants Haven't Hurt Pay for Americans, 2018,
https://www.bloomberg.com/view/articles/2018-02-14/immigrants-haven-t-hurt-pay-for-americans

As President Donald Trump’s push for immigration restriction continues, his supporters among the
pundit class continue to make economic arguments for closing the country’s gates. That’s only
understandable -- it’s easy to blame immigrant competition for economic woes. But very often, it’s
wrong. On a recent appearance on Fox News, classicist and historian Victor Davis Hanson started off
with some good and important points about the need for a shared culture to bind together the U.S.’s
multiracial society. But he then continued to make some very dodgy economic arguments. Hanson
asserted that “the Trump miracle [is] giving empowerment to the working … classes,” and that this
empowerment was also being driven by “a radical curtailment [of] illegal immigration.” Hanson credits
reduced illegal immigration with lower unemployment and increasing competition for workers. Hanson
is right about two big things. First, illegal immigration has indeed been radically curtailed: Down by
Almost a Million Estimated change in unauthorized U.S. immigrant population Source: Pew Research
Center The decline didn’t happen under Trump; it began under George W. Bush, when the Great
Recession abruptly reduced demand for low-skilled labor. But illegal immigration didn’t pick up again
after the recovery began, thanks to several factors -- increased deportations and stronger border
enforcement by the Barack Obama administration, combined with much lower fertility and higher
income levels in Mexico, the main source of illegal immigration. Hanson is also correct that U.S.
unemployment is very low: The Labor Market Tightens U.S. umemployment rate Source: Bureau of
Labor Statistics via Bloomberg Though a better measure of labor-market health, the prime-age
employment-to-population ratio, shows more modest performance: Not All the Way Back Employment-
to-population ratio, age 25-54 Source: Federal Reserve Bank of St. Louis But was the halting of illegal
immigration responsible for the recovery of employment? There are good reasons to think that it was a
minor factor at best. First of all, research shows that low-skilled immigration has at most a small effect
on the wages of native-born workers. Though one high-profile researcher, Harvard University’s
George Borjas, has claimed to find more deleterious effects, repeated studies of refugee influxes have
found very small or nonexistent impacts on employment and wages. Since refugees tend to be very
low-skilled immigrants, these findings imply that illegal immigration to the U.S. didn’t put many -- or
any -- native-born Americans out of work. Casual observation shows that unemployment was also quite
low in the late 1990s and mid-2000s, with employment even higher as a percent of population. Those
were times of high illegal immigration. Second, if the U.S. working classes were really being
“empowered” as Hanson alleges, we would expect to see robust wage growth. Instead, we’ve mostly
seen the opposite. Since the end of large-scale net illegal immigration, in fact, wages have looked
pretty anemic: Spot the Illegal-Immigration Effect (It's Not Easy) Index of real compensation per hour*
Source: Federal Reserve Bank of St. Louis * 2009 = 100 During late 2014 and 2015 there was an increase
in compensation, but otherwise it hasn’t increased at anything close to the rate it did during the late
1980s, 1990s and early 2000s -- an age when illegal immigrants were coming in droves. And there has
been no “Trump miracle” yet when it comes to wages. This is not to imply that illegal immigration was
driving up American wages, simply that the curtailment since 2007 hasn’t given wages any noticeable
boost. If the working classes had been empowered as Hanson claims, one would think they would be
able to bargain for better pay. Countries with very low overall immigration rates haven’t done any
better. Japan, for example, only started to take in significant numbers of immigrants in the last few
years. But Japanese wages had been falling for many years, during the time when immigration was
almost nonexistent. Closing the gates doesn’t save a country from the forces of globalization and
technological change that have driven wages down. So while Hanson is right to note that the age of
illegal immigration has drawn to a close, he’s probably wrong to claim that this has helped the prospects
of the U.S. working class. That class has, as yet, not really been helped at all. If Trump wants to raise
wages for the people who elected him, he should try something other than immigration restriction.
DA is wrong—Stats, consensus, better models
Malshe 10
Ajay Malshe, Goodwin Procter Fellow at the Capital Area Immigrants' Rights (CAIR) Coalition in
Washington D.C and JD-Cornell Law, FROM OBSOLETE TO ESSENTIAL: HOW REFORMING OUR
IMMIGRATION LAWS CAN STIMULATE AND STRENGTHEN THE UNITED STATES ECONOMY, 2010, 3 Alb.
Gov't L. Rev. 358

Myth 1: Immigrants Take Jobs Away From Americans

The Federation for American Immigration Reform (FAIR) claims that immigrants displace as many as 1.88
million American workers from their jobs every year. n67 FAIR argues that even though there were
nearly 7.5 million unemployed American workers in 1997, the United States admitted 798,000
immigrants. n68 Additionally, FAIR claims that half of high school dropouts in the United States suffer
wage depression because of job competition from immigrants who will work for lower wages. n69 These
arguments are misleading for several reasons. First, studies have shown that overall, immigrants do
not take jobs away from the native labor force. Research from the National Foundation for American
Policy (NFAP) shows that hiring H-1B visa holders actually increases employment of U.S. workers at U.S.
technology companies. n70 For every H-1B position that an employer requests, total employment at the
company increased by two more workers than it otherwise would have been. n71 Using regression
analysis, NFAP has "found that requests for H-1B certifications by U.S. technology companies are
associated with an increase in total employment more than five times the size of [*370] [an] H-1B
request." n72 The report further explains that for technology companies with fewer than 5,000
employees, each H-1B position requested in an LCA application corresponds with an increase in
employment of 7.5 workers. n73 Furthermore, when a company is able to increase its workforce by
hiring immigrant labor, it can boost production and stimulate capital investment, which boosts the
gross domestic product (GDP). n74

Second, there is little evidence to support FAIR's claims that immigrants contribute to the wage
depression of native workers. n75 In fact, the White House Council of Economic Advisers concluded in
a 2007 report that immigrants do not take jobs away from Americans, but rather complement the
native born workforce. n76 The facts show that roughly 90% of native-born workers actually
experience wage gains due to immigration. n77 The total gain in wages due to immigration reaches
between $ 30 billion and $ 80 billion per year. n78

Economist Giovanni Peri has found that immigrant workers complement native workers in terms of
education and skills, and therefore, immigration tends to increase the productivity and wages of
natives. n79 Peri estimates that between 1990 and 2004, 90% of native born workers with at least a
high school diploma experienced wage gains from immigration ranging from 0.7% to 3.4%, depending
on education. n80 Furthermore, native-born workers without a high school diploma suffered a decline
of only 1.1% in their yearly wages due to immigration. n81 Noted immigration skeptic and economist
George Borjas has even acknowledged that there is not "a single shred of evidence that [*371]
immigrants have a sizable adverse impact on the earnings and employment opportunities of natives in
the United States." n82
Net-better for native wages, AND key to other econ internal links like innovation
Florida, 2017 Richard Florida, 6-27-2017, "Why Immigrants Are Good for U.S. Cities and the
Economy," CityLab, https://www.citylab.com/equity/2017/06/immigration-wages-economics/530301/

Not long ago, prominent Democratic leaders like former President Barack Obama and progressive
pundits like Paul Krugman publicly questioned what unskilled, low-paid immigrant laborers meant for
American workers and the U.S. economy. Today, however, Democrats are almost totally unified in their
support of open borders.

That’s the basis of Peter Beinart’s argument in The Atlantic that Democrats have lost their way on
immigration. Beinart cites much-debated research that suggests low-skill immigrants depress the wages
of less-skilled Americans, and he questions other findings that immigrants of all skill groups benefit U.S.
cities and the American economy as a whole.

As I’ve written here before, turning away the talented people who immigrate to the United States would
be a foolish, self-inflicted wound to the American economy. But it’s not just high-skilled immigrants
who give the country a leg up: a diverse population of immigrants improves the economy, for
everyone. That’s what a new study in the Journal of Economic Geography concludes in the closest look
yet at the effects of immigration on U.S. workers, cities, and the economy. The study by Thomas Kemeny
of the University of Southampton and Abigail Cooke of the University of Buffalo looks not only at the
overall effects of immigration broadly, but at the specific effects of immigrants with different levels of
education, wages, and skills—both high-skill and low-skill immigrants—on the labor market,
metropolitan areas, and the nation as a whole. Their findings confirm immigration’s economic benefit to
the U.S. and even counter misconceptions about its drawbacks.

Immigrant diversity raises productivity across the board

It’s not just about having immigrants in the workforce, but about having a diverse pool of immigrants.
Kemeny and Cooke find that when immigrants in a metro area come from many different countries,
the wages and productivity of the metro area rises across the board.

In statistical wonk-speak, their models find that a one-standard-deviation increase in a workplace’s

immigrant diversity is associated with a 1.6 percent rise in the wages of the average worker there. And
that effect is more pronounced on a larger scale: a one-standard-deviation rise in a metro area’s
immigrant diversity is associated with a 5.8 percent increase in that area’s wages.

This key finding holds up after controlling for a wide range of factors, such as the size and education of
metro areas and the kind of industries and firms that make up the economy. In other words, the finding
is not subject to any sort of bias in the data or quirk in their statistical analysis. The authors write that
the evidence leads definitively to the point that “immigrant diversity in U.S. cities and workplaces has an
independent positive influence on worker productivity.”

There is no evidence that immigrants depress the wages of workers whether they work in well-paid
high-skill jobs or low-paid less skilled jobs.

Immigrant diversity benefits high- and low-skill workers alike

Immigrant diversity not only leads to higher wages on average and overall, it also leads to higher wages
for workers at different skill levels and at different positions in the labor market. Kemeny and Cooke find
consistent evidence of a positive effect of immigrant diversity across each wage quartile.

“To the extent that we are observing a social return from immigrant diversity, this return is evenly
spread across a very wide spectrum of earners,” the authors write.

Increased diversity of immigrants across metros even correlates with increased earnings for native-
born white males and for workers at manufacturing plants—that’s a sharp and definitive contrast with
the prevailing anti-immigrant narrative.

That said, they do find that immigrant diversity of high-wage, higher-skill workers plays a bigger role and
has a bigger effect than that from lower-paid, less-skilled immigrants. Across metropolitan areas, the
diversity of high-wage immigrants is positively associated with higher wages on average and for each of
the four groups of workers. Places with greater diversity of high-skilled immigrants have higher wages
overall and for low-, mid- and high-skill workers alike. But the diversity of lower-skilled, lower-paid
immigrants has no statistically significant effect either on wages overall or on wages for the various skill
groups of workers.

Even though the diversity of higher-skilled immigrants in workplaces has a bigger effect on wages in
workplaces (as opposed to across metros overall), the diversity of lower-skilled immigrants has a
positive effect—albeit a smaller one—on workers’ average wages across the four skill groups. There is
no evidence that immigrants depress the wages of workers whether they work in well-paid high-skill
jobs or low-paid less skilled jobs. Ultimately, this is some of the most powerful evidence yet that
immigrants are good for cities and for the U.S. economy as whole.

It is easy to blame immigrants for the economic problems of the U.S. economy, the low wages of low-
skilled workers, rising economic inequality, growing geographic inequality, and the challenges of hard-
hit cities and regions. But the reality is that those problems stem not from immigrants but from the
broader structural economic transformation that has led to the decline of middle class jobs and the
bifurcation of the economy and the labor market into a small set of high-paid knowledge jobs and a
much broader set of low-paid service jobs.

All kinds of immigrants benefit the U.S. economy. And places with more and more diverse groups of
them perform better and have higher productivity and wages. High-skill immigrants bring talent and
ambition that make them disproportionate contributors to our scientific and technical base and
innovative and entrepreneurial economy.

As I have long argued, what has made the U.S. the most innovative nation in the world is not American
ingenuity, but that talent and entrepreneurial zeal of immigrants. Less-skilled immigrants, like my own
grandparents who came to this country from Southern Italy with virtually no education, bring their own
talent and ambition, do the kinds of dirty and dangerous jobs Americans don’t want to do, and bring
skills and capabilities that bolster those of our own workforce. Many, if not most, of our large cities
would not be growing at all if it wasn’t for immigrants.
Immigrants are the very backbone of American innovation, the American economy and the American
Dream. It would be disastrous economically for the Democrats to cave in to Trumpism on this. To close
our borders and turn our backs on them will end up hurting us as well as hurting them.

Increased immigration only decreases the wages of other immigrants- no effect on the
native-born population
The Economist, 17 (“A new paper rekindles a tiresome debate on immigration and wages”, The
Economist, 6-12-17, https://www.economist.com/free-exchange/2017/06/12/a-new-paper-rekindles-a-
tiresome-debate-on-immigration-and-wages, accessed on 7-11-18, JM)

By economics 101 reasoning, the short-run, partial-equilibrium effects of a large influx of migrants are
clear. Given a downward-sloping labour demand curve, a sudden increase in supply should be expected
to lead to lower wages. It shouldn't be surprising—or indeed controversial, that a study like Mr Borjas'
should find that evidence of a wage decrease. But even if large-scale migration hurts native workers in
the short run, it should have little bearing on public policy. Far more relevant to lawmakers are the long-
run effects of immigration on wages. In theory these depend on how immigrants change the skill
composition of the workforce. If lots of unskilled workers arrive in a country, unskilled workers' wages
should fall relative to everyone else's. But economists usually have to squint hard to find a negative
effect of immigration on wages for any native workers. In the long-run, immigrants tend to reduce the
wages only of past generations of immigrants (whose skills presumably overlap strongly with those of
the newcomers). One study found that while immigration between 1990 and 2006 had little effect on
wages of native-born Americans, it lowered the wages of previous immigrants by 6.7%. American-born
workers, perhaps because of their language skills, were better prepared to move on to different jobs. I
suspect that few who have participated in the Mariel debate actually care about the true short-run wage
effects were—it instead serves as a proxy war for the broader immigration debate. It seems that
proponents of immigration feel compelled to respond to Mr Borjas not because they believe Mariel
boatlift was important, but because they are afraid of ceding any ground to immigration hawks. The
problem is that Mariel isn't nearly meaningful enough to warrant such attention. Suppose Mr Borjas'
findings are entirely correct. Then what?
 AT: Link—Low Skill
No link impact on low skill wages—The argument is simply demonstrably false. The
effect is either zero or positive
Peri 17
Giovanni Peri, Professor and Chair of the Department of Economics at the University of California, Davis
and Research Associate of the National Bureau of Economic Research, The Impact of Immigration on
Wages of Unskilled Workers, Fall 2017, https://www.cato.org/cato-journal/fall-2017/impact-
immigration-wages-unskilled-workers

Immigrants did not contribute to the national decline in wages at the national level for native-born
workers without a college education. This article reviews how the timing of their immigration and skill
sets of immigrants between 1970 and 2014 could not have been responsible for wage declines. This
article then reviews other evidence at the local level that implies immigration is not associated with
wage declines for noncollege workers, even if they are high school dropouts. Higher immigration is
associated with higher average wages. Causality is difficult to tease out but numerous factors could
explain the positive association between the quantity of immigrants and native wages. Wage Stagnation
in the American Workforce Wages for noncollege graduates, which this article refers to as “unskilled,”
have been stagnant since 1980 (Autor, Katz, and Kearney 2008). The Census data confirm that the
average national real weekly wage of college-educated workers who are natives, employed for at least
one week of the previous year, and aged between 18 and 65 grew by about 20 percent from 1980 to
2014. In contrast, the average real weekly wage of noncollege graduates decreased by 8 percent during
the same period, while dropouts lost about 18 percent of their real weekly wages. Trends in wage
inequality between college and noncollege workers highlight this trend but with significant variation
over the period. For instance, the 1990s were the only decade in which college and noncollege workers
both saw positive wage gains of 10 and 14 percent, respectively. Immigration’s Contribution to Wage
Stagnation on the National Level Immigration could affect wages by changing the relative supply of
different types of workers. For instance, if immigration increased the supply of noncollege graduates
substantially relative to workers in other education levels then it could contribute to a pure “relative
supply” explanation whereby an increase in one type of worker reduces their wages relative to other
types of workers. This section uses the estimates of the elasticity of complementarity between college
and noncollege workers and between high school graduates and dropouts to see how relative changes
in the quantity of immigrants by education affects wages. Wage Gap for College and Noncollege
Workers This article calculates the effect of the relative worker-supply shift produced by immigrants
with a constant elasticity of substitution (CES) in a production function (Katz and Murphy 1992). The size
of this effect depends inversely on the elasticity of relative wages to relative supply. Table 1 uses the
elasticity of 1.75, the proper elasticity according to the current state of the peer-reviewed literature,
to show that immigration cannot account for the observed increase in wage inequality in the
considered period by decade; thus it cannot account for relative wage stagnation. The relative supply
effect of immigration actually attenuates wage inequality in the periods of largest increase in the gap
between college and noncollege workers from 1980 to 1990 and 2000 to 2010. Immigrants were
disproportionately college educated in those two decades, but these periods also experienced the
largest increase in the college and noncollege wage differentials. Immigration can explain 14 percent of
the increase in the wage gap in the 1990s. Too many immigrants are college educated to explain any of
the relative wage decline of noncollege graduates especially in the decades when this relative wage
decline was the greatest. Only in the 1990s was immigration moderately noncollege intensive. The 1980
to 2010 relative supply change due to immigrants could account only for 0.1 percent of the increase in
wage inequality when there was a 24 percent decrease in the relative college to noncollege wage ratio.
The Wage Gap for High School Dropouts and High School Graduates There is some disagreement among
economists, but there is substantial evidence that workers who are high school dropouts and those
with only a high school degree are substitutable, which means that changes in their relative supplies
do not significantly affect their relative wages (Goldin and Katz 2008, Ottaviano and Peri 2012, Card
2009). If that characteristic holds for the period that this article examines then it would negate a
significant argument for how immigration affects the relative and absolute wage declines of dropouts.
Nevertheless, using a nested-CES approach, we consider noncollege workers as a combination of
imperfectly substitutable dropouts and high school only graduates. The elasticity of substitution
between dropouts and high school graduates is set to be equal to 1.75, the same elasticity as used
above to describe the elasticity of relative wages to relative supply of college educated (Borjas 2003;
Borjas, Grogger, and Hanson 2012). Even in this case, the theory that an increase in relative immigrant
supply decreases wages and boosts inequality does not hold up (Table 2). Immigration can explain 75
percent of the increased inequality in the 1990 to 2000 period but actually attenuates or has no
significant effect on inequality in any other period. Immigration can only account for approximately
one-fifth, or 3.9 percentage points of the 18.2 percent, of the relative wage decline of dropouts to high
school graduates from 1980 to 2010. Similar analysis for more detailed education groups confirms that
immigration cannot explain changes in the wage gap. Immigration increased the supply of highly
educated workers more than that of less educated ones in most decades except for the 1990s when
the supply of high school dropouts increased at an unusually high rate. Figure 1 shows the observed
percentage growth in weekly wages for the five education groups of natives by period. If increased
immigration were associated with a lower relative growth of real wages across groups, the
distribution of wage changes should be inversely related to the change in immigrants. This happens
only in the 1990 to 2000 period. During all other decades, the immigrant supply and native wage growth
are positively associated. Immigration’s effect on the relative supply of differently educated workers
is either irrelevant to explaining wage inequality or actually attenuated it. The flow of immigrants by
decade had a greater relative impact on the supply of college-educated workers than noncollege-
educated workers, especially in the 1980-90 and 2000-10 decades when inequality rose and wage
stagnation for noncollege and dropouts increased. Immigration was only dropout intensive, relative to
the native education distribution, during the 1990-2000 decade. However, this was a period when
inequality did not grow much and the real wage of noncollege workers increased more than in any other
period. The aggregate numbers simply make it impossible for the relative supply of immigrants to
explain any significant change in inequality or wage loss for unskilled workers.
 AT: Link—High Skill
No link to high-skill immigrants
Berenson 16
Tessa Berenson, TIME, citing a report published by the National Academies of Sciences, Engineering, and
Medicine, September 21, 2016, http://time.com/4503313/immigration-wages-employment-economy-
study/

Immigration has an overall positive impact on economic growth in the United States and has small-to-
no effects on wages and employment for native-born workers, according to a new report. Prepared by
the National Academies of Sciences, Engineering, and Medicine, the report looked at immigration
trends over the past 20 years to assess the economic impact of the now more than 40 million people
living in the United States who were born in other countries. It found that immigration has an overall
positive long-term impact on the economy. It’s true that first generation immigrants can take more
money from state, local and federal governments than native-born citizens, and that especially on a
state and local level, it can be costly to educate the children of immigrants. But the report found that as
adults, children of immigrants in the next generation are huge boosters of the economy, contributing
more to the government in taxes than either their first-generation parents or native-born citizens.
Republican nominee Donald Trump often warns of immigrants taking jobs. But this report did not find
that immigrants reduce employment among native-born workers. Native teens may work fewer hours,
but their employment rate did not drop. The only employment rate that may be reduced by new
immigrants is that of prior immigrants. It’s the same story with wages. Over periods of ten years or
more, immigration has only a small effect on wages of native-born workers. Those who are more likely
to have their wages negatively affected are prior immigrants or native-born people without a high
school degree. In some high-skill areas, immigration may actually increase wages; the report says this
is evidence that high-skilled immigrants may be “complementary with natives, especially high-skilled
natives; with human capital spillovers stemming perhaps from interactions among workers; or with
high-skilled immigrants innovating sufficiently to raise the productivity of all workers.” Read More:
How Latinos Drive America’s Economic Growth “The panel’s comprehensive examination revealed many
important benefits of immigration — including on economic growth, innovation, and
entrepreneurship — with little to no negative effects on the overall wages or employment of native-
born workers in the long term,” Francine D. Blau, professor of economics at Cornell University and chair
of the panel that wrote the report, said in a statement. “Where negative wage impacts have been
detected, native-born high school dropouts and prior immigrants are most likely to be affected. The
fiscal picture is more mixed, with negative effects especially evident at the state level when the costs of
educating the children of immigrants are included, but these children of immigrants, on average, go on
to be the most positive fiscal contributors in the population.”

High skill immigrants good for the economy- they create new businesses and generate
rapid patent growth
Smith, Bloomberg Opinion columnist and former assistant professor of finance at Stony Brook
University, 18 (Noah, “Cuts to Skilled Immigration Degrade a U.S. Strength”, Bloomberg, 3-12-18,
https://www.bloomberg.com/view/articles/2018-03-12/cuts-to-h-1b-visas-for-skilled-immigrants-hurt-
u-s-economy, accessed on 7-10-18, JM)

First of all, they’re highly entrepreneurial -- between 1995 and 2005, immigrants started more than half
of the new businesses in Silicon Valley. As of 2011, more than 40 percent of Fortune 500 companies
were started by immigrants or their children. It’s impossible to know ahead of time which immigrants
will start these companies, but they’re much more likely to be those with decent technical training who
come from families with a tradition of starting businesses -- in other words, skilled immigrants. They’re
also highly innovative. A 2017 study by economists Ufuk Akcigit, John Grigsby and Tom Nicholas
examined patenting records, and concluded: Technology areas with higher levels of foreign-born
expertise experienced much faster patent growth between 1940 and 2000, in terms of both quality and
quantity, than otherwise equivalent technology areas. They go on to list a number of famous American
inventions whose creators were born elsewhere.

Their evidence is wrong- high skill workers increase wages and jobs- net benefit for
the native population
Smith, Bloomberg Opinion columnist and former assistant professor of finance at Stony Brook
University, 18 (Noah, “Cuts to Skilled Immigration Degrade a U.S. Strength”, Bloomberg, 3-12-18,
https://www.bloomberg.com/view/articles/2018-03-12/cuts-to-h-1b-visas-for-skilled-immigrants-hurt-
u-s-economy, accessed on 7-10-18, JM)

As for driving down native-born Americans’ wages, there is evidence that the worry is vastly overblown.
It’s true that the H-1B program tethers employees to their employers; for a worker on an H-1B to switch
to a different company, the procedure can be time-consuming and annoying. There is some evidence
that companies that win the chance to hire more H-1B workers pay lower wages. But there’s also
evidence showing that H-1B workers are not paid less than native-born Americans, after accounting for
their age and skill level. Moreover, studies that find negative impacts of H-1Bs tend to look only at the
specific companies that hire skilled workers. The presence of more smart people in an industry or a city
cause new ideas and technologies to flourish. These then diffuse to companies, allowing business to
innovate faster, hire more workers and pay higher wages. Skilled foreigners help keep new ideas flowing
in technology clusters like Silicon Valley; Austin, Texas; and Raleigh, North Carolina. In addition, having a
thick market of smart workers in an area allows a lot of innovative companies to cluster there. Tech
companies put their offices in high-cost California because that’s where the engineers live. And
engineers move there because that’s where the companies are. This is why even if they lower wages at a
particular company, H-1B workers raise native-born wages overall. A 2015 study by economists Giovanni
Peri, Kevin Shih and Chad Sparber found: Increases in [foreign] STEM workers are associated with
significant wage gains for college-educated natives. Gains for non-college-educated natives are smaller
but still significant. Our results imply that foreign STEM [workers] increased total factor productivity
growth in US cities.

High skilled immigration boosts wages

McDaniel ’14 [Paul McDaniel is an Immigrant Entrepreneur and Innovation Fellow at the Immigration
Policy Center. Previously, he served as Project Researcher in the Center for Citizenship and Immigrant
Communities at Catholic Legal Immigration Network (CLINIC); 5/9/2014;
http://immigrationimpact.com/2014/05/09/high-skilled-immigration-boosts-native-born-wages-in-
cities/]
Despite the soaring demand there are only 85,000 H-1B visas available each year for high-skilled workers. And as
a new report explains, these foreign workers who often work in STEM (science, technology, engineering, and
mathematics) fields are helping to boost the wages of native born workers without taking away jobs. In the report
published by the National Bureau of Economic Research, economists Giovanni Peri, Kevin Shih, and Chad Sparber
examine the effect of foreign STEM workers on the wages and employment of college educated and non-college
cities/ workers across 219 U.S. cities from 1990 to 2010. It is an update to a 2013 paper, which Immigration Impact
described last year. In their most recent report, the authors note that STEM workers, who make up the majority of
H-1B high-skilled visa holders, “are the main inputs in the creation and adoption of scientific and technological
innovation.” That innovation also helps American workers and boosts local economies. By looking at the
impact of foreign STEM workers on native born workers over a longer period of time, their research finds that
“there is a positive, large, and significant effect of foreign STEM workers on wages paid to college educated
native workers.” The authors examined the distribution of foreign-born STEM workers in 1980 and used the
introduction and variation of the H-1B visa program in 1990 that granted entry to new foreign-born college-
educated, mostly STEM, workers so that they could study the before-and-after effects of the H-1B program. That is
how they found that “H-1B-driven increases in STEM workers in a city were associated with significant increases in
wages paid to college educated natives. Wage increases for non-college educated natives are smaller but still
significant.” In particular, they note that “a one percentage point increase in the foreign STEM share of a city’s
total employment increased wages of native college educated labor by about 7-8 percentage points and the
wages of non-college educated natives by 3-4 percentage points.” They also found non-significant effects on the
employment of those two groups. Why is this the case? The authors suggest that “these results indicate that
growth in STEM workers spurred technological growth by increasing productivity, especially that of college
educated workers.” In an article for Vox, Peri, a professor of economics at UC-Davis, described the impact on
wages is likely a function of increased productivity. As Peri noted, “the largest part of these H1Bs went into
information technology. And what we estimate essentially is that by contributing to innovation and growth in that
sector it contributes to the productivity of all workers because in the 1990s and 2000s the large part of college
educated workers really used this type of technology.” As Vox points out, “by creating technological innovations
and implementing technology, these workers boost the productivity of their fellow STEM and non-STEM
workers alike.” And innovation industry and STEM jobs tend to have higher than average multiplier effects. Such
effects allow for greater job creation in metropolitan areas with strong innovation industry economies. For
example, an analysis of 320 metro areas in the U.S. shows that each new high-tech job creates five additional
long-term local jobs outside of the high-tech sector across the skills spectrum. It’s no wonder, then, that even as
prospects dim for federal immigration reform, local and state leaders are talking about the benefits of immigration
to local and regional economies and are exploring creative ways in which to welcome new immigrant innovators
and entrepreneurs and encourage and support those already there.
Interest Rates DA
Neg
 Interest Rates DA 1NC
Global growth is strong and resistant to shocks – ONLY an unexpected, rapid hike in
interest rates could trigger crisis – but that won’t happen NOW
Christopher 3/1
Chris G. Christopher, executive director of the U.S. Macro and Global Economics practice at the research
and analysis firm IHS Markit; and David Deull, senior economist at the economic research and analysis
firm IHS Markit, 3/1/18, “Economic outlook improves worldwide,”
http://www.supplychainquarterly.com/topics/Finance/20180301-economic-outlook-improves-
worldwide/

The recovery from the financial crisis of 2008-09 is finally expanding beyond a few national economies.

Until recently, the recovery from the global financial crisis of 2008-09 was one of the most disappointing
seen in the postwar period. Even as late as last year, many economists were convinced that the world
had entered "secular stagnation"—a permanent downshift in economic growth. The anemic global
recovery was powered primarily by moderate growth in only a few economies, including the United
States, the United Kingdom, and Germany.

For its part, economic growth in the United States continues to strengthen. U.S. gross domestic product
(GDP) grew at a 2.6 percent annualized rate during the fourth quarter of 2017, and the pace of inventory
building was well below the sustainable level, which means that inventory investment will likely boost
growth in the near term. In addition, employment markets are strong: job growth remains brisk, and
average hourly earnings have accelerated, which bodes well for domestic consumer demand. Finally, the
trade value of the U.S. dollar dropped at the beginning of the year, improving the outlook for U.S.
exporters.

The near-term U.S. outlook has also strengthened thanks to the Tax Cuts and Jobs Act (TCJA), which,
among other things, cuts personal taxes through 2025, allows full expensing of equipment through 2022
and partial expensing through 2026, and permanently reduces the corporate tax rate from 35 to 21
percent. Although there will likely be some payback when these provisions expire and the government
faces a tighter fiscal situation, over the next couple of years, at least, the TCJA should result in increased
personal income, which will further spur domestic consumer demand. Taken together, these improved
conditions have caused IHS Markit to raise our forecast for U.S. growth in 2018 to 2.9 percent, which
would beat each of the two previous years.

While the previous stages of the recovery were largely based on growth in a small number of countries,
worldwide economic growth in the past year—the biggest improvement since 2011—was built on
broader foundations. In particular, the economic prospects of the eurozone and Japan (shown in Figure
1), and some large emerging markets, such as Russia and Brazil, have turned around.

We estimate that the eurozone economy expanded 2.5 percent in 2017 to achieve its best year of
growth since 2007. Labor markets in Europe continue to improve; with inflation falling back in recent
months, the weak wage growth that has been seen in some countries will take less of a toll on real
household incomes. The European business climate is likely to remain favorable, and a still-competitive
euro should help exports, although political uncertainty related to Italy's elections, the possibility of
Catalonian independence, and ongoing Brexit negotiations remains high.

As of the third quarter of 2017, Japan had experienced its longest stretch of economic growth since
2001. As a consequence, Japan's unemployment rate fell to a 24-year low of 2.7 percent in November.
And despite major structural challenges that are likely to drag down growth in the medium run, the
Chinese economy is still showing resilience, with retail sales, exports, and housing starts all making
strong showings at the end of 2017.

As the United States' outlook has improved, that of its northern neighbor has, too. The Canadian
economy likely roared ahead in 2017 at a 3 percent rate, and given advances in the labor market and a
resilient housing sector, domestic demand looks likely to maintain much of its momentum. Output
continues to trend upward, consumer sentiment is climbing, and Canada's consumers do not seem
bothered by existing debt burdens.

The outlook for emerging markets continues to improve as well. Commodity prices are still rising
strongly, which has stabilized the economies of commodity exporters, and the fall of the U.S. dollar is
removing a major source of downward pressure on the currencies of developing economies.

Whereas much of the global economic recovery had been characterized by strength in a few key
countries, global growth is now becoming more harmonized. Consequently, world growth is likely to
remain robust for at least most of the coming year and probably through 2019. Interrupting this global
expansion would require a large shock. Recently, U.S. and international equities markets have been hit
with a wave of selloffs and volatility, but market declines of 10-20 percent are not unusual; historically,
they occur every two or three years. On their own, these declines should not be enough to trigger
contraction in the broader economy.

Emerging price pressures on supply chains?

For years, the slowness of the economic expansion kept inflationary pressures at bay. But now that
prices have gained traction, inflation anxiety is on the rise. The 10-year break-even point—a measure of
inflation expectations based on the U.S. bond market—rose 2.0 percent for the first time since last
March. These inflation expectations fell to around 1.7 percent last summer but rebounded sharply in
January of this year. With U.S. growth strengthening and the unemployment rate expected to approach
3.5 percent in the next couple of years—well below most estimates of "full employment"—inflationary
risks are overwhelmingly on the upside. Japan, Brazil, and India are seeing a quickening of inflation as
well. The major exception is the eurozone, where the indolence of prices can be attributed to a
strengthening euro and still-significant slack in the labor market. Commodity prices, as measured by the
IHS Markit Materials Price Index, have risen steadily since early November 2017 and, although they have
begun to slip a bit, still stand at close to their highest level since November 2014. (See Figure 2.)

What does this mean for inflation? Despite the rally in commodity markets at the end of last year, IHS
Markit expects commodity prices to remain within a moderate range. Recent price increases in many
sectors are the result of attempts to control supply or of special factors that have disrupted supply
chains, such as China's effort to improve air quality and limit waste-material imports. Additionally, in the
last week of January commodity markets saw their first decline in 12 weeks.
Still, a sharper-than-expected hike in inflation rates could interrupt the trajectory of economic growth
and disrupt global supply chains. If central banks tighten more aggressively than financial markets
expect, the damage to confidence and the expansion could be substantial.

The next year could be a turning point for many of the world's major central banks, including the
European Central Bank and the Bank of Japan, which will take their feet off the accelerator and may
even start to touch the brakes. After raising the federal funds rate by 25 basis points at its December 12-
13, 2017, meeting (an expected move), the U.S. Federal Reserve Bank's Open Market Committee is
poised to hike interest rates three times in 2018. IHS Markit believes that the Fed will raise interest
rates in March. This means that short-term interest rates will be a little higher for the next couple of
years, but that inflation is unlikely to spiral out of control.

At present, inflation is still modest, albeit rising, so any scenario in which central banks are forced to
suddenly apply the monetary brakes seems at least a year or two away. We therefore judge it unlikely
that any major central bank would raise interest rates high enough in the next year to derail the
global recovery. In short, the global economy is open for business—and we should have at least a few
good years ahead of us.

Increasing immigration will drive a short-term boost to aggregate demand—spikes

inflation, triggering rate hikes
--“immigrants boost jobs/spending” is OUR argument

Nickell 07
Stephen Nickel, Fellow-Econometric Society, Former President-Royal Economic Society, Member-Office
for Budget Responsibility's Budget Responsibility Committee, Immigration: Trends and Macroeconomic
Implications, 2007, pp 13-14, https://www.nuffield.ox.ac.uk/users/Nickell/Papers/Immigration-
TrendsAndMacroeconomicImplicationsDec07.pdf

Consider a surge in the number of immigrants. Such an increase in the flow of labour into the economy
has a variety of possible effects. The easiest way to think of these is to consider the effects on aggregate
demand and aggregate supply at a given monetary policy stance. On the demand side, the rise in the
population will plainly generate an increase in expenditure. It is probable that immigrants will spend a
lower proportion of their incomes than natives because of remittances, a lower initial expenditure on
durables and higher savings because of immigrants often have lesser entitlements to state benefits than
natives, at least, initially. On the supply side, the surge of migrants will typically lead to an increase in
potential aggregate supply with an initial increase in unemployment and effective labour supply more
generally. The overall impact on the economy will depend on the temporal pattern of these short-run
effects on aggregate demand and aggregate supply. If the former dominates, we are likely to observe a
short-run increase in output accompanied by an increase in inflationary pressure. This will tend to be
offset by a tightening of monetary policy tending to reduce the surge in economic activity. By contrast,
if the increase in aggregate supply tends to dominate, we will see a smaller increase in output and
downward pressure on inflation which will then lead to a loosening of monetary policy and a further
increase in output. This pattern will be accentuated if the rise in migration leads to increased labour
market flexibility and a fall in the equilibrium rate of unemployment, for then there is an increase in
potential output beyond that generated simply from the rise in the labour force. These shorter term
effects of immigration are likely to be influenced by labour and product market institutions. If these
tend to increase the rigidities in the economy, this will slow down the rate at which migrants tend to be
absorbed into the economy, lower the rate at which aggregate supply adjusts and increase any
inflationary pressures arising from the rise in aggregate demand generated by the migrants. So the
shorter term consequences of increased migration is very much an empirical question and in the next
section we consider the evidence. 4. Immigration and the Macroeconomy: Evidence While there is a fair
bit of evidence on the aggregate impact of migration on employment and unemployment in the short
and medium runs, there is very little which considers the consequences of this for inflation. We
consider these in turn. Migration and Unemployment An interesting analysis of the temporal pattern of
unemployment effects arising from significant immigration is provided by Hercowitz and Yashiv (2002).
They analyse the substantial migration from the former Soviet Union to Israel in the 1990s, which
represented an 18% increase in Israel’s population in a decade. Because of the different temporal
patterns of the impact of immigration on aggregate demand 14 and aggregate supply, they find an initial
positive impact on employment followed by a later negative impact and ultimately no impact at all.
Thus, in the Israel context, initially aggregate demand dominates, then aggregate supply and finally
there is no long-run effect.

Growth will continue unless that happens – only scenario for collapse – guarantees the
Next Big One
Blinder 17
Alan S. Blinder is a professor of economics and public affairs at Princeton University and a visiting fellow
at the Brookings Institution. He was formerly vice chairman of the Federal Reserve. More Sunny Days
Are Likely Ahead for the U.S. Economy. August 17, 2017, Wall Street Journal

Every op-ed should have a simple take-away, one that's easy for readers to remember. Here's mine:
Economic expansions don't die of old age -- they go on until something kills them. As the current
expansion approaches its 100th birthday (measured in months), many observers assume its days are
numbered. The National Bureau of Economic Research, whose chronologies date to 1854, shows only
two U.S. expansions that lasted longer than this one, which began in June 2009. The great expansion of
the 1960s went on for 106 months. We'll almost certainly beat that. But the granddaddy of them all was
the remarkable 120-month expansion from 1991 to 2001. To top that, the economy would have to
continue growing past June 2019 -- a very tall order. The good news is that the end isn't nigh: Economic
indicators suggest growth will continue for the foreseeable future. These signals aren't entirely
reassuring, however, because recessions can't be predicted well in advance. But economists do
understand how they begin and end. Therein lies the better news: No serious threat is in sight. The most
common cause of U.S. recessions in the postwar era has been monetary tightening by the Federal
Reserve as a means to fight inflation. If policy makers execute perfectly, they can engineer a "soft
landing" from today's low interest rates. That's what the Fed did in 1994-95, when skillful monetary
tightening led into a boom. More historical instances of Fed tightening, however, have been followed by
recessions. In some cases central bankers actually sought that outcome, as when Paul Volcker sent
interest rates skyrocketing to vanquish inflation in the 1980s. In others, they just goofed. Will the Fed
kill the current expansion? That seems unlikely. There's no inflation in sight. Janet Yellen and her
colleagues are trying to extend the good times by raising interest rates as gradually as possible, ready to
pull back if signs of a slowdown emerge. The Fed is fallible, obviously; it could make a mistake. But I
doubt it would be a big one. Other recessions have been caused by "oil shocks" -- sharp increases in oil
prices that hurt businesses and consumers. Big oil shocks preceded the world-wide recessions in 1973
and 1979, spurred by the Arab oil embargo and then the Iranian revolution. Will an oil shock end the
current expansion? Your guess is as good -- or, more accurately, as worthless -- as mine. Oil shocks are
unpredictable. That said, neither markets nor experts seem to expect one. What about a financial
ruction of some sort, such as a stock-market crash? Many of today's worry warts focus on the long and
allegedly excessive run-up in stock prices since 2009. I won't enter the debate over whether stocks are
overvalued, because no one can predict the market. But a far simpler point is germane: It takes one hell
of a stock-market crash to cause a recession. Recall the way the economy reacted when the tech bubble
burst in 2000-02. The Standard & Poor's 500 fell by almost half, and some $9 trillion of wealth was
wiped out. But the subsequent recession lasted only eight months and was so mild that annual data
show no drop in real gross domestic product. What about 1929? Didn't the Great Crash beget the Great
Depression? Not quite. The stock collapse was one of many causes of the Depression -- and by no means
the most important. In their monumental "Monetary History of the United States," Milton Friedman and
Anna Schwartz placed more blame on the Federal Reserve, which allowed the supplies of money and
credit to contract violently. Ben Bernanke echoed that criticism while serving as a Fed governor in 2002,
when he said at Friedman's 90th birthday party: "You're right, we did it. We're very sorry. But thanks to
you, we won't do it again." If any financial calamity does derail the current expansion, it will be more
likely to emanate from the credit markets -- as happened in both the Great Depression and the Great
Recession. Fortunately, there are few signs of credit markets behaving badly, unlike in 2007. Households
and businesses are less leveraged, banks hold a lot more capital, and financial regulations are much
tougher. Those of us who lived through 2008 will never say "never." But if a credit volcano is rumbling
beneath the surface, it's pretty quiet. What's left on the worry list? Every once in a while, for reasons
that become obvious only after the fact, something shakes consumer or business confidence, causing
spending to plummet. When that happens, a recession is all but inevitable. Right now, Americans and
companies are both feeling sunny. But as storm clouds gather over North Korea and investigations
threaten the White House . . . As I said, expansions don't die of old age -- they go on until something kills
them.

Deterrence will only hold if growth remains strong

Tønnesson 15
Stein Tønnesson, Research Professor, Peace Research Institute Oslo; Leader of East Asia Peace program,
Uppsala University, 2015, “Deterrence, interdependence and Sino–US peace,” International Area Studies
Review, Vol. 18, No. 3, p. 297-311

Several recent works on China and Sino–US relations have made substantial contributions to the current
understanding of how and under what circumstances a combination of nuclear deterrence and economic
interdependence may reduce the risk of war between major powers . At least four conclusions can be drawn
from the review above: first, those who say that interdependence may both inhibit and drive conflict are
right. Interdependence raises the cost of conflict for all sides but asymmetrical or unbalanced
dependencies and negative trade expectations may generate tensions leading to trade wars among inter-
dependent states that in turn increase the risk of military conflict (Copeland, 2015: 1, 14, 437; Roach,
2014). The risk may increase if one of the interdependent countries is governed by an inward-looking
socio-economic coalition (Solingen, 2015); second, the risk of war between China and the US should not
just be analysed bilaterally but include their allies and partners. Third party countries could drag China or
the US into confrontation; third, in this context it is of some comfort that the three main economic powers
in Northeast Asia (China, Japan and South Korea) are all deeply integrated economically through
production networks within a global system of trade and finance (Ravenhill, 2014; Yoshimatsu, 2014: 576);
and fourth, decisions for war and peace are taken by very few people, who act on the basis of their future
expectations. International relations theory must be supplemented by foreign policy analysis in order to
assess the value attributed by national decision-makers to economic development and their assessments
of risks and opportunities. If leaders on either side of the Atlantic begin to seriously fear or anticipate
their own nation’s decline then they may blame this on external dependence, appeal to anti-foreign
sentiments, contemplate the use of force to gain respect or credibility, adopt protectionist policies , and
ultimately refuse to be deterred by either nuclear arms or prospects of socioeconomic calamities. Such
a dangerous shift could happen abruptly, i.e. under the instigation of actions by a third party – or against
a third party. Yet as long as there is both nuclear deterrence and interdependence, the tensions in East
Asia are unlikely to escalate to war. As Chan (2013) says, all states in the region are aware that they cannot
count on support from either China or the US if they make provocative moves. The greatest risk is not
that a territorial dispute leads to war under present circumstances but that changes in the world
economy alter those circumstances in ways that render inter-state peace more precarious. If China and
the US fail to rebalance their financial and trading relations (Roach, 2014) then a trade war could result,
interrupting transnational production networks, provoking social distress, and exacerbating nationalist
emotions. This could have unforeseen consequences in the field of security, with nuclear deterrence
remaining the only factor to protect the world from Armageddon, and unreliably so. Deterrence could
lose its credibility: one of the two great powers might gamble that the other yield in a cyber-war or
conventional limited war, or third party countries might engage in conflict with each other, with a view to
obliging Washington or Beijing to intervene.
 2NC UQ
Fed is hiking interest rates gradually now, driving stable growth—only a material
change in inflationary pressures will prompt rapid hikes
Tepper 6/13
Taylor Tepper, Federal Reserve raises rates for second time in 2018 , 6/13/2018,
https://www.bankrate.com/banking/federal-reserve/fomc-recap/

Fed Chair Jerome Powell has gotten the hang of this. For the second time in 2018, and the seventh time
since the Federal Reserve began to tighten monetary policy in December 2015, the Fed hiked a key
short-term rate after concluding its two-day meeting Wednesday, this time to a target rate between
1.75 percent and 2 percent. The move is a boon for savers eager to cash in on higher yields on savings
accounts and CDs, and a gut punch to borrowers, especially those whose debt is tied to adjustable rates,
such as credit card borrowers. For the second consecutive meeting, the Federal Open Markets
Committee was unanimous in its decision to increase its key benchmark rate. The Fed is expected to
increase rates two more times in 2018, representing a quicker pace than from earlier meetings, and
three times next year. “The Fed forecasts, the so-called ‘dot plot,’ make it very clear that we’ve got
another two interest rate hikes in store for the back half of 2018,” says Bankrate chief financial analyst
Greg McBride. Why the Fed raised rates The Federal Reserve has two jobs: maximize employment and
keep prices stable, which has been defined recently by a target inflation rate of 2 percent. The first
front is going swimmingly. The unemployment rate ticked down to 3.8 percent in May, the lowest level
since April 2000, as employers added an average of 179,000 workers per month over the past quarter.
Other employment gauges tell a similar story, including the one that takes into account those who want
a job but have given up looking and those working part-time but want a full-time salary, which has
dropped by 0.8 percentage point to 7.6 percent over the past year. There’s currently one job opening
for every unemployed worker. Compare that with the end of the recession in 2009 when there were 6.7
unemployed persons per available job. Meanwhile, the number of Americans filing for unemployment
came in below expectations last week, corporate profits were boosted by the recent GOP tax cut
package, and the stock market has found its footing after a soupy winter. All of this means the Fed can
continue its plan of slowly increase borrowing rates and reducing the size of its unprecedented balance
sheet, which was built up in the aftermath of the recession to boost economic growth. “The Fed’s path
of gradual rate hikes and slow sheet reduction seems well-established at this point,” says Aaron
Anderson, senior vice president of research at Fisher Investments. “The trajectory of U.S. inflation or
the broader U.S. economy would likely need to change materially for (the central bank) to deviate from
that path.”

No rapid inflation incoming – things set and predicted to remain gradual

Dunsmuir, 18
(Lindsay Dunsmuir, seen in: Reuters, HuffPost, Business Insider, The Globe and Mail, Yahoo, St. Louis
Post-Dispatch, The Atlanta Journal-Constitution, Christian Science Monitor, Fox Business, The Columbus
Dispatch, The Fiscal Times, “Fed's Williams: I don't see any rapid increase in inflation coming”, 2018,
https://www.reuters.com/article/us-usa-fed-williams/feds-williams-i-dont-see-any-rapid-increase-in-
inflation-coming-idUSKBN1I52AF VBM)

The Federal Reserve should continue to raise interest rates in a gradual way and there appears to be
no abrupt rise in inflation on the horizon even as price gains have moved toward the central bank’s
target, San Francisco Fed President John Williams said on Friday. Williams, who in June is set to become
the head of the New York Fed, seen as the second-most influential position at the U.S. central bank, also
said that he is comfortable with inflation overshooting the Fed’s 2 percent target for a period of time.
“They’ve been picking up (inflation data), moving closer to our 2 percent trend but I don’t see any
rapid increase in inflation coming, so I feel this is pretty much a ‘Goldilocks’ economy,” Williams said in
an interview with broadcaster CNBC. “Given that inflation has been below our target for a number of
years, I think it is important to reinforce that message that we think of 2 percent as the midpoint of
where we expect inflation to be and I am personally comfortable with the fact that inflation may
overshoot that 2 percent for a while,” he added. U.S. payrolls increased solidly in April, albeit at a
slower-than-expected pace, while the jobless rate slipped to a near 17-1/2-year low of 3.9 percent as
some Americans left the labor force, the Labor Department reported on Friday. The same report showed
that wages barely rose last month. In a statement following a meeting on Wednesday, Fed policymakers
made clear that the 2 percent inflation goal is a ‘symmetric’ aim, meaning they will not be immediately
concerned with increases above it. The central bank raised interest rates in March and currently
forecasts another two hikes this year, although an increasing number of policymakers see three as
possible. Williams said a total of three or four rate hikes this year remained the base case. “I still think
that’s the right way to think about it given the continued improvement in the economy,” he said.

Rate hikes currently unhurried because inflationary target’s holding steady – Fed
focusing on keeping market calm
Robb, 6/8
(Greg Robb, Senior Washington Correspondent at MarketWatch, “Fed will raise interest rates - here’s
what it will do to keep market calm”, https://www.marketwatch.com/story/feds-goal-is-to-signal-an-
unhurried-pace-of-interest-rate-hikes-2018-06-08 VBM)

The Federal Reserve will raise its short-term target rate while trying to keep markets calm by signaling
future interest-rate hikes will come at an “unhurried” pace.

The Fed, which ends two days of talks Wednesday , will make few wrinkles because “it is in a good spot,”
said Ellen Zentner, chief U.S. economist at Morgan Stanley. “The data since March is pretty much in line
with the outlook and the rate path clearly remains a gradual one,” she said in an interview.

“We’re just not at the point where the Fed needs to be worried about the rise of inflation,” Zenter
added. While core inflation is moving toward the Fed’s 2% target, inflation pressures are not broad
based and wage growth in contained, she said.

Most of the year-on-year growth in core services inflation since last fall owes to two categories, financial
services and hospitals, she said.
Kevin Logan, chief economist at HSBC Securities, agreed. “They don’t feel pressed. They have settled
into this gradual path of hiking every three months and it seems to be working OK. They don’t want to
be disturbing the financial market.”

On Tuesday, the Labor Department released consumer price inflation data for May that showed year-
on-year headline inflation accelerated to a six-year high led by higher gasoline.

But analysts said the data would not change the trajectory of monetary policy as the year-on-year gains
should top out in coming months.

“The trends are still benign,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Earlier Wednesday, the government reported that wholesale costs surged in May.

Even though growth in the second quarter is looking strong, with some tracking estimates as high as
4.6%, the Fed will be cautious, concerned with the ongoing G-7 trade conflict, the recent bout of market
stress over Italy, and disappointing growth in other advanced economies, said Krishna Guha, Fed
watcher at Evercore ISI.

The market has already priced in a decision by the Fed to raise the target range of the federal funds rate
by 25 basis points to a range of 1.75% to 2%. This will be the second rate hike this year and the seventh
move since the start of the tightening cycle.

The interest-rate decision will come at 2 p.m.. The Fed will also released updated economic forecasts for
the economy and interest-rate policy, and Chairman Jerome Powell will hold a press conference.

Analysts say any changes to the Fed’s forecast and policy statement may get in the way of its plans for a
calm message.

Markets will be focusing on the central bankers updated “dot-plot” projections for interest rates. If only
one official decides to raise their forecast for rates, that would send a signal of four more moves this
year, complicating the unhurried message.

“It would mean that one Fed officials thought U.S. labor market conditions trump all the global worries
and the market would have to take that on board,” Logan said.

At the moment, traders see a 38% chance of four rate hikes this year. That is down from over 50%
before the bond market selloff in view of political turmoil in Italy.

The yield on the 10-year Treasury yield TMUBMUSD10Y, -0.23% has fallen to 2.96% after topping 3%
last month.

Another hurdle is that Fed officials, in the last few weeks, have expressed an interest in updating the
policy statement.

At issue is language that has been in the statement since the Fed moved rates off zero in December
2015, that says “the federal funds rate is likely to remain, for some time, below levels that are expected
to prevail in the longer run.”
In an interview with MarketWatch, Cleveland Fed President Loretta Mester pointed out that the
language was something she and her colleagues probably needed to “think about.” Later Fed Governor
Lael Brainard called it “stale.”

The problem is that these potential language changes “risk a knee-jerk hawkish reaction,” said Michael
Hanson, head of global macro strategy at TD Securities.

In essence, the Fed would be signaling that policy may start to bite while at the same time saying it
wants to hike more, Hanson said.

Zenter said the Fed may try to get around this by only taking “baby steps.” The Fed would leave in the
language about the longer-run but change its description of the current stance of policy from
accommodative to “modestly” accommodative.

Investors are also focused on whether developments in money markets could lead the Fed to end its
balance sheet reduction earlier than planned.
 --AT: Spending Up/Inflation Now
Flat personal spending and target inflation means econ goldilocks—Maintaining
inflation target key
LMGAM 6/29 (Legg Mason Global Asset Management – “U.S. Economy: Goldilocks Scenario?,” June
29, 2018 - https://www.leggmason.com/en-us/insights/market-snapshot/us-economy-goldilocks-
scenario.html)///JP

U.S. Inflation: Goldilocks scenario? May’s inflation figures should please the Federal Open Market
Committee (FOMC); core inflation for the 12 months ended May 31 came in at 2.0%, right on target and
the highest in over six years, and slightly above the consensus expectations of 1.9%. But personal
consumption spending rose 0.2% in May from April, slightly lower than expected and noticeably lower
than the 0.4% growth in personal income for the month. That suggests consumers may have been
banking the difference – good for household balance sheets, slightly less so for the economy as a whole.
Adjusted for inflation, personal spending was flat – 0% for the month. Fixed-income markets greeted
the numbers calmly, with the 10-year Treasury trading at about 2.847%. Equity markets were slightly
more enthusiastic, with the major U.S. indexes up about 1%, helping the S&P 500 and the NASDAQ
Composite potentially end the first six months of 2018 at gains of 2.5% and 9.5% respectively.

Hikes will be gradual now, sustaining steady econ growth – fluctuations are priced in
but the plan’s a new inflationary shock
Kihara, 18
(Leika Kihara, Leika Kihara is a journalist with Reuters based in Tokyo and covering the Bank of Japan for
two decades.Prior to joining Reuters in 2006 as an economics correspondent, she covered markets and
economicpolicy for Dow Jones Newswires for three years and for Jiji news agency for seven years.
Internally citing Fed Governor Randal Quarles, “Fed's Quarles says gradual U.S. rate hikes 'appropriate'”,
2018, https://www.reuters.com/article/us-usa-fed-quarles/feds-quarles-says-gradual-u-s-rate-hikes-
appropriate-idUSKCN1G60ES VBM)

“I anticipate further gradual increases in the policy rate will be appropriate to both sustain a healthy
labor market and stabilize inflation around our 2 percent objective,” Fed Governor Randal Quarles said
in remarks prepared for delivery to the Institute for International Monetary Affairs in Tokyo.

“The U.S. economy appears to be performing very well and, certainly, is in the best shape that it has
been in since the crisis and, by many metrics, since well before the crisis,” he said.

Investors have all but priced in another rate increase at the central bank’s next meeting, on March 20-
21, and Fed officials have signaled they expect to deliver two more rate hikes before the year is out.

Quarles’ comments underscore the general consensus at the central bank for a continuation under new
Fed Chair Jerome Powell of the slow monetary policy tightening that was initiated by his predecessor,
Janet Yellen.
Noting a rise in business optimism, an increase in business investment, a strengthening labor market
and an accelerating pace of economic growth, Quarles said the underlying fundamentals of the U.S.
economy are strong.

Although inflation continues to run below the Fed’s 2 percent target despite unemployment at a 17-year
low of 4.1 percent, he said, “A deviation from our target of a few tenths of 1 percentage point, especially
one I expect to fade, does not cause me great concern.
 Ext-AT: Hikes Inev
The Fed has a steady, predictable plan for rates – but faster growth triggers rapid
hikes and crisis
Stewart 3/21
Emily Stewart, Vox, 3/21/2018, “The Fed just took away the punch bowl”,
https://www.vox.com/business-and-finance/2018/3/21/17147624/federal-reserve-interest-rates-
jerome-powell

Rising interest rates can also make the stock market nervous, though the Fed has been careful to keep
Wall Street calm and clearly signal what sort of interest rate increases it’s planning and when. Zero
and super-low interest rates have made stocks the only place for investors to make money in recent
years, and the fear is that if the Fed raises interest rates, investors will start to look elsewhere. Higher
rates make borrowing more expensive and slow down credit flows to companies and individuals, which
could be a drag on stocks.

If the Fed gets more aggressive than anticipated about rate hikes, that could put the brakes on the
economy and, in turn, spook investors. A slowed economy translates to weaker earnings growth for
companies, and that translates to bad news for stocks.

The Fed’s Wednesday announcement suggested that more rate hikes than expected won’t be in store
for 2018 but may be for 2019. Officials had previously forecast two rate increases in 2019 but on
Wednesday penciled in three.

“The Federal Reserve’s actions are essentially a punctuation point affirming to all of us that interest
rates are on the rise and expected to rise further,” Hamrick said.

Too-fast rate hikes could put Powell on a collision course with Trump

During his presidential campaign, Donald Trump often criticized the Fed, alleging it was keeping interest
rates artificially low in an effort to prop up the Obama economy.

But since taking office, the blustery billionaire has taken a liking to keeping rates down. “I do like a low-
interest rate policy, I must be honest with you,” Trump said in an April interview with the Wall Street
Journal. The president reportedly told former Fed Chair Yellen that he considered her, like himself, a
“low-interest-rate” person.

Thus far, the Fed appears to be moving with caution when it comes to interest rates, but if it starts to
move aggressively, it could put itself and Powell — Trump’s Fed appointee — on a collision course with
the president. The White House has championed the December tax cuts as an effort to juice the
economy and has focused on boosting economic growth. If it succeeds, that’s exactly when the Fed will
step in to slow things down.

Powell on Wednesday stuck to the program on interest rates, but he may have gone afoul in another
arena: tariffs. When asked about the administration’s moves to implement tariffs on steel and
aluminum imports at a press conference, Powell acknowledged the matter had come up in the Fed’s
policy meeting and there are some concerns. “On tariffs, a number of participants in this FOMC did bring
up the issue of tariffs,” he said. “If I could summarize what came out of that, it was, first, that there’s no
thought that changes in trade policy should have any effect on the current outlook.”

Markets have priced in current rate hikes

Davidson 3/21
Paul Davidson, USA Today, 3/21/2018, “Fed raises rates, keeps forecast for 3 hikes in 2018”,
https://www.usatoday.com/story/money/2018/03/21/fed-powell-hikes-interest-rates-consumer-
loans/444986002/

Citing a brighter economic outlook, the Federal Reserve raised its key short-term interest rate
Wednesday but maintained its forecast for a total of three hikes this year amid still-modest inflation.

The move is expected to ripple through the economy, nudging consumer and business borrowing costs
higher, especially for variable-rate loans such as adjustable-rate mortgages and credit cards.

Investors cheered the unchanged rate forecast for 2018, pushing up the Dow Jones industrial average
about 250 points initially before stocks pared their gains.

The Fed’s policymaking committee, as widely anticipated, lifted the federal funds rate — what banks
charge each other for overnight loans — by a quarter percentage point to a range of 1½% to 1¾%.

That’s still low by historical standards but it marks the central bank’s fourth rate increase in the past 12
months and another vote of confidence in an economy that’s picking up steam nearly nine years after
the Great Recession ended.

"We're trying to take that middle ground" on rate hikes, boosting rates enough to head off an eventual
spike in inflation without derailing the economic expansion, Fed Chairman Jerome Powell said at a
news conference. The meeting was the first led by Powell, a Republican and Trump appointee, who took
the reins from Democrat Janet Yellen last month.

A breakdown of how the Fed sees:

How fast rates will rise

Wednesday’s rate hike was all but certain. Most of the suspense centered on whether the Fed would
bump up its forecast from a total of three quarter-point increases this year to four. It held steady at
three but raised its projection from two to three hikes next year as inflation picks up.

The Fed expects its key rate to climb to about 2.1% at the end of the year and 2.9% by the end of 2019
and over the longer run. It still expects “further gradual” rate increases.

With federal tax cuts and increased spending set to juice growth over the next couple of years, some
analysts expected policymakers’ median projection to factor in an additional hike in 2018. That could
have unnerved already volatile markets. But surprisingly tame consumer price increases likely
convinced Fed officials to stand pat, at least for now.
Rate hikes have been cautious and planned to ensure steady growth
Elliott 2/4
Larry Elliott, the Guardian's economics editor and has been with the paper since 1988, The Guardian,
2/4/2018, “Deja vu? It's looking like 1987 again for the US economy”,
https://www.theguardian.com/business/2018/feb/04/is-this-the-1987-us-economy-or-just-deja-vu

Up until now, the Fed has been acting with extreme caution. Interest rates have been raised in baby
steps and with ample warning. Wall Street thought Yellen had got her strategy just about right. Stimulus
was being removed in order to forestall any pickup in inflation, but not so rapidly as to choke off
growth.
 --AT: Inflation Too Low
Slow but steadily increasing wages driven by a full-employment economy are
gradually increasing inflation—that’s keeping interest rate hikes gradual
Mutikani 10/31 Lucia Mutikani, 10/31/17, Reuters, “U.S. Consumer Confidence Near 17-year High;
Wages Rising”, https://www.reuters.com/article/us-usa-economy-costs/u-s-consumer-confidence-near-
17-year-high-wages-rising-idUSKBN1D01O5

Signs of a pickup in wage growth, which has lagged the eight-year economic recovery, are likely to be
welcomed by Fed officials, who are scheduled to begin a two-day policy meeting later on Tuesday. The
U.S. central bank is unlikely to raise interest rates this week, but is expected to increase borrowing costs
in December for a third time this year.

U.S. stocks were trading higher, also lifted by upbeat earnings from consumer companies Mondelez
(MDLZ.O) and Kellogg (K.N). The dollar was little changed against a basket of currencies, while prices for
U.S. Treasuries slipped.

Steadily increasing wages offer hope that inflation could soon trend higher. Economists say labor costs
need to rise by at least 3 percent to push inflation closer to the U.S. central bank’s 2 percent inflation
target. Labor costs increased 2.4 percent in the year to June.

A government report on Monday showed the Fed’s preferred inflation measure, the personal
consumption expenditures (PCE) price index excluding food and energy, increasing 1.3 percent in the 12
months through September. The core PCE has undershot the Fed’s 2 percent target for nearly 5-1/2
years.

“As long as the labor market remains tight and wages are firming, Fed officials will continue to expect
inflation to move higher next year and thus will be inclined to stay on the gradual normalization path,
even in the face of current low inflation prints,” said Kevin Cummins, senior U.S. economist at NatWest
Markets in Stamford, Connecticut.

Those small but steady gains are goldilocks

Bloomburg 18 (Time, “U.S. Adds 148,000 Jobs in December and Wages Rise”, January 5th, 2018,
http://time.com/5089477/december-jobs-report-2017/) MJG

U.S. job gains slowed by more than forecast in December, wage

growth picked up slightly and the unemployment rate
held at the lowest level since 2000, adding to signs of a full-employment economy. Payrolls rose by 148,000,
compared with the 190,000 median estimate of economists surveyed by Bloomberg, held back by a drop in retail positions, a Labor Department
report showed Friday. The
jobless rate was at 4.1 percent for a third month, while average hourly earnings
increased by 2.5 percent from a year earlier, after a 2.4 percent gain in November that was revised downward. The
job gains, while less than forecast, bring the 2017 total to 2.06 million jobs — below 2016 but slightly more than analysts had been expecting at
the start of Donald Trump’s first year as president. With the economy at or near maximum employment, one of the Federal Reserve’s goals, the
figures likely keep the central bank on track for continued gradual interest-rate hikes in 2018. While
payroll increases have slowed
over the past few years as the labor market tightens, economists say job gains above 100,000 a month
are still enough to keep putting downward pressure on the jobless rate. The breakdown of December data across
industries showed solid gains of 30,000 in construction and 25,000 in manufacturing. Retailers cut 20,300 positions during the height of the
holiday-shopping season, bringing total gains among service providers to 91,000, down from 176,000 in November. Revisions to prior reports
subtracted a total of 9,000 jobs from payrolls in the previous two months, according to the report. November’s reading was revised upward to
252,000 from 228,000. Wages Rise Average hourly earnings rose 0.3 percent from the prior month following a
downwardly revised 0.1 percent gain, the report showed. Among other details of the report, the participation rate was
unchanged at 62.7 percent in December. The rate, which is hovering near the lowest level since the 1970s, has nevertheless held steady in the
past year. Fed
Chair Janet Yellen has said that’s a positive sign, because the rate is under downward
pressure due to Baby Boomer workers who are retiring. Steady household demand and a pickup in capital investment,
backed by elevated consumer and business sentiment and improving global demand for U.S. goods, bode well for employment in 2018. Time
will tell whether the economic strength — along with the $1.5 trillion tax overhaul signed in December — translates into bigger wage gains,
which have proven elusive during the expansion. The Trump administration argues that tax cuts for corporations will help increase productivity
and boost pay for rank-and-file employees. That would in turn aid consumer spending, which accounts for about 70 percent of the economy.
Other Details The U-6 underemployment rate rose to 8.1 percent from 8 percent; measure includes part-time workers who’d prefer a full-time
position and people who want a job but aren’t actively looking People working part-time for economic reasons rose by 64,000 to 4.92 million
Private payrolls rose by 146,000 (median estimate was 193,000) after increasing 239,000; government payrolls advanced by 2,000 Average
workweek for all workers unchanged at 34.5 hours (matching median estimate) Number of people out of work for 27 weeks or longer, or the
so-called long-term unemployed, fell as a share of all jobless to 22.9 percent from 23.9 percent In annual revisions to data based on the
household survey, the unemployment rate for June 2017 was lowered to 4.3 percent from 4.4 percent; rates for other months during the year
were unrevised.
 2NC Link
Current growth is goldilocks, anything faster triggers rate hikes and overheating
Hungerford 2/13 Nancy Hungerford, February 13, 2018, CNBC, “Washington is Firing Up the
Economy and ‘People Should be Sppoked’”, https://www.cnbc.com/2018/02/13/goldilocks-economy-
will-us-fiscal-stimulus-lead-to-overheating-risk.html

The bulls are finding comfort in sound fundamentals and sticking to a familiar script: As long as there
are gradual rate hikes, the "Goldilocks" growth story stays intact and earnings remain robust. But with
the U.S. economy already doing well, some have raised concerns that there could be a risk of over-
heating with the amount of fiscal stimulus that is coming up. Investors are proving resilient on the heels
of last week's global market correction, buying on the dip and pushing U.S. stocks higher for the best
two-day gain since Brexit. The equity rebound comes despite a rise in the U.S. 10-year yield to a fresh
four-year high as President Donald Trump sent a request to Congress for $200 billion to support a $1.5
trillion infrastructure plan. The bulls are finding comfort in sound fundamentals and sticking to a familiar
script: So long as Federal Reserve Chairman Jerome Powell takes on the mantle of gradual rate hikes,
the "Goldilocks" growth story stays intact and earnings remain robust. Investors have long hoped for a
so-called Goldilocks economy as it implies conditions are "just right": growth persists but not at a pace
that requires central banks to tighten financial conditions at a policy faster than markets anticipate.
With so much fiscal stimulus waiting in the wings, however, some are wondering: When does too much
of a good thing, become a bad thing?

The Aff links—

<1NC explanation>

Immigrants increase consumption and local wages, creating a short-term boost

Varas 17 Jacqueline Varas, American Action Forum, March 20, 2017, “How Immigration Helps U.S.
Workers and the Economy”, https://www.americanactionforum.org/insight/immigration-helps-u-s-
workers-economy/

The number of jobs in the United States is not fixed. As the U.S. population and labor force has
increased, so has total employment. Therefore, adding foreign workers to the economy does not
crowd-out employment for native workers. To the contrary, immigration generates growth and
employment opportunities by increasing the total number of people in the United States. A larger
population leads to increased consumption levels, higher demand, and more production. One study
from the National Bureau of Economic Research (NBER) found that immigration leads to labor
specialization, which increases total factor productivity. This is not surprising: research shows that
immigrant and native workers are imperfect substitutes. They gravitate toward different types of jobs
due to varying language skills, education levels, and levels of experience. These productivity advances
have resulted in income gains for American workers. Specifically, the study found that a 1 percent
increase in immigrant employment per state leads to a 0.5 percent increase in income per worker.
Other studies have confirmed the income benefits of immigration. While examining high levels of
immigration to the United States between 1990 and 2004, researchers found that native-born U.S.
workers experienced corresponding short-run and long-run increases in wages. Approximately 90
percent of the U.S.-born labor force gained from immigration, while the individuals whose wages were
most negatively affected were previous immigrants. Immigration also caused small, negative effects on
the wages of U.S.-born workers without a high school degree.

Wage increases trigger rate hikes

Horwitz 2/5 Evan Horwitz, February 5, 2018, FiveThirtyEight, “America May Finally Be Ready To Fix Its
Infrastructure. Too Bad The Timing Stinks.”, https://fivethirtyeight.com/features/america-may-finally-
be-ready-to-fix-its-infrastructure-too-bad-the-timing-stinks/

But if pay did start to rise, odds are inflation would, too — which could prove self-defeating. Rising
inflation would likely trigger an aggressive response from the Fed, which has an explicit mandate to
keep inflation under control. That would mean faster interest-rate hikes as part of a concerted effort
to blunt inflation and moderate those wage gains.

Stimulates an increase in aggregate demand, consumer spending, and output

NASEM 16 The National Academies of Sciences, Engineering, and Medicine, September 21, 2016, “Immigration's Long-
Term Impacts on Overall Wages and Employment of Native-Born U.S. Workers Very Small, Although Low-Skilled Workers May
Be Affected, New Report Finds; Impacts on Economic Growth Positive, While Effects on Government Budgets Mixed”,
http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=23550

The role of immigrants in consumer demand. Immigrants’ contributions to the labor force reduce the
prices of some goods and services, which benefits consumers in a range of sectors, including child care,
food preparation, house cleaning and repair, and construction. Moreover, new arrivals and their
descendants are a source of demand in key sectors such as housing, which benefits residential real
estate markets.

Impacts on economic growth. Immigration is integral to the nation’s economic growth. The inflow of
labor supply has helped the United States avoid the problems facing other economies that have
stagnated as a result of unfavorable demographics, particularly the effects of an aging workforce and
reduced consumption by older residents. In addition, the infusion of human capital by high-skilled
immigrants has boosted the nation’s capacity for innovation, entrepreneurship, and technological
change. Research suggests, for example, that immigrants raise patenting per capita, which ultimately
contributes to productivity growth. The prospects for long-run economic growth in the United States
would be considerably dimmed without the contributions of high-skilled immigrants.

Drives inflation and rate hikes

Amadeo 18
Kimberly Amadeo, Kimberly is president of WorldMoneyWatch.com. She has 20 years senior-level
experience in economic analysis and business strategy working for major international corporations,
MS-Sloan School of Business, Consumer Spending and Its Impact on the Economy, 3/21/2018,
https://www.thebalance.com/consumer-spending-definition-and-determinants-3305917

Consumer spending is what households buy to fulfill everyday needs. This private consumption includes
both goods and services. Every one of us is a consumer. The things we buy every day create the demand
that keeps companies profitable and hiring new workers. Nearly two-thirds of consumer spending is on
services, like real estate and healthcare. Other services include financial services (such as banking,
investments, and insurance). Cable and internet services also count, and even services from non-profits.
The remaining one-third of our personal consumption expenditure is on goods. These include so-called
durable goods, such as washing machines, automobiles, and furniture. More frequently, we buy non-
durable goods, such gasoline, groceries, and clothing. Five Determinants of Consumer Spending There
are five determinants of consumer spending. These are the things that affect how much you spend.
Changes in any of these components will affect consumer spending. The most important determinant is
disposable income. That's the average income minus taxes. Without it, no one would have the funds to
buy the things they need. That makes disposable income one of the most important determinants of
demand. As income increases so does demand. If manufacturers ramp up to meet demand, they create
jobs. Workers' wages rise, creating more spending. It's a virtuous cycle leading to ongoing economic
expansion. If demand increases but manufacturers don't increase supply, then they will raise prices.
That creates inflation. The second component is income per capita. It tells you how much each person
has to spend. Income measurements might rise just because the population increases. Income per
person reveals whether each person's standard of living is also improving. Income inequality is the third
determinant of spending. Some people's income may rise at a faster pace than others. The economy
benefits when most of the gain goes toward low-income families. They must spend a more significant
share of each dollar on necessities until they reach a living wage. The economy doesn't benefit as much
when increases go toward high-income earners. They are more likely to save or invest additions to
income instead of spending. The fourth factor is the level of household debt. That includes credit card
debt, auto loans, and school loans. Current consumer debt statistics show that household debt has
reached new record levels. Surprisingly, high health care costs are one of the biggest causes of
overwhelming debt. The fifth determinant is consumer expectations. If people are confident, they are
more likely to spend now. The Consumer Confidence Index measures how confident people are about
the future. It includes their expectations of inflation. If consumers expect inflation to be high, they will
buy more now to avoid future price increases. That's why the Federal Reserve targets a 2 percent
inflation rate. Why It's Important Consumer spending is the single most important driving force of the
U.S. economy. Keynesian economic theory says that the government should stimulate spending to end a
recession. Supply-side economists recommend the opposite. They believe the government should cut
business taxes to create jobs. But companies won't increase production if the demand is not there. If
you doubt this, think about what would happen if everyone stopped spending. Businesses would
eventually go bankrupt and lay off workers. The government would then have no one to tax. The
economy would have to rely on exports, assuming other countries kept up their consumer spending.
Borrowing would keep the government and factories open. These additional components of gross
domestic product aren't as critical as consumer spending. Even a small downturn in consumer spending
can damage the economy. As it drops off, economic growth slows. Prices will drop, which creates
deflation. If slow consumer spending continues, the economy can go into recession. But too much of a
good thing can be damaging. When consumer demand exceeds manufacturers' ability to provide the
goods and services, prices increase. If this goes on, it creates inflation. If consumers expect ever-
increasing prices, they will spend more now. That further increases demand, forcing business to hike
their prices. It becomes a self-fulfilling prophecy that is very difficult to stop. That's why the primary
mandate of the nation's central bank, the Federal Reserve, is to ward off inflation.
Yes Link—immigrants increase aggregate demand and stimulate growth
Business Roundtable 17 Business Roundtable, August 29, 2017, “Economic Effects of Immigration
Policies: A 50-State Analysis”,
http://businessroundtable.org/sites/default/files/reports/BRT%20Economic%20Effects%20Immigration.
pdf

Immigration and GDP Immigration is well understood to have strong beneficial effects on the U.S.
economy. Countless studies examining immigration from a variety of angles and using different
methodologies have settled on this conclusion.3 On the supply side, immigrants boost growth primarily
through two effects: increasing labor input and increasing the productivity of capital. With respect to the
first effect, immigrants allow businesses to expand by reducing shortages of qualified labor and spurring
additional hiring in other parts of the economy through increases in aggregate demand. Regarding the
second effect, immigrants tend to be entrepreneurial, leading to new business start-ups, new inventions
and fresh innovations that increase capital productivity. New immigrants are consumers who increase
the overall demand for goods and services across the economy. This consumption boost not only adds
directly to economic growth, but it also induces additional economic activity. For example, increases in
consumption raise business revenues and promote business expansion — which, in turn, encourage
business investment and job creation. Higher levels of consumption also increase government revenues,
allowing state and local governments to hire more teachers and public safety workers, for example, and
invest in infrastructure improvements and other public projects.
 Ext-Immig Boosts Demand
‘Shot-in-the-arm effect’ causes increased demand
Hong et al 15 Gihoon Hong, John McLaren, National Bureau of Economic Research, 2015, “Are
Immigrants a Shot in the Arm for the Local Economy”, http://www.nber.org/papers/w21123

We have studied the effect of immigration on local labor markets, emphasizing the effect of immigration
on local labor demand as opposed to merely labor supply. We have first studied a stylized model of a
local labor market that shows how the arrival of immigrants increases local aggregate income and thus
the labor demand by the non-traded services sector. This effect, which we have labelled the ‘shot-in-
the-arm’ effect, dampens the downward pressure the extra labor supply places on local wages, and
also increases the variety of non-traded services available, which confers a benefit on all local
consumers, native-born and immigrant. Consequently, even in a model in which immigration always
lowers local wages in terms of tradeables, it raises real wages in terms of non-tradables, and depending
on how strong the shot-in-the-arm effect is, it may raise real wages in terms of the overall consumer
price index, raising utility for all local workers. In that case, immigration into a town will tend to attract
other native workers from elsewhere in the country, who will then create an additional ‘shot in the arm’
of their own, resulting in a virtuous cycle in which employment in the town has increased by more than
the direct rise in the local labor force due to the immigrants. In that case, we can say that each
immigrant generates more than one job. On the other hand, if the shot-in-the-arm effect is weak, real wages will fall,
and native workers will flow out of the town; each immigrant can then be said to generate less than one job. Since real wages
that take full account of diversity of services are difficult to measure, net flows of workers in response to immigration can be a
useful indicator of the local net effects of immigration on the welfare of local workers.

Immigrants provide a boost for local economies

Hong et al 15 Gihoon Hong, John McLaren, National Bureau of Economic Research, 2015, “Are
Immigrants a Shot in the Arm for the Local Economy”, http://www.nber.org/papers/w21123

Most economic research on the effects of immigration focuses on the effects of immigrants as adding to
the supply of labor. Prominent examples include Card (1990), Borjas (2003), and Aydemir and Borjas
(2011) who look for wage effects of immigration as a rightward shift of the labor supply curve; and
Ottaviano and Peri (2012), who argue that immigration adds a new factor of production, labor with a
different skill mix. See Friedberg and Hunt (1995) for numerous other examples. This is also the
approach to immigration implicit in some objections to immigration in the political arena. For example,
Senator Jeff Sessions of Alabama recently objected to a proposed immigration reform bill on grounds
that it would lead to a rise in the supply of labor and a drop in some native-born workers’ wages.1
However, in general equilibrium immigrants will affect not only labor supply, but also labor demand.
Many accounts by journalists and other non-economists emphasize the point that immigrants do not
serve only as additional workers, but also as additional consumers, and as a result can provide a boost
for the local labor market by increasing demand for barbers, retail store workers, auto mechanics,
school teachers, and the like.
High levels of consumption by immigrants lead to higher aggregate demand
Tse and Maani 16 (Michael and Sholeh; Professors of Economics at The University of Auckland – “The
Labour Market Effect of Immigration: Accounting for Effective Immigrant Work Experience in New
Zealand,” pg. 5 December 2016 – http://ftp.iza.org/dp10422.pdf)///JP

An equally important factor is the change to aggregate supply and aggregate demand due to
immigration. Immigration adds to the supply of workers and this leads to greater aggregate supply in the
economy. However, the inflow of immigrants also increases aggregate demand , as immigrants are
consumers of both public and private goods (Addison and Worswick 2002). If aggregate supply increases
more than aggregate demand , then we expect reduced earnings and lower employment in the labour
market. However, when the addition to aggregate demand from immigration exceeds the change to
aggregate supply , positive economic impacts are expected. It is only possible to identify whether the
supply or demand effect is stronger through empirical means. Increase in aggregate demand encourages
firms to expand production and capture larger economic benefits. To expand production, firms utilise
high levels of the factors of production in which labour is an important part. Immigrants contribute to
higher levels of aggregate demand through greater consumption of household and government goods
and services; these may include housing and infrastructure. Thus, the wage that prevails in the labour
market depends on the size of the effect of immigration on labour supply and labour demand

Immigrants consume real estate and other services

Nowrasteh 14 Alex Nowrasteh, CATO Institute, July 23, 2014, “The Fiscal Impact of Immigration”,
https://www.cato.org/publications/working-paper/fiscal-impact-immigration

Immigrants also impact the U.S. economy. They can displace U.S.-born workers, complement them, or
have little impact on their employment opportunities, all of which alter tax revenue and government
welfare expenditures in different ways. Immigrants are also consumers of real estate and other goods
and services in the United States, boosting aggregate demand and spurring investment that further
grows the taxable economy. In short, the fiscal impact of immigration is a deceptively simple question
that obscures a complex reality: Is the extra tax revenue created by immigrants more or less than the
cost of the extra government-supplied goods and services they consume? If it is more, then the fiscal
impact of immigration is positive and immigrants decrease the budget deficit or produce a budget
surplus. If less, then the fiscal impact of immigration is negative and immigrants increase the budget
deficit.
 Ext-AT: No Inflation
Increases in aggregate demand lead to rapid inflation
Totonchi 11 (Jalil; Professor at the Yazd Branch, Department of Economics at the Islamic Azad
University – “Macroeconomic Theories of Inflation,” Pgs. 459-460, 2011 –
https://pdfs.semanticscholar.org/f509/d333fdc8a63018aade623a7378c8b7e8906a.pdf)///JP

John Maynard Keynes (1883-1946) and his followers emphasized the increase in aggregate demand as
the source of demand-pull inflation. The aggregate demand comprises consumption, investment and
government expenditure. When the value of aggregate demand exceeds the value of aggregate supply
at the full employment level, the inflationary gap arises. The larger the gap between aggregate demand
and aggregate supply, the more rapid is the inflation. Keynesian (Keynes and his followers) do not deny
this fact that even before reaching full employment production factors and various appearing constraint
can cause increase in public price. This inflation constraint that appears quickly during prosperity is
originally resulting from non- proportioned section, branches and or various economic resources that
are accounted from natural properties of discipline based on market. Therefore, in one period of
prosperity it is completely natural. According to demand-pull inflation theory of Keynes, policy that
causes decrease in each component of total demand is effective in reduction of pressure demand and
inflation. One of the reductions in government expenditure is tax increase and to control volume of
money alone or together, can be effective in reducing effective demand and inflation control. In difficult
conditions, e.g. hyperinflation during war that control of volume of money or decrease in general
expenditure may not be practical increase in tax can get along with direct action for control on demand
[6].
 2NC Hikes Kill Econ

Rising inflation creates a Sophie’s Choice

Lachman 2/14
Desmond Lachman is a resident fellow at the American Enterprise Institute, US News, 2/14/2018, “A
Crisis Is Coming”, https://www.usnews.com/opinion/economic-intelligence/articles/2018-02-14/us-
economy-is-in-danger-of-overheating-and-exploding-into-financial-crisis

Today, in the face of an overheated U.S. economy, the Federal Reserve has an unenviable choice. It can
either raise its interest rate and risk bursting the global asset price bubble, or it can delay its interests
rate decision and risk incurring the wrath of the bond vigilantes who might sense that the Federal
Reserve is not serious about inflation risk. In that event, interest rates are apt to rise in a disorderly
fashion, which could lead to the more abrupt deflating of the global asset bubble.

Rapid hike sparks massive recession—and the Fed screwing it up is likely

Kolakowski 1/16 Mark Kolakowski, January 16, 2018, “Why the 1929 Stock Market Crash in 2018”,
https://www.investopedia.com/news/1929-stock-market-crash-could-it-happen-2018/

As U.S. stocks continue soaring to record high after record high, investors anticipating an inevitable
plunge have yet another cause for sleepless nights. The CAPE ratio, a measure of stock valuations
devised by Nobel Laureate economist Robert Shiller of Yale University, is now at a higher level than it
was before the Great Crash of 1929, the Financial Times reports, adding that the only time the CAPE was
even higher preceded the dotcom crash of 2000-02. However, the FT notes, there are some differences
between 1929 and 2018 that make the CAPE parallel less terrifying for investors.
From their previous bear market lows reached in intraday trading on March 6, 2009, through their closing values on January 12,
2018, the S&P 500 Index (SPX) has gained 318% and the Dow Jones Industrial Average (DJIA) has advanced 299%. Regarding the
CAPE valuation analysis, there are several key limitations.

Drawbacks of CAPE

According to investment manager Rob Arnott, the founder, chairman and CEO of Research Associates,
CAPE has been on an upward trend over time. This makes sense both to him and to the FT since the U.S.
as progressed from being essentially an emerging market to the world's dominant economy during the
course of more than a century. As a result, both believe that an increasing earnings multiple for U.S.
stocks would be justified. While the current value of CAPE is above its long term trend line, the
difference is much smaller than in 1929, as Arnott's detailed research paper shows.

Moreover, as the result of 1930s reforms such as the creation of the Securities and Exchange
Commission (SEC) and tightened financial reporting standards, the quality of reported earnings today
probably is much higher today than in 1929. Accordingly, the value of CAPE for 1929 arguably is
understated, given that its denominator, reported corporate profits, probably is overstated by today's
standards.
The FT also points out that CAPE does not account for the level of interest rates. When rates are low, as
they are today, "discounted future earnings are higher, and it is reasonable to pay more for stocks,"
the FT says. Indeed, the FT could have added that CAPE looks backwards at 10 years of corporate
earnings, whereas market valuations are, at least in theory, based on expectations of future profits.
The 1929 Crash

The Great Crash of 1929 is mostly associated with plummeting stock prices on two consecutive trading days, "Black Monday"
and "Black Tuesday," October 28 and 29, 1929, in which the Dow fell 13% and 12%, respectively. But this was only the most
dramatic episode in a longer term bear market.

After peaking at a value of 381.17 on September 3, 1929, the Dow eventually would hit bottom on July 8, 1932, at 41.22, for a
cumulative loss of 89%. It would take until November 23, 1954 – over 25 years later – for the Dow to regain its pre-crash high.
The Great Crash is generally considered to be one of the factors contributing to the onset of the Great Depression of the 1930s.

'Unintended and Undesirable Consequences'

Concerned about speculation in the stock market, the Federal Reserve "responded aggressively" with
tight money policies starting in 1928, which helped to spark the Great Crash, per the Federal Reserve
Bank of San Francisco (FRBSF). Moreover, in 1929 the Fed pursued a policy of denying credit to banks
that extended loans to stock speculators, according to Federal Reserve History.

"The Fed succeeded in putting a halt to the rapid increase in share prices, but in doing so it may have
contributed one of the main impulses for the Great Depression," as the FRBSF Economic Letter wraps
up. "Detecting and deflating financial bubbles is difficult," is a conclusion of the Fed History piece,
adding that "Using monetary policy to restrain investors' exuberance may have broad, unintended, and
undesirable consequences."

'Playbook' For Limiting Crash Damage

Both sources also indicate that, in the aftermath of the worst days of the crash, in October 1929, the
Federal Reserve Bank of New York pursued an aggressive policy of injecting liquidity into the major New
York banks. This included open market purchases of government securities plus expedited lending to
banks at a decreased discount rate.
This action was controversial at the time. Both the Federal Reserve's Board of Governors and the presidents of several other
regional Federal Reserve Banks claimed that president George L. Harrison of the New York Fed has exceeded his authority.
Nonetheless, this is now the accepted "playbook" for limiting the damage from stock market crashes, per Fed History.

In the aftermath of the 1987 stock market crash, the Fed under Chairman Alan Greenspan moved aggressively to increase
liquidity, particularly to bolster securities firms that needed to finance large inventories of securities that they had acquired by
filling the avalanche of sell orders from their clients, per a research paper from the University of Notre Dame.

In response to the financial crisis of 2008, the Fed under Chairman Ben Bernanke launched an aggressively expansionist
monetary policy designed to prop up the financial system, the securities markets, and the broader economy. Hinging on
massive purchases of government bonds to push interest rates near zero, this policy is frequently referred to as quantitative
easing.

Greenspan, meanwhile, is among those who now warn that, by continuing this easy money policy for years after the 2008 crisis
was stemmed, the Fed has created new financial asset bubbles. (For more, see also: Stocks' Big Threat Is a Bond Collapse:
Greenspan.)
Also in response to the 1987 crash, the New York Stock Exchange (NYSE) and the Chicago Mercantile Exchange (CME) instituted
so-called "circuit breakers" that would halt trading after a large drop in prices. These safeguards are designed to slow a wave of
panicked selling, and help the markets stabilize.

New Era, New Risks

On the other hand, computer-driven program trading, which caused rapid waves of frenzied selling in 1987, as well as later
violent market downdrafts such as the "Flash Crash," has increased in speed and pervasiveness. The upshot is that
computerized trading algorithms may pose one of the biggest threats to the markets today. (For more, see also: Could Algo
Trading Cause a Bigger Crash Than 1987?)

After the experience of 1929, the Fed has been indisposed to tighten monetary policy in an attempt to
deflate asset bubbles. However, as economic growth reports improve, the Fed is increasingly concerned
today about keeping inflation in check. Any miscalculation that raises interest rates too high, too fast
could spark a recession and send both stock and bond prices tumbling downwards. (For more, see
also: How The Fed May Kill The 2018 Stock Rally.)

Additionally, an increasingly interconnected world economy means that the spark that ignites a stock
market plunge in the U.S. can be lit anywhere around the globe. (For more, see also: 5 Global Risks
That Could Hammer Stocks in 2018.)

They’ll screw it up - creates financial bubbles and rapid rate hikes that crash the
economy
Economist 2/8
Economist, 2/8/2018, “America’s extraordinary economic gamble”,
https://www.economist.com/news/leaders/21736513-fiscal-policy-adding-demand-even-economy-
running-hot-americas-extraordinary

Fire your engines

The recent equity-market gyrations by themselves give little cause for concern. The world economy
remains in fine fettle, buoyed by a synchronised acceleration in America, Europe and Asia. The violence
of the repricing was because of newfangled vehicles that had been caught out betting on low volatility.
However, even as they scrambled to react to its re-emergence, the collateral damage to other markets,
such as corporate bonds and foreign exchange, was limited. Despite the plunge, American stock prices
have fallen back only to where they were at the beginning of the year.

Yet this episode does signal just what may lie ahead. After years in which investors could rely on central
banks for support, the safety net of extraordinarily loose monetary policy is slowly being dismantled.
America’s Federal Reserve has raised interest rates five times already since late 2015 and is set to do so
again next month. Ten-year Treasury-bond yields have risen from below 2.1% in September to 2.8%.
Stockmarkets are in a tug-of-war between stronger profits, which warrant higher share prices, and
higher bond yields, which depress the present value of those earnings and make eye-watering
valuations harder to justify.

This tension is an inevitable part of the return of monetary policy to more normal conditions. What is
not inevitable is the scale of America’s impending fiscal bet. Economists reckon that Mr Trump’s tax
reform, which lowers bills for firms and wealthy Americans—and to a lesser extent for ordinary
workers—will jolt consumption and investment to boost growth by around 0.3% this year. And Congress
is about to boost government spending, if a budget deal announced this week holds up. Democrats are
to get more funds for child care and other goodies; hawks in both parties have won more money for the
defence budget. Mr Trump, meanwhile, still wants his border wall and an infrastructure plan. The mood
of fiscal insouciance in Washington, DC, is troubling. Add the extra spending to rising pension and
health-care costs, and America is set to run deficits above 5% of GDP for the foreseeable future.
Excluding the deep recessions of the early 1980s and 2008, the United States is being more profligate
than at any time since 1945.

A cocktail of expensive stockmarkets, a maturing business cycle and fiscal largesse would test the mettle
of the most experienced policymakers. Instead, American fiscal policy is being run by people who have
bought into the mantra that deficits don’t matter. And the central bank has a brand new boss, Jerome
Powell, who, unlike his recent predecessors, has no formal expertise in monetary policy.

Does Powell like fast cars?

What will determine how this gamble turns out? In the medium term, America will have to get to grips
with its fiscal deficit. Otherwise interest rates will eventually soar, much as they did in the 1980s. But in
the short term most hangs on Mr Powell, who must steer between two opposite dangers. One is that
he is too doveish, backing away from the gradual (and fairly modest) tightening in the Fed’s current
plans as a salve to jittery financial markets. In effect, he would be creating a “Powell put” which would
in time lead to financial bubbles. The other danger is that the Fed tightens too much too fast because it
fears the economy is overheating.

On balance, hasty tightening is the greater risk. New to his role, Mr Powell may be tempted to establish
his inflation-fighting chops—and his independence from the White House—by pushing for higher rates
faster. That would be a mistake, for three reasons.

Large rate correction triggers recession

Miller 18
Rich Miller, Bloomberg, 1/4/2018, “Fed's Future Tightening Fraught with Recession, Political Risks”,
https://www.bloomberg.com/news/articles/2018-01-05/fed-aiming-to-restrict-credit-raising-eventual-
recession-risk

“The Fed may not have the luxury of a simple monotonic glide path back to equilibrium,” said Lou
Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “They’re going to have to
objectively tighten monetary policy in order to increase unemployment and stabilize inflation at their
target.”

That’s important because the central bank is more likely to make a policy mistake and inadvertently
push the economy into a recession if it is actively seeking to curb credit and boost joblessness, rather
than just removing monetary accommodation from the financial system, as it is now.
“It’s not preordained, but the risks are higher,” said Michael Feroli, chief U.S. economist for JPMorgan
Chase & Co. in New York.
 2NC Impact-BRICs
Sharp spike in US interest rates trigger global sovereign debt crises
UN WESS 7/13
UN World Economic and Social Survey 2017, Chapter III: The end of the Golden Age, the debt crisis and
development setbacks, 13 July 2017, p. 50

As a result, a difficult global economic situation confronted the world as it entered the 1980s—a
situation characterized by both internal and external imbalances; high inflation and unemployment
(internal imbalance) in developed countries; and large deficits in the current account of the balance of
payments (external imbalance) in both developed and developing countries. Lower demand in
developed countries led to a decline in commodity prices and a deterioration of the terms of trade for
many developing countries dependent on commodity exports.

Given the difficult economic situation, many countries in Latin America and Africa experienced an
increase in debt levels. This was fostered in part by the recycling of abundant petrodollars by the
financial institutions of developed countries. In this context, the steep increase in interest rates in the
United States of America to combat inflation at the turn of the decade triggered debt crises in many
countries of Latin America and Africa. Highly indebted countries in those regions were unable to repay
the debt, as debt service payments rose sharply. The debt crisis of the 1980s is generally considered to
have begun when, in August 1982, Mexico declared that it would no longer be able to service its debt.
This ignited a succession of sovereign defaults around the world, with one country after another
declaring a similar inability to repay.

Economic growth slowed down in all parts of the world during the second half of the 1970s and the first
half of the 1980s. Before the oil price shock of 1973, the annual growth of world gross product (WGP)
had been at 5.3 per cent, while during the rest of the 1970s, annual world growth reached only 2.8 per
cent. In the early 1980s, annual growth decelerated even further, to only 1.4 per cent in the first four
years of the decade. In particular, growth in developing countries fell dramatically. While, globally,
growth recovered to some extent in the latter half of the 1980s, it was still below the levels that had
marked the beginning of the 1970s (figure III.1).

Emerging markets are vulnerable and have no checks – currency crises cause collapse
Rogoff 15
Kenneth S. Rogoff (Senior Fellow for Economics—Council on Foreign Relations), Barry J. Eichengreen
(George & Helen Pardee Professor of Economics & Political Science—University of California, Berkeley),
et al, Prospects for the Global Economy in 2016, December 28, 2015,
http://www.cfr.org/global/prospects-global-economy-2016/p37400
The situation is different in other emerging markets like Brazil, South Africa, Thailand, and Turkey. Like
China, these countries are financially vulnerable. Their corporations are saddled with large amounts of
short-term, dollar-denominated debt which becomes increasingly difficult to service as the dollar
strengthens, as it is again likely to do in 2016. In turn, worries about corporate defaults—which damage
fiscal accounts either directly by prompting bailouts or indirectly by depressing tax revenues—can cause
investors to flee. Since these countries lack the ability to impose controls on financial transactions, the
result could be a currency collapse, potentially leading to economic collapse.

Nuclear war
Goldstein 10
Joshua S. Goldstein 10, Professor Emeritus, School of International Service, American University , 2010,
“Changing World Order - Engaging the South,” online:
http://wps.ablongman.com/long_goldstein_ir_7/35/8977/2298242.cw/index.html

In the last chapter’s “Changing World Order” section, there was mention of how a smallpox epidemic
launched from the global South and aimed at the global North would most likely return to do most
damage in the South. This quality of global rebound operates from North to South as well. Actions the North
takes in the South, such as arming Islamic extremists to fight Soviet occupiers in Afghanistan in the 1980s,
come back to haunt the North later—as when Afghan-based Islamic extremists attacked the United States.
The problem of unintended consequences of distant actions has been called “blowback.”* September 2001
demonstrated the increased interdependence of the global North and South . The extreme disparities of
wealth and power between North and South create conflicts and resentments that can reach out of the
South to punish the privileged citizens of the North who had been oblivious to the problems of poor countries.
In the world order of the 1990s, disparities sharpened and prosperity cut unevenly with both winners and losers.
The continent of Africa, along with zones of festering war and poverty in countries like Afghanistan, were losers in
the 1990s. To let a continent or even a country descend into despair may no longer be practical in the era of
terrorism. Their fate ultimately may be the fate of the North that ignores them. This is the century in
which desperate African states will be able to press their demands with weapons of mass destruction, and in
which fanatics may destroy cities with nuclear weapons. To combat terrorism may—though this is
disputed—require addressing poverty, repression, and war throughout the poorest world regions. Furthermore,
these issues may be less amenable to unilateral U.S. actions than are military responses to terrorism. Thus,
the need to address “root causes” of terrorism may draw the United States into closer cooperation with
the UN and other international institutions in the years to come. It is unclear how these relationships
will play out in practice. But if in fact the new world order is moving toward closer engagement of the
global North with the South, and toward seriously addressing the South’s problems, this move would mark a shift
from the world order that was developing in the 1990s, with its sharpened disparities. Do you think that
investing in development, democracy, and peace in the world’s poorest countries is an important
principle that should govern world order in the era of terrorist attacks? If you think this is a good idea,
should it extend globally or just to countries currently “breeding” terrorists? Can Argentina or Democratic
Congo fall apart without upsetting the rest of the world? Could all of Latin America or all of Africa? Will the
emerging world order bring together the North and South in new ways?
 2NC AT: Aff Boosts Growth
Boosting growth IS THE LINK!
We control uniqueness—Econ, jobs, investment—gradual rate hikes keep it goldilocks
Chandra 3/9
Shobhana Chandra, Bloomberg Finance, Bloomberg Wire Service, U.S. Added 313,000 Jobs in February;
Wage Gains Cool to 2.6%, 09 Mar 2018, ProQuest

The U.S. economy enjoyed the biggest hiring spree since mid-2016 in February as workers streamed in
from the sidelines of the labor force, but inflation pressures remained muted amid signs the pay gains
that spooked financial markets last month haven’t taken hold. Payrolls rose 313,000 in February,
compared with the 205,000 median estimate in a survey of economists, and the two prior months were
revised higher by 54,000, Labor Department figures showed Friday. The jobless rate held at 4.1 percent,
the fifth straight month at that level. Average hourly earnings increased 2.6 percent from a year earlier
following a downwardly revised 2.8 percent gain. U.S. stock futures and bond yields rose, as the report
signaled the labor market remains strong and will keep driving economic growth. The wage figures
show a cooling from a pace that spurred financial turbulence last month on concern that the Federal
Reserve could raise interest rates faster. While the unemployment rate remains well below Fed
estimates of levels sustainable in the long run, the rise in participation suggests the presence of slack
that would keep policy makers to a gradual pace of hikes. “This is a report that’s going to strengthen
the argument of some of the doves on the Fed, that people came back to the labor force last month --
that’s a positive sign for the U.S. economy,” Alan Krueger, a Princeton University professor who served
as chairman of the Council of Economic Advisers under President Barack Obama, said on Bloomberg
Television. “We’ll see how long that can continue.” For now, rising labor-force participation may be a
factor holding down wage gains. The participation rate increased to 63 percent, the highest since
September, from 62.7 percent the prior month, the biggest monthly gain since 2010. The number of
employed people in the workforce rose by 785,000, according to the report. Powell’s Debut Fed policy
makers are widely anticipated to raise interest rates when they next meet March 20-21 in Jerome
Powell’s first gathering as chairman. A bigger question is whether central bank officials maintain
projections for a total of three quarter-point hikes this year, or boost the outlook to four. Average
hourly earnings rose 0.1 percent from the prior month following a 0.3 percent increase, the report
showed. In the 12 months ended in February, analysts had forecast a monthly gain of 0.2 percent and an
annual increase of 2.8 percent. Employees worked more hours last month, which also may have played
a role in the wage numbers. The average workweek for all private employees increased to 34.5 hours,
from 34.4 hours. The initial data for January had shown a shorter workweek of 34.3 hours, which had
the effect of boosting average hourly pay. What Our Economists Say The jobs report shows healthy
economic conditions at the start of the year, as reflected in both the magnitude of gains as well as the
healthy dispersion of job creation. The rebound in the workweek and solid payroll print provide strong
indications that the economy is poised to buck the trend of recent years, whereby GDP growth was soft
in the first quarter, rebounded in the second quarter and leveled out in the second half -- a pattern
economists call “residual seasonality.” Thanks to the fiscal stimulus from tax reform, this seasonality is
unlikely to recur in 2018. -- Carl Riccadonna, Bloomberg Economics A separate gauge was more positive
for wage growth. Average hourly earnings for just production and non-supervisory workers rose 2.5
percent from a year earlier, following a 2.4 percent gain in January. Hiring was strong across the board
and particularly in goods-producing industries. Construction businesses added 61,000 jobs, while
factories boosted payrolls by 31,000. Service providers added 187,000 workers, including about 50,000
in retail, a sector that has been under pressure. “The upturn in the U.S. labor market will continue, with
the effect of the tax reform, the weak U.S. dollar, interest rates are still low, and I expect more
investment,” said Dirk Chlench, head of bond research at Landesbank Baden-Wuerttemberg. He had
estimated 300,000 job gains, the highest projection in Bloomberg’s survey. “There’s every reason to be
optimistic about the U.S. economy." Growth in worker pay has been modest during most of this
expansion, especially relative to how tight the job market is running. President Donald Trump has said
the tax-cut legislation he signed in December will spur economic growth and boost jobs and wages. At
the same time, his tariffs on steel and aluminum imports may become a headwind depending on how
extensively they’re implemented and how other nations retaliate. Other Details The U-6, or
underemployment rate, was unchanged at 8.2 percent; measure includes part-time workers who’d
prefer a full-time position and people who want a job but aren’t actively looking People working part-
time for economic reasons rose by 171,000 to 5.16 million Private employment rose by 287,000 (median
estimate 205,000) after increasing 238,000; government payrolls rose by 26,000.

Overheat independently escalates - creates unique diversionary war pressures – slow

growth is key
Sharma 17
RUCHIR SHARMA is Chief Global Strategist and Head of Emerging Markets at Morgan Stanley Investment
Management and the author of The Rise and Fall of Nations: Forces of Change in the Post-Crisis World,
Foreign Affairs, May/June 2017, “The Boom Was a Blip: Getting Used to Slow Growth”, Vol. 96, Iss. 3, p.
104-114

In an ideal world, political leaders would recognize this new reality and dial back their ambitions
accordingly. Instead, many governments are still trying to push their economies to reach unrealistic
growth targets. Their desperation is understandable, for few voters have accepted the new reality
either. Indeed, many recent elections have punished establishment politicians for failing to do more,
and some have brought to the fore populists who promise to bring back the good times.

This growing disconnect between the political mood and the economic reality could prove dangerous.
Anxious to please angry publics, a number of governments have launched radical policy experiments
designed to revive economic growth and increase wages, or to at least spread the wealth more
equitably-even though such plans are likely to fail, since they often rely on heavy spending that is liable
to drive up deficits and spark inflation, leading to boom-and-bust swings. Even worse, some leaders are
trying to use nationalism-by scapegoating foreigners or launching military adventures-to divert the
public’s attention from the economy altogether.

Depopulation, deleveraging, and deglobalization need not hurt everyone; in fact, they will benefit
certain classes of countries, companies, and people. To respond properly to these trends, governments
need to plan for them and to manage public expectations. So far, however, few leaders have shown the
ability-or even the inclination-to recognize the new economic reality.

MORE OR LESS

The emergence of the Three Ds represents an epochal reversal in the story of global development,
which for decades prior to the Great Recession was a tale of more: more people, more borrowing, and
more goods crossing borders. To understand why the plot took such an unexpected turn, it’s helpful to
consider the roots of each trend.

Depopulation was already under way prior to the economic meltdown. During the postwar baby boom,
the annual rate of growth in the global population of working-age people nearly doubled, from one
percent in the mid-1950s to over two percent by 1980. This directly boosted economic growth, which is
a simple function of how many people are joining the work force and how rapidly their productivity is
increasing. By the 1980s, however, signs that the boom would fade had begun to appear, as women in
many countries began to bear fewer children, in part because of the spread of contraception. As a
result, the annual growth rate of the global working-age population started to fall in stages, with a sharp
drop after 2005. By 2016, it had dropped all the way back to just one percent. In the United States,
growth in the working-age population declined from 1.2 percent in the early years of this century to just
0.3 percent in 2016-the lowest rate since the un began recording this statistic in 1951.

The un now predicts that worldwide, population growth rates will continue to decline through 2025 and
beyond. Such long-term forecasts, which are based on a relatively simple combination of birth and
death rates, have an excellent track record. And the economic implications of that trend are clear: every
percentage point decline in workingage population growth shaves an equally large chunk off the gdf
growth rate.

In the 1950s and 1960s, the baby boom provided a massive boost to the global economy, as did
increases in productivity rooted in large measure in technological advances. As productivity growth
slowed in the subsequent decades, however, easy money started to take its place as an economic spur.
Beginning in the early 1980s, central banks began to win the war on inflation, which allowed them to
lower interest rates dramatically. Until that point, borrowing and economic growth had moved in
tandem, as is the norm in a capitalist system; for decades, global debt had grown in line with global gdf.
But as falling interest rates lowered the cost of borrowing to near zero, debt surged from 100 percent of
global gdp in the late 1980s to 300 percent by 2008. Although some of this borrowed money was wasted
on speculation, much of it went to fuel business activity and economic growth.

Then came the global financial crisis. Regulations issued in its wake limited the risks that U.S. and
European banks could take both in their domestic markets and overseas. In 2008, global capital flows-
which are dominated by bank loans-stood at 16 percent of global GDP. Today, those flows hover at
around two percent of global gdf-back to where the abiiity or even the they were in the early 1980s.
Meanwhile, inclination-to recognize many Private and lenders the new economic reality. have been
paralyzed by “debt phobia,” __ which has prevented new lending despite the fact that interest rates are
at record lows. The only country where borrowing has continued to grow rapidly is China, which did not
develop a fear of debt because it remained insulated from the financial crisis in 2008. But globally, since
interest rates can hardly drop any further, a new debt boom is extremely unlikely.
Globalization is not likely to revive quickly, either. The last time that cross-border flows of money and
people slowed down was in 1914, at the onset of World War I. It took three decades for that decline to
hit bottom, and then another three decades for flows to recover their prewar peaks. Then, in the early
1980s, many countries began to open their borders, and for the next three decades, the volume of
cross-border trade doubled, from the equivalent of 30 percent of global gdf in 1980 to 60 percent in
2008. For many countries, export industries were by far the fastest-growing sector, lifting the overall
growth rate of the economy.

In the wake of the recession, however, consumers have cut back on spending, and governments have
started erecting barriers to goods and services from overseas. Since 2008, according to the Centre for
Economic Policy Research’s Global Trade Alert, the world’s major economies have imposed more than
6,000 barriers to protect themselves from foreign competition, including “stealth” measures designed to
dodge trade agreements. Partly as a result of such policies, international trade has fallen back to the
equivalent of 55 percent of global gdf. This trend is likely to continue as populists opposed to
globalization move to further restrict the movement of goods and people. Witness, for example, one of
Trump’s first moves in office: killing the Trans-Pacific Partnership (tff), a 12-nation deal that was
designed by Trump’s predecessor to assure that American-style free-market rules would govern trade in
Asia.

WELCOME TO THE DESERT OF THE REAL

Depopulation, deleveraging, and deglobalization have become potent obstacles to growth and should
prompt policymakers in countries at all levels of development to redefine economic success, lowering
the threshold for what counts as strong annual gdf growth by a full percentage point or two. Poorer
countries tend to grow faster, because they start from a lower base. In countries with average annual
incomes of less than $5,000, such as Indonesia, a gdf growth rate of more than seven percent has
historically been considered strong, but that number should come down to five percent. For countries
with average annual incomes of between $5,000 and $15,000, such as China, four percent gdf growth
should be considered relatively robust. For developed nations such as the United States, with average
annual incomes above $25,000, anything over 1.5 percent should be seen as healthy.

This is the new reality of economic success. Yet few, if any, leaders understand or accept it. Given the
constraints imposed by the Three Ds, the economies of China, India, Peru, the Philippines, Poland, and
the United States are all growing at what should be considered healthy rates. Yet few citizens or
policymakers in those countries seem satisfied with the status quo. In India, where the economy is now
growing at a pace between five and six percent, according to independent estimates, elites still fantasize
about hitting eight or nine percent and becoming the next China. The actual China, meanwhile, is still
taking on ever more debt in an effort to keep its growth rate above six percent. And in the United
States, Trump has talked of somehow getting the already fully developed U.S. economy to grow at four,
five, or even six percent a year.

Such rhetoric is creating an expectations gap. No region of the world is growing as fast as it was before
2008, and none should expect to. In 2007, at the peak of the pre-crisis boom, the economies of 65
countries- including a number of large ones, such as Argentina, China, India, Nigeria, Russia, and
Vietnam-grew at annual rates of seven percent or more. Today, just six economies are growing at that
rate, and most of those are in small countries such as Côte d’Ivoire and Laos. Yet the leaders of many
emerging-market countries still see seven percent annual gdf growth as the benchmark for success.
THE POPULIST MOMENT

“What’s wrong with ambition?” some might object. The answer is that pushing an economy to sustain
speeds beyond its potential is like persistently gunning a car’s engine: it may sound cool, but eventually
the motor will burn out. And if buyers are promised a muscle car but find themselves stuck in a broken-
down family sedan, they will turn on the dealer.

In the last year, numerous leaders once considered rising stars, such as Mexico’s Enrique Peña Nieto and
Italy’s Matteo Renzi, have seen their approval ratings tumble and, in Renzi’s case, have been forced out
of office after their reform plans failed to deliver as promised. Normally, incumbent politicians enjoy an
advantage on election day, but not during antiestablishment revolts, such as the one occurring now. In
2009, in the 50 most populous democracies, the governing party won 90 percent of elections at the
national level. Since then, the success rate of ruling parties has fallen steadily, to just 40 percent last
year.

The beneficiaries of this shift have often been populist and nationalist leaders who have cast doubt on
the central tenets of the liberal postwar order. Figures such as Trump, Prime Minister Theresa May in
the United Kingdom, and the right-wing leader Marine Le Pen in France have encouraged people to
question the so-called Washington consensus-that is, the belief that there is an intrinsic link between
global free markets and rising prosperity-which was an article of faith in the United States and other
Western countries for decades.

Many of these same politicians promise more muscular leadership in the name of promoting their
countries’ interests, and publics have shown themselves to be increasingly open to such appeals. The
World Values Survey polled citizens of 30 large countries in the late 1990s and then again in the first five
years of the current decade, asking, among other things, whether “having a strong leader who does not
have to bother with parliament and elections” would be good for their country. In 25 of the surveyed
countries, the share of people who said they would prefer authoritarian rule to democracy rose. The
figure increased by 11 percentage points in the United States, 24 percentage points in Russia, and 26
points in India, where the number now stands at a stunning 70 percent. Even more striking, the decline
in support for democracy was sharper among young people than among the old.

Many leaders are responding to this shift by embracing protectionist policies and by intervening more
aggressively in markets. One of the main reasons for British voters’ surprising 2016 decision to leave the
eu was a popular desire, whipped up by populists, to “retake control” of national borders and trade
policy. Now the Washington consensus is under attack even in Washington. In the name of his “America
first” agenda, Trump has begun publicly demanding that private companies build with U.S.sourced
materials and threatening to change the tax code to explicitly favor exports over imports. This
willingness to scrap postwar economic orthodoxy has extended into emerging markets as well. Although
Indian Prime Minister Narendra Modi was once a darling of the free-market crowd, he has recently
begun to defy its preferences, most recently by deciding to withdraw 86 percent of the paper currency
in circulation in India, virtually overnight, as a way to punish wealthy tax dodgers.

Such policies stand little chance of accomplishing the larger goal: bringing back a period of broad
prosperity. Indeed, populist experiments will likely do more harm than good, in part by threatening the
victory in the war on inflation that governments won in the 1980s and have sustained ever since, as
tighter central bank policies have combined with intensifying international competition to put a lid on
prices. If countries pursue insular, protectionist policies, decreased foreign competition will likely
remove that lid. Populist proposals to boost growth by increasing government spending could also push
prices up, especially if the economy is already running close to full capacity, as it is in the United States
right now. That is why expectations for U.S. inflation have risen markedly since Trump took office.

Populist spending might indeed drive up growth for a year or so, but it would come at the expense of
higher deficits and rising inflation. That would force central banks to raise interest rates faster than
expected, triggering a downturn. Trump’s call for significant new spending on roads and bridges has
proved broadly popular, but the timing is all wrong.

The U.S. economy is already in the eighth year of a recovery, which means the need for stimulus
spending has passed. And the Trump plan would push the U.S. budget deficit, which is already at
unprecedented levels, even higher. At this stage, Washington should be building a surplus-money it will
need when the next recession inevitably hits. But the idea of saving for a rainy day seems quaint at a
time when disgruntled voters are demanding an economic revival. The U.S. economy is already growing
in line with its potential rate of 1.5 to two percent, yet most politicians seem to share the public’s
disappointment and eagerness for more.

WINNERS AND LOSERS

The slowdown in global flows of goods, money, and people has affected more than just national politics
and policymaking: it has also rearranged the international balance of economic power. Before 2008,
emerging economies sought to export their way to prosperity. But that model has become less effective
as the competitive edge once enjoyed by major exporters, such as South Korea and Taiwan, has begun
to shift to countries that can grow by selling to their own large domestic markets, such as Indonesia or
Poland.

At the same time, countries that got ahead by specializing in outsourced labor will probably see their
advantage dwindle. India has seen cities such as Bangalore emerge as incubators of the country’s rising
middle class, spurred by opportunities at global outsourcing firms. The same goes for the Philippines,
where call centers did not exist at the turn of the millennium but have exploded into a $22 billion
industry employing more than one million people. As globalization retreats, however, outsourcing is
likely to decline, and Trump’s tax plans, designed to bring companies and jobs back to the United States,
will accelerate this shift.

Economic advantages are also moving away from big multinationals and toward smaller, domestically
focused companies that rely less on exporting goods and importing or outsourcing labor. As borders
tighten and it becomes harder to fill positions with foreign employees, workers in developed economies
such as the United States will gain more bargaining power. For much of the postwar era, the share of
U.S. national income that went to workers declined, in large part because many companies cut labor
costs by shifting jobs abroad. Meanwhile, the share of national income going to corporate profits rose
steadily, to a peak of ten percent in 2012. Since then, however, the corporate share has started to drop
and the workers’ share has begun inching up.

Border restrictions and aggressive government intervention in markets are nonetheless likely to slow
the global economy. Reduced competition tends to undermine productivity, one of the key drivers of
growth. As leaders attempt to grab a greater share of the global pie for their countries, their combined
efforts will wind up shrinking the pie itself.

I'M A SURVIVOR

So what will happen when populists and nationalists fail to deliver faster growth? One might expect
everything to come crashing down around them. In fact, history shows that canny populists can survive
such outcomes. But the tactics they tend to use often stoke international instability, as the cases of
Russia and Turkey demonstrate.

When Russian President Vladimir Putin came to power in 2000, his basic promise was that he would
make Russia great again by reviving its economy. Thanks largely to rising prices for Russia’s top exports,
oil and gas, average annual income increased tenfold over the next decade, to the equivalent of
$15,000. Putin reaped the benefits, basking in unprecedented levels of public support. But in 2014,
energy prices collapsed, setting off a recession, and average annual income fell to just $9,000. Putin
suddenly seemed politically vulnerable.

To deflect attention from the downturn, Putin embarked on a series of foreign adventures: invading and
annexing Crimea, fomenting a pro-Russian insurrection in eastern Ukraine, and launching a military
intervention to support the embattled Assad regime in Syria. By playing the nationalism card and casting
himself as the hero of a campaign to restore Russian prestige and power, Putin has avoided suffering the
fate of so many other establishment politicians. Despite Russia’s continued economic struggles, his
approval rating remains above 80 percent.

Like Putin, Turkish President Recep Tayyip Erdogan is also well into his second decade in power despite
the fact that he presides over a sputtering economy. Erdogan’s ideas about economics are distinctly
unconventional: he has claimed, for example, that raising interest rates-a standard antidote to inflation-
is in fact a cause of inflation. Turkey faces a crippling mix of rising deficits, accelerating inflation, and
slow growth. Yet the latest polls put Erdogan’s approval rating at close to 70 percent, in part because
Erdogan has managed to convince many Turks that the United States and the eu are the masterminds of
a conspiracy to weaken Turkey. When military officers launched a coup attempt against him last year,
Erdogan claimed that the plot was “written abroad,” and members of his government accused the cia
and the fbi of involvement-an accusation that Washington denies but that most Turks believe, according
to polls.

This trick-diverting attention from economic troubles by launching foreign adventures or by

scapegoating foreign cabals and enemies within-is as old as politics. But Putin’s and Erdogan’s success
with such tactics will only make other leaders more willing to take similar measures when they find
themselves unable to deliver on promises of renewed prosperity. The resulting wave of nationalist
antagonism and aggression will stoke geopolitical tensions, especially at a time when Washington’s
commitment to upholding the liberal international order seems to be wavering.
 Ext-Growth Link
Current hikes are gradual and growth is slow but steady - Further boost to growth /
investment / labor / inflation forces quick rate hikes to combat overheating
Lane, 18
(Sylvan Lane, I have covered financial regulation, the economy, financial technology and sanctions for
The Hill since December 2015. I've been covering Congress and politics for three years, previously for
The Boston Globe and Dallas Morning News, and have previously written about technology, science, the
environment and cybersecurity., “Powell: Growing economy may affect Fed rate hike forecast”, 2018,
http://thehill.com/policy/finance/375751-powell-will-promise-balance-with-interest-rates-growing-
economy VBM)

Federal Reserve Chairman Jerome Powell on Tuesday said increasing economic growth may impact how
many times the central bank expects to raise interest rates this year.

Powell said that rising wage growth, business investment and pressures on inflation could push officials
toward a quicker path for interest rate increases. He said that Fed officials are currently forming their
economic outlooks for the bank's March meeting, but wouldn't assume how they'd change.

"What we’ve seen is incoming data that suggests a strengthening of the economy,” Powell told the
House Financial Services Committee on Tuesday.

“Each of us is going to be taking the developments since the December meeting into account," Powell
said. “I don’t want to prejudge that projection.”

Powell promised lawmakers that the Fed will keep a careful eye on inflation as the bank prepares to hike
interest rates in a strengthening economy.

[mosads]

Powell's appearance before the panel comes as Fed observers try to predict how the bank will act on
interest rates this year and the direction the bank sees the economy going.

The Fed has forecasted three rates hikes in 2018, the first of which will likely occur next month.

The U.S. is near full employment and the tight labor market is finally starting to drive up wage growth
and prices. The Fed is aiming to raise rates quickly enough to prevent the economy from overheating
but wants to keep from short-circuiting the financial markets.

“We are all rooting for you, for much is at stake," House Financial Services Committee Chairman Jeb
Hensarling (R-Texas) said.

“Now more than ever, the Fed must commit to a credible, orderly and well-communicated
normalization plan.”

Powell said the Fed will "continue to strike a balance between avoiding an overheated economy and
bringing PCE price inflation to 2 percent on a sustained basis."
Fed officials have largely predicted that inflation will rise as the economy continues to grow and low
unemployment pushes wages higher. The central bank also expects the economy to expand at a greater
pace due to the $1.5-trillion tax cut passed at the end of 2017.

Powell said that the U.S. is enjoying "solid growth and a strong labor market," and pointed to increases
in consumer spending, wage growth, demand for U.S. exports and business investment.

He said that the labor force participation rate had remained unchanged, an encouraging sign given the
mass departure of baby boomers from the workforce.

Lawmakers argued along party lines over whether former President Obama or President Trump were
responsible for 2017's solid economic growth that has appeared to continue in 2018.

Democrats said the U.S. economy was still running on Obama-era policies and impacts, while the GOP
attributed the growth to its tax bill and deregulatory agenda.

Powell said the economic outlook "remains strong."

"The robust job market should continue to support growth in household incomes and consumer
spending, solid economic growth among our trading partners should lead to further gains in U.S.
exports, and upbeat business sentiment and strong sales growth will likely continue to boost business
investment," Powell said.

Republicans asked Powell to confirm that their tax plan, which dropped the corporate income tax rate
from 35 to 21 percent, would boost wages and economic growth. The chairman said that tax cuts should
lead to wage growth through a boost to labor productivity from higher business investment but that it's
hard to put a number on the impact.

Powell avoided taking a hard position on how the GOP tax plan would impact the debt but warned
about the general dangers posed by consistent federal deficits.

Democrats pressed Powell on using his influence to tackle the higher rate of minority versus white
unemployment, the gender pay gap, and racial discrimination in lending. Powell repeatedly agreed that
those problems should be tackled, but that the Fed didn’t have the tools to do it.

Several Democrats asked Powell to consider raising the target inflation rate and delaying interest rate
hikes to boost further economic expansion and wage growth. While the economy is close to full
employment, those lawmakers insisted that easier financial conditions would help bring down
unemployment among blacks and Hispanics.

Powell insisted that the Fed needed to take a careful approach to moderating inflation.

‘We’ve reached the point where the risks are two-sided now, and we need to keep that in mind,” Powell
said. “That’s why we’re raising rates on a gradual path.”
 AT: Inflation Good
Inflation is bad
Dorfman 16 Jeffrey Dorfman, August 19, 2016, Forbes, “Inflation is Still Bad for the Economy”,
https://www.forbes.com/sites/jeffreydorfman/2016/08/19/inflation-is-still-bad-for-the-
economy/#495e67724340

A new paper providing some empirical evidence that one of inflation’s claimed negative economic
effects might not exist is being used as justification by economic commenters such as Nick Bunker to call
for more inflation in hopes of spurring more economic growth. While one particular cost of inflation
(increased price dispersion) may not exist, inflation still has plenty to recommend against it. If
anything, the Federal Reserve should lower their inflation target to or near zero, not raise it above the
current two percent per year goal.

First, the point in question is whether high inflation also leads to increased price dispersion. This would
mean finding some prices jumping by large absolute amounts and generally finding more variation in the
cost of the same good or service. For example, when oil prices are rising (or falling) rapidly, you might
find greater variability in the price of gas at the pump because station owners are having a hard time
finding the equilibrium price for their gas and because consumers have a hard time keeping track of
what the “right” or “fair” price is. Such price variation places expensive search costs on consumers (we
need to spend time finding the best gas station to go to) and on businesses (which need to find the right
price to charge).

The new paper in question suggests that consumers and business do a much better job than economists
thought even at fairly high inflation rates such as we experienced in the U.S. during the Carter
administration. This means that inflation doesn’t lower national well-being as much as we thought.
However, that is only one cost of inflation and not one of the most important ones to everybody except
a group of New Keynesian model builders rather detached from the real world. Rather, the main reasons
to avoid inflation are its impact on savers relative to borrowers, its upward pressure on the cost of
credit, and its effect on capital investment levels.

Inflation makes a big difference to savers and borrowers. For savers, inflation is a tax on your wealth; for
borrowers, it is a subsidy as you get to pay back your loans using dollars that are worth less. Obviously
interest rates are set to hopefully account for this, but that is based on expected inflation. When actual
inflation is higher or lower than expected, somebody wins.

Higher inflation is good for the borrowers. Thus, raising the Fed’s inflation target, if they could then hit
that higher target, would be a boon to all with existing loans that were made under lower inflation
expectations. The biggest winner would be the federal government, of course, but many other people
with lots of debt and few assets would come out ahead.

Raising interest rates to combat inflation will hurt the economy

EPI 16 Economic Policy Insititute (Press Release), May 5, 2016, “Raising Interest Rates is a Terrible Way
to Fight Bubbles, Especially Imaginary Ones”

Usual debates over the pace and timing of interest rate increases concern balancing the benefits of a
tighter labor market against the costs of accelerating inflation. Because wage and price inflation both
remain remarkably subdued, the case for quickly raising interest rates anytime soon is quite weak.
Recently, the case that higher interest rates are necessary for avoiding the type of bubbles that caused
the recessions of 2001 and 2008 has been thrown into current debates. Kansas City Federal Reserve
President Esther George is the most prominent current policymaker to recently make this argument.

“If we attack bubbles with higher interest rates, we will do little to slow the bubble and a lot to damage
the real economy. Interest rate increases are bad tools for bubble fighting, and are mostly good tools for
slowing growth and blocking further progress in reducing unemployment,” said Bivens. “Instead of going
straight for the shotgun, we should look at more precisely targeted tools for controlling bubbles.”

The authors highlight data showing that low interest rates were not a significant cause of the housing
bubble in the early 2000s. First, the timing of interest rate changes and home price growth is much less
clear-cut than commonly thought. Second, international data makes a compelling case that high interest
rates would not have prevented the housing bubble—other countries with relatively tighter interest rate
policies nevertheless experienced housing bubbles at the same time the United States did. Third, the
authors survey research indicating that higher interest rates are much more effective at slowing
economic growth and increasing unemployment than containing bubble-inflated home prices.
Ultimately, the scale of interest rate increases that would have been necessary to significantly reduce
home price growth during that time would have led to sharply higher unemployment.

Bivens and Baker provide a list of alternative tools that policymakers should use if an economically
important bubble were to re-appear. Chief among these tools is one commonly cited as important in
other aspects of Federal Reserve policymaking: communication.

“Communication issued by the Federal Reserve is hugely influential in shaping financial markets. It
should be no different when it comes to preventing bubbles, yet the Federal Reserve was silent leading
up to the crash while the bubble grew to ever more dangerous proportions,” said Baker. “They should
use their communication channels to give people information about shrinking, or at least slowing,
bubbles before thinking about raising interest rates.”

Other tools available to the Fed to contain asset bubbles are deleveraging and supervision. The Fed
could deleverage demand for assets in response to a growing bubble with focused regulatory tools. If
the bubble is in housing, they could increase the share of a home’s price that must be paid up front. And
finally, the Federal Reserve can better supervise financial institutions to make sure that these
institutions themselves do not become overleveraged or illiquid enough to either enable bubbles or
amplify the effects of bursting bubbles.

“While there’s no obviously significant bubble in the economy right now, bursting asset market bubbles
have caused the last two American recessions,” said Bivens. “Fighting the formation of these bubbles is
serious business, but invoking bubbles as an argument to raise interest rates today is not a serious
way of addressing this concern.”
Aff
 2AC Hikes Inev
Fed already hiking too fast
Schneider, 18
(Howard Schneider, Federal Reserve reporter at Thomson Reuters, Twenty five years with the
Washington Post including three tours overseas, stints as an editor, and international economics
correspondent. Now with Washington bureau of ThomsonReuters covering the U.S. Federal Reserve.
Tucked in there was a stint on the faculty at the American University in Cairo. Dabbled in health and
fitness writing at the Post, and some science writing for National Geographic., “Fed's Bullard says
'substantially' higher rates risk overly tight policy”, 2018, https://www.reuters.com/article/us-usa-fed-
bullard/feds-bullard-says-substantially-higher-rates-risk-overly-tight-policy-idUSKCN1GA1UW VBM)

WASHINGTON (Reuters) - An era of low productivity growth and high world demand for safe assets may
be anchoring central bank policy rates at a low level, St. Louis Federal Reserve President James Bullard
said on Monday. If the Fed continues to hike short-term rates, he said, the result could be policy that is
too tight for the current economy. The current federal funds target of between 1.25 and 1.5 percentage
points is “within the range” of policy rule recommendations that account for a neutral rate of interest
held down by several slow-to-change factors, he said. “If the Committee raises the policy rate
substantially from here without other changes in the data, the policy setting could become restrictive,”
Bullard said. The Federal Open Market Committee is expected to raise interest rates at its March
meeting and at least two other times this year, according to the most recent policymaker forecasts in
December. “I have been a little bit concerned that the committee goes too far too fast,” Bullard said. “If
we are going to do a lot of rate hikes we have to have data that supports that.

Tax cuts trigger the DA

Borak 1/11/18 – the Federal Reserve reporter for American Banker (Donna, “Tax cuts risk overheating
U.S. economy, warns Fed official.” http://money.cnn.com/2018/01/11/news/economy/ny-fed-
economy-outlook-2018/index.html)

New York Federal Reserve President William Dudley is worried new tax cuts could risk overheating the U.S.
economy in the next few years.
Economic prospects in 2018 are looking "reasonably bright," Dudley said in a speech to the Securities and Financial Markets Association on
Thursday. He expects unemployment to remain low and wages to quickly rise.

But Dudley warned that central

bankers may have to "press harder on the brakes" at some point in the next few
years to help stave off a possible recession.

Dudley said faster

economic growth from tax cuts when the labor market is healthy and lending is cheap
could cause the economy to grow too quickly. He has previously called the tax cuts unnecessary at a time
when the economy is already growing at a steady pace, which is likely to help increase inflation over time.

If the economy grows too fast, he said the Fed will have to raise interest rates faster than expected. That could make
borrowing money more expensive -- the federal funds rate helps determine lending rates.
US consumer spending low in may while inflation speeds up
Crutsinger ’18 [Martin Crutsinger is an Ap Economics Writer; “US consumer spending weak in May,
while inflation speeds up”; June 29, 2018; https://www.sfgate.com/news/article/US-consumer-
spending-grew-just-0-2-percent-in-May-13036870.php]
WASHINGTON (AP) — U.S consumers increased their spending just 0.2 percent in May , a disappointing result after two
months of much stronger gains. Meanwhile, inflation — as measured by a gauge monitored by the Federal Reserve — rose at the
fastest pace in six years. The Commerce Department said Friday that the tiny rise in spending last month followed much stronger
increases of 0.6 percent in March and 0.5 percent in April. It was the poorest showing since spending had fallen 0.1 percent in
February. Inflation, by a gauge that is preferred by the Federal Reserve, was up 0.2 percent in May and 2.3 percent over the
past 12 months. That is the fastest 12-month pace since 2012 and stands above the Fed's optimal target of 2 percent annual
inflation gains. However, the central bank has signaled that it is willing to let inflation run above 2 percent for a time,
given that it had fallen short of that mark for six years. The Fed in June boosted its benchmark rate for a second time this year and projected
that it would raise rates four times this year. Analysts said that the rise in inflation seen in Friday's report should keep the Fed on track. Media:
Euronews Consumer spending accounts for 70 percent of economic activity, and economists are counting on solid
gains to propel growth after a slow start to the year . But the weak May reading on spending may call that forecast into question.
In advance of the report, many economists had been looking for a more robust increase of around 0.5 percent in
spending. After Friday's report on spending, economic forecasting firm Macroeconomic Advisors trimmed its tracking forecast for second
quarter GDP growth from an annual rate of 5.4 percent to a still-strong 4.8 percent. But other economists said projections that the
first quarter's 2 percent growth rate would double to 4 percent or better might prove too optimistic . "Right now, the extended period
of strong growth that so many are predicting is just a wish and a hope," said Joel Naroff, chief economist at Naroff Economic Advisors. "I am not
saying that the tax cuts are having no impact on growth... but as of now, I think the added spending has been disappointing." Incomes grew
a solid 0.4 percent in May, supported by strong growth in wages and salaries. Some analysts argued that the weak
spending gain seen in May was heavily influenced by a drop in spending on utility bills that reflected milder weather during the month. They
predicted a rebound in June when spending on utilities returned to more normal levels. With the income gain outpacing the increase in
spending, the saving rate rose to 3.2 percent of after-tax incomes in May, up from 3 percent in April.

Inflation, hikes, and collapse inev

Lachman 18 (Desmond is a resident fellow at the American Enterprise Institute. He was formerly a
deputy director in the International Monetary Fund’s Policy Development and Review Department and
the chief emerging market economic strategist at Salomon Smith Barney – “A Crisis Is Coming,” February
14, 2018 - https://www.usnews.com/opinion/economic-intelligence/articles/2018-02-14/us-economy-
is-in-danger-of-overheating-and-exploding-into-financial-crisis)///JP

My long career as a macro-economist both at the IMF and on Wall Street has taught me that it is very
well to make bold macro-economic calls as long as you do not specify a time period within which those
calls will occur. However, there are occasions, such as today, when the overwhelming evidence suggests
that a major economic event will occur within a relatively short time period. On those occasions it is very
difficult to resist making a time-sensitive bold economic call. So here goes. By this time next year, we will
have had another 2008-2009 style global economic and financial market crisis. And we will do so despite
Janet Yellen's recent reassurances that we would not have another such crisis within her lifetime. There
are two basic reasons to fear another full-blown global economic crisis soon: The first is that we have in
place all the ingredients for such a crisis. The second is that due to major economic policy mistakes by
both the Federal Reserve and the U.S. administration, the U.S. economy is in danger of soon
overheating, which will bring inflation in its wake. That in turn is all too likely to lead to rising interest
rates, which could very well be the trigger that bursts the all too many asset price bubbles around the
world. A key ingredient for a global economic crisis is asset price bubbles and credit risk mispricing. On
that score, today's financial market situation would appear to be very much more concerning than
that on the eve of the September 2008 Lehman-bankruptcy. Whereas then, asset price bubbles were
largely confined to the U.S. housing and credit markets, today, asset price bubbles are more pervasive
being all too much in evidence around the globe. It is not simply that global equity valuations today are
at lofty levels experienced only three times in the last one hundred years. It is also that we have a global
government bond market bubble, the serious mispricing of credit risk in the world's high yield and
emerging market corporate-bond markets and troublesome housing bubbles in major economies like
Canada, China and the United Kingdom. Another key ingredient for a global economic crisis is a very high
debt level. Here too today's situation has to be very concerning. According to IMF estimates, today the
global debt-to-GDP level is significantly higher than it was in 2008. Particularly concerning has to be
the fact that far from declining, over the past few years Italy's public debt has risen now to 135 percent
of GDP. That has to raise the real risk that we could have yet another round of the Eurozone debt crisis
in the event that we were to have another global economic recession. Today's asset price bubbles have
been created by many years of unusually easy global monetary policy. The persistence of those bubbles
can only be rationalized on the assumption that interest rates will remain indefinitely at their currently
very low levels. Sadly, there is every reason to believe that at least in the United States, the period of
low interest rates is about to end abruptly due to an overheated economy. The reason for fearing that
the U.S. economy will soon overheat is not simply that it is currently at or very close to full employment
and growing at a healthy clip. It is rather that it is also now getting an extraordinary degree of monetary
and fiscal policy stimulus at this very late stage of the cycle. Today, U.S. financial conditions are at their
most expansionary levels in the past 40 years due to the combination of very low interest rates,
inflated equity prices and a weak dollar. Compounding matters is the fact that the U.S. economy is now
receiving a significant pro-cyclical boost from the unfunded Trump tax cut and from last week's two-year
congressional spending pact aimed at boosting military and disaster-relief spending.
 1AR Hikes Inev
Fed plans to hike rates faster, ALREADY seen as signal towards restrained policy
Borak 18
(Donna Borak, Donna Borak is a senior economics writer for CNNMoney, where she reports on
regulatory and economic policy. Her work has spanned everything from the unprecedented steps taken
by the Trump administration to roll back regulations on U.S. businesses and Wall Street banks to the
Treasury Department’s economic sanctions on North Korea., “The Federal Reserve plans to hike interest
rates even faster”, 2018, https://money.cnn.com/2018/04/11/news/economy/fed-rate-hike/index.html
VBM)

Buoyed by a strengthening economy and increased confidence that the Federal Reserve will reach its
inflation target in the near future, central bank policymakers suggested the path of future rate hikes
could be "slightly steeper" over the next few years than previously thought, according to minutes of
their March meeting released on Wednesday. "Members agreed that the strengthening in the economic
outlook in recent months increased the likelihood that a gradual upward trajectory of the federal funds
rate would be appropriate," according to the minutes. In March, the Fed lifted the federal funds rate to
a range of 1.5% to 1.75%. That was an increase of a quarter of a percentage point. The Fed's target rate
helps determine rates for mortgages, credit cards and other borrowing. According to the minutes, there
was some debate by policymakers on whether to delay raising rates to a later meeting to send a strong
signal to investors that monetary policy decisions would be based on incoming economic data. But they
ultimately agreed to press ahead. It was the sixth increase since December 2015, when the Fed started
tightening monetary policy for the first time after the financial crisis. Rates are still extremely low by
historical standards. Fed officials were split on whether last month's policy meeting was the appropriate
time to announce a fourth rate hike in 2018. The Fed has signaled it would raise rates three times this
year. At the March meeting, the Fed hinted it would favor a more aggressive pace to keep the economy
humming in the coming years. It also shifted its plans to raise interest rates for next year, calling for
three more rate hikes instead of two. Nearly half of FOMC members, at the time, said they believed that
would be necessary to raise rates faster if the economy keeps performing as well as they expect. A
hastened pace of interest rate hikes prompted some policymakers to suggest the possibility of revising
the Federal Open Market Committee's statement "at some point" to acknowledge a monetary policy
shift from "accommodative" to "neutral or restraining," according to the minutes.

Fed is hiking rates faster than expected now

Leisman 18
(Steve Leisman, As CNBC's senior economics reporter, Steve Liesman reports on all aspects of the
economy, including the Federal Reserve and major economic indicators. He appears on "Squawk Box"
(M-F, 6AM-9AM ET), as well as other CNBC programs throughout the business day., “Fed will be forced
to raise rates more rapidly than expected because of accelerating economy, survey says”, 2018,
https://www.cnbc.com/2018/01/30/fed-will-be-forced-to-raise-rates-more-rapidly-than-expected-cnbc-
fed-survey.html VBM)
The Fed may be forced to raise rates more rapidly than the market is anticipating due to accelerating
economic conditions, CNBC Fed survey respondents say. Economists, fund managers and strategists now
see the funds rate ending 2018 at 2.24 percent, up about a quarter point from the prior survey.
Respondents continue to be unenthused about the outlook for stocks, seeing just 3 percent upside for the
S&P. Wall Street is looking for more economic growth this year, boosted by recently adopted tax cuts, but
also more interest rate hikes from the Federal Reserve. Respondents to the CNBC Fed Survey expect gross
domestic product to rise 2.9 percent compared with last year, about half a point higher than the average
forecast in the July survey. At the same time, forecasters lowered their 2019 outlook to 2.7 percent from
2.85 percent in the December survey. The 40 respondents, including economists, fund managers and
strategists, now see the funds rate ending 2018 at 2.24 percent, up about a quarter point from the prior
survey. Next year, the rate is forecast to rise to 2.8 percent, also a quarter point higher. "We believe that
the Fed may be forced to raise rates more rapidly than the market is currently anticipating due to
accelerating economic conditions and a heating of the economy," John Roberts, director of research at
Hilliard Lyons, wrote in response to the survey. "That could lead to a pullback in equity markets when
combined with rising rates that make fixed-income instruments more competitive with equities."
 2AC Link Turn
Turn - Increasing labor supply removes current inflationary pressure from wage and
employment growth – otherwise fast hikes inevitable
Bartash, 18 (Jeffry is a reporter at Marketwatch Dow Jones who specifies in economics). Wages grow at fastest pace in
more than 8 years as U.S. adds 200,000 jobs in January, MarketWatch, https://www.marketwatch.com/story/us-adds-200000-
jobs-worker-pay-rises-at-fastest-pace-since-2009-2018-02-02)

The big worry for the Federal Reserve, on the other hand, is that an ultra-tight labor market will stoke
inflation and force the central bank to raise interest rates more aggressively, an outcome that could hurt
U.S. growth. So far there’s little evidence to suggest a big upswing in inflation, however. What they are
saying?: “The faster pace of wage gains indicates that the labor market is tightening, with employers
having to pay higher wages to get the workers they want,” said David Berson, chief economist at
Nationwide. “In short, the labor market is tight, getting tighter, and employees are becoming more
expensive,”: said Ian Shepherdson of Pantheon Macroeconomics. “The question for the Fed now is
whether the plan for gradual tightening [in interest rates] will be enough if wage gains accelerate
further.”

That outweighs – structural constraints mean we control internal link uniqueness

Tully 17 Shawn Tully, February 22, 2017, Fortune, “The Yuge-est Threat to the Trump Economy: Spiking
Interest Rates”, http://fortune.com/2017/02/22/trump-economy-interest-rates/

The Trump economic plan has spawned a bull market in optimism, sending CEO spirits and stock prices
soaring. But a spike in another metric–interest rates–threatens to scuttle the President’s pledge to
restore American growth to heights unseen since well before the Great Recession. In the minutes to its
January meeting, the Fed revealed that “many” officials had advocated raising rates “fairly soon,” so
long as the economy kept chugging. But after hiking its benchmark rate in December for the second time
in a decade, the Fed was wary of adding another increase because of “considerable uncertainty”
surrounding the Trump administration’s “expansionary fiscal policy,” and its possible impact on what
matters most to the Fed: the future course of inflation. While the Fed cautiously assesses
Trumponomics, investors are taking the lead. The bond market has already seen a notable shift. Since
mid-2016, the rate on 10-year Treasuries has jumped a full point, to 2.43%. And 60% of that the increase
came in the three months and change following the election. Sundry market watchers think that rates
will keep climbing. In a recent report, Ryan Sweet, an economist at Moody’s Analytics, predicts that the
10-year will yield 3.2% by the fourth quarter of this year. That would mean a jump of roughly 80 basis
points from today’s level, and a rise of 104 basis points from the final quarter of 2016, which would be
one of the largest 12-month increases since the 1990s. The power behind the surge: Investors are
betting that Trump’s policies will spur inflation, now running at a modest 1.6%, to rise swiftly. The
reason is two-fold. First, the new president promises increased spending on infrastructure, veterans’
benefits, and the military, while at the same time championing steep corporate and personal tax cuts.
It’s likely that the plan will greatly deepen annual federal budget deficits that are already on course to
reach over $1 trillion, or 19% of all spending, in 2023. Sweet predicts that the Trump plan could cost an
additional $1.5 trillion over the next decade. That extra spending means that lenders would get a lot
more worried about America’s debt and deficits a lot sooner. As the U.S. strives to borrow more than
the Chinese and other foreign governments feel comfortable lending, the Treasury will need to offer far
higher rates to entice them to keep lending. Those same creditors will also fret that the big stimulus will
hike inflation, and will demand a cushion in the form of richer yields. The second factor: The stimulus is
coming at a most unusual time, when the economy is already near full employment, and many
industries are tight on capacity in plants and production facilities. “The Fed isn’t worried right now
about how this will be paid for, but about whether all this spending and tax cuts will boost the
economy, and boost inflation,” says Paul Ashworth, an economist with Capital Economics in Toronto.
“For the Fed, it’s all about inflation.” The fear is that the spending will rapidly lift wages because of a
shortage of workers, and that the extra take-home pay, enhanced by lower taxes, will chase cars and
appliances that are in short supply. The new administration’s hardline stance on illegal immigration
could speed up this cycle, by exacerbating the labor shortage. Put together, that’s a classic recipe for
inflation. Trump has a totally different vision. In his mind, the plan will create a virtuous cycle of
investment and durable growth. Companies will spend heavily on capital investment, and as they
expand, pull millions of working-age folks who’ve quit the labor force back into offices and factories. The
surge in capex will raise productivity through purchases of efficient machinery, and innovative
technology that makes supply chains more efficient. That combination would cause production and the
labor force to expand in tandem with demand for both products and workers, thus holding real prices
in check. It’s obvious, however, that both investors and the Fed think that a surge in prices is far more
likely than the supply side revolution that Trump promises. The evidence is the rate rise that’s already
occurred as a harbinger of inflation to come. If a surge in the labor and output doesn’t occur, the spike
in growth will fade quickly. “You’re juicing the economy for a short period,” says Ashworth, “but it can’t
grow at 3% without high inflation because productivity and labor can’t keep up. You run up against hard
constraints.” In that scenario, the Fed is forced to raise rates even further to stanch inflation, causing
a recession. “We haven’t repealed the business cycle,” says Doug Duncan, chief economist at Fannie
Mae. “This is already one of the longest expansions on record.” A crucial, mainly overlooked driver is the
dollar. The greenback is already sitting at lofty levels, having appreciated by 20% against a broad basket
of currencies over the past three years. But two forces could push the dollar far higher. First, the gigantic
borrowing on its own will raise rates well above those of nations from France to South Korea that aren’t
in expansion mode. Foreign governments will pile into Treasuries for their safety and fat yields. Second,
as part of its campaign to quell inflation, the Fed would be likely to adopt a strong dollar policy, once
again, by keeping rates at levels that would attract plenty of cash from abroad. That combination of
circumstances would make our cars and drugs a lot more costly in foreign markets, lowering exports,
and dampening growth, and with it, inflation. At the same time, a weak dollar would make imports of
clothes, cell phones and PCs far cheaper, exerting more downward pressure on prices. The interest rate
story encapsulates the contradictions in the Trump platform. A cornerstone of his agenda is lifting
exports and, if necessary, slashing imports to shrink America’s big trade deficit. Yet his expansionary
policies, paid for with more and more borrowing, will cause a rise in the dollar that will do precisely the
opposite. The Border Adjustment Tax, proposed by the House Republicans to help pay for the corporate
tax cuts, would add to the dollar’s strength, potentially causing an extra drag on exports. The fear is that
the Trump plan will bring a temporary surge in growth that quickly retreats to the sorry numbers of the
last few years. What’s most likely to defeat Trumponomics is the high interest rates that its structure
may make inevitable–in other words, a fate it would bring on itself.
 1AR Link Turn
Tightening labor market bids up wages, driving inflation and forcing aggressive rate
hikes
Horwitz 2/5 Evan Horwitz, February 5, 2018, FiveThirtyEight, “America May Finally Be Ready To Fix Its
Infrastructure. Too Bad The Timing Stinks.”, https://fivethirtyeight.com/features/america-may-finally-
be-ready-to-fix-its-infrastructure-too-bad-the-timing-stinks/

Now, this competition for limited resources isn’t all bad, not for workers anyway. If the federal
government has to vie with U.S. companies to hire qualified workers, it could start a bidding war, driving
up pay and benefits. This is far from guaranteed, given how sluggish wage growth has been despite our
tight labor market, but it can’t be ruled out.

But if pay did start to rise, odds are inflation would, too — which could prove self-defeating. Rising
inflation would likely trigger an aggressive response from the Fed, which has an explicit mandate to
keep inflation under control. That would mean faster interest-rate hikes as part of a concerted effort
to blunt inflation and moderate those wage gains.

We control uniqueness—makes faster-than-expected hikes inevitable—only

increasing labor supply solves
Lieberman 1/4/18 – chief investment officer and founding member at Advisors Capital Management
LLC (Charles, “Stop Misreading U.S. Job Scene: It's Tight and Getting Tighter.”
https://www.bloomberg.com/view/articles/2018-01-04/stop-misreading-u-s-job-scene-it-s-tight-and-
getting-tighter)

Flawed interpretations of the American labor market have become too widespread. And, perhaps, intentional.

Any objective reading of the data implies that labor is scarce, risking faster inflation and higher-than-
anticipated interest rates. The most common misreadings are that the declines in the worker-to-population ratio and the labor force
participation rates imply there are still plenty of people available to be hired. It's also asserted that the drop in the unemployment rate to 4.1
percent is only because these people have given up seeking work, so they aren't counted among the unemployed -- an intentionally misleading
and highly deceptive explanation.

Sure, it's true that the employed-to-population ratio of 60.4 percent is still well below the 63.7 percent level of 2007. But you need to allow for
changing demographics as well as changing behavior. The U.S. population is getting long in the tooth, with more than 10,000
baby boomers hitting retirement age weekly. On the opposite end of the spectrum, more young people are going to college or
enrolling in graduate programs.

Both phenomena reduce the ratio of workers to total population. Of course, we should want our older workers to kick back
and our young to get more education, so they can experience greater success. If we look only at prime-aged adults, those between 25 and 54,
the ratio of workers to population is 79 percent, only slightly below the pre-recession level of 79.9 percent.

Poor health is another thing. A surge in workers on disability benefits removed several million people from the job market, more than
accounting for the rest of the decline in ratio of workers to population since 2008. These folks are unlikely to surrender those benefits to return
to work. The opioid crisis also weighs on potential job seekers. Those afflicted are also unlikely to surge back into the labor force.

The decline in labor force participation is also commonly tied to a disappointing pace of job growth since the 2008 recession, but it actually started
around 2000, many years before the slump, as shown in Chart 1. The decline is driven by the changing behavior of women. In much of the post-World
War II period, female participation rose markedly, more than offsetting the gradual decline in male participation, which had begun many decades earlier.
After 2000, female participation started to track the behavior of their male counterparts, albeit at a somewhat lower level. So it's absolutely clear that
demography is the culprit, not the recession and a rebound is very unlikely. The Bureau of Labor Statistics also studied this and come to the same
conclusion.
More fundamentally, the notion that workers have dropped out because they can't find work is unsupported by data and is readily contradicted by a host
of labor market reports, which tell a coherent story of labor scarcity. Data on job openings show more than 6 million vacancies, which is an all-time high
since the survey was introduced in 2001. This is corroborated by household sentiment surveys, which report jobs are plentiful.

Data on quits also supports the thesis that jobs are abundant. Workers do not quit their current jobs if they think finding another will be difficult.
Symmetrically, firms are now reluctant to fire workers. They recognize that a fired worker may be difficult to replace. So, initial unemployment claims
have declined to around 225,000, the lowest level in this series going back to the 1970s, even though the labor market is now more than 50 percent
larger. All these reports provide a coherent data-based body of evidence that points uniformly to a scarcity of labor.

The only fly in this ointment is the claim that wages haven't behaved as if labor were scarce. If labor were really scarce, it is argued that wage inflation
would be higher. That's plausible, but might not be correct.

Contrary to popular perception, wage rates have increased. Every measure of wage inflation, from the monthly average rate to the quarterly
employment cost index, is now at its cyclical high and moving higher. Moreover, the labor market is far more efficient today than ever in matching
workers with firms trying to hire. Internet-based recruiting enables employed and unemployed workers to apply for any job opening anywhere in the
country with ease. Firms can cast a wider net than ever before when they try to hire. This should result in much better fits for job openings and a far
more efficient labor market with less upward stress on wage rates, but only until labor truly becomes scarce.

Any comprehensive analysis leads to the conclusion that things are tight and wage inflation should
increase over the coming months. Despite this, incoming Fed chair Jerome Powell, in his nomination testimony,
said that "maximum employment" is an "imprecise thing." That's correct, but the Fed should be trying to end its highly
accommodative monetary policy and bring interest rates to a neutral setting as quickly as it can.

Two Fed presidents, Charles Evans of Chicago and Neel Kashkari of Minneapolis, voted against the latest rate hike, because
they want to see inflation closer to, or even above, the Fed's 2 percent objective. But with a tight labor market, the economy
could get there far faster than they realize, which would make it difficult to put the inflation genie back
in the bottle.

Aff solves it
Hall, senior policy analyst in empirical studies at The Heritage Foundation, 16 (Jamie Bryan, “Does
Current Immigration Economically Benefit Ordinary US Citizens?”, The Heritage Foundation, 11-30-16,
https://www.heritage.org/immigration/commentary/does-current-immigration-economically-benefit-
ordinary-us-citizens, accessed on 7-14-18, JM)

Does current immigration economically benefit ordinary non-immigrants? A recent major report
indicates that most immigration does not. In September, the National Academy of Sciences (NAS)
published a major report on “The Economic and Fiscal Consequences of Immigration.” The report shows
that, other than small number of scientifically educated immigrants, immigration produces little or no
overall economic gain for non-immigrants but may cause a substantial shift in income from workers to
business and capital owners. Also, immigrants overall produce a fiscal deficit due to the very large
inflow of legal and illegal immigrants with low education levels in recent decades. So how did the
researchers get to this conclusion? For starters, the report makes the perfectly obvious point that
immigration increases the gross domestic product as it increases the number of workers. However, the
pertinent question is not whether the GDP is larger but whether non-immigrant citizens are
economically and financially better off because of immigration. Specifically, has immigration
increased or decreased the post-tax per capita income of the non-immigrant population? The report
shows that immigration impacts the post-tax income of non-immigrants in three ways: through an
“immigration surplus,” technological change, and a fiscal impact on government finances. According to
the report, an immigration surplus potentially exists because, as immigrants enter the labor force,
wages decline and returns to capital (such as interest and profits) increase by a slightly larger amount.
As the report puts it, “the more wages decline, the larger the surplus.” At its maximum value, the
theory implies that the current stock of immigrant labor, at 16.5 percent of the total labor force, has
“lowered wages by 5.2 percent,” or roughly $500 billion, for non-immigrants, while raising the incomes
of owners of business and capital by as much as $554.2 billion. The difference between the reduced
wages and increased profits is “an immigration surplus of $54.2 billion, representing a 0.31 percent
overall increase in income that accrues to the native population.” Thus the model shows that the main
impact of immigration is to redistribute income. In other words, since businesses can pay workers less,
they make more of a profit. However, as the report notes, the supply of capital may increase and the
rate of return on capital will fall. This would mean the wage losses, capital income increases, and
immigration surplus gradually disappear, and, in the long run, the situation would return to the status
quoante. The theory also predicts that a disproportionate inflow of immigrant laborers at a particular
education or skill level will reduce the wage of workers in that group relative to others. For example,
adult immigrants are almost four times as likely as non-immigrants to lack a high school diploma. This
will result in persistently lower relative wages for less skilled workers, whether immigrant or not.
 2AC Fed Smart
Rate hikes have nothing to do with the aff – Fed knows what they are doing
Amadeo 7/20
Kimberly Amadeo, Senior economic and business analyst for MNCs and President of WorldMoneyWatch,
Fed Funds Rate: Definition, Impact and How It Works, 7/20/2017, https://www.thebalance.com/fed-
funds-rate-definition-impact-and-how-it-works-3306122

Definition: The fed funds rate is the interest rate banks charge each other to lend Federal Reserve funds
overnight. These funds maintain the federal reserve requirement. That's what the nation's central bank
requires they keep on hand each night. The reserve requirement prevents them from lending out every
single dollar they get. It makes sure they have enough cash on hand to start each business day. The
Federal Reserve uses the fed funds rate as a tool to control U.S. economic growth. That makes it the
most important interest rate in the world. Banks use the fed funds rate to base all other short-term
interest rates. It includes LIBOR or the London Interbank Offering Rate. That's what banks charge each
other for one-month, three-month, six-month and one-year loans. It also includes the prime rate. Banks
charge their best customers the prime rate. That's how the fed funds rate also affects most other
interest rates. These include interest rates on deposits, bank loans, credit cards and adjustable-rate
mortgages. Longer-term interest rates are indirectly influenced. Investors want a higher rate for a
longer-term Treasury note. The yields on Treasury notes drive long-term conventional mortgage interest
rates. The current fed funds rate is 0.75 percent. The Federal Open Market Committee raised it
December 14, 2016. That's a year since its first increase on Dec. 17, 2015. Before this, it was zero to
combat the financial crisis of 2008. Former Fed Chair Ben Bernanke lowered it to this level on Dec. 16,
2008. The Fed had aggressively lowered it 10 times in the prior 14 months. The highest was 20 percent
in 1979. That's when former Fed Chair Paul Volcker used it as a tool to combat inflation. For more on the
fed funds rate highs and lows, see Historical Fed Funds Rate. How It Works Banks hold the reserve
requirement either at the local Fed branch office or in their vaults. If a bank is short of cash at the end of
the day, it borrows from a bank with extra money. The fed funds rate is what banks charge each other
for overnight loans to meet these reserve balances. The amount loaned and borrowed is known as the
federal funds. The Federal Open Market Committee sets a target for the fed funds rate. It can't force the
banks to use its targeted rate. Instead, it uses open market operations to push the fed funds rate to its
target. If the FOMC wants the rate lower, the Fed purchases securities from its member banks. It
deposits credit onto the banks' balance sheets, giving them more reserves than they need. That means
the banks need to lower the fed funds rate to lend out the extra funds to each other. For more, see How
Does the Fed Lower Interest Rates? When the Fed wants rates higher, it does the opposite. It sells its
securities to banks and consequently removes funds from their balance sheet. This gives banks fewer
reserves which allow them to raise rates. For more, see When Will the Fed Raise Interest Rates and Who
Is Controlling Inflation? How the Fed Uses It to Control the Economy The FOMC changes the fed funds
rate to control inflation and maintain healthy economic growth. The FOMC members watch economic
indicators for signs of inflation or recession. The key indicator for inflation is the core inflation rate. The
critical indicator for recession is the durable goods report. It can take 12 to 18 months for a fed funds
rate change to affect the entire economy. To plan that far ahead, the Fed has become the nation’s
expert in forecasting the economy. The Federal Reserve employs 450 staff, about half of which are
Ph.D. economists. When the Fed raises rates, it's called contractionary monetary policy. A higher fed
funds rate means banks are less able to borrow money to keep their reserves at the mandated level.
That means they will lend less money out, and the money they do lend will be at a higher rate. That's
because they are borrowing money at a higher fed funds rate to maintain their reserves. Since loans are
harder to get and more expensive, businesses will be less likely to borrow. This will slow down the
economy. When this happens, adjustable-rate mortgages become more expensive. Homebuyers can
only afford smaller loans which slows the housing industry. Housing prices go down. Homeowners have
less equity in their homes and feel poorer. They spend less thereby further slowing the economy. When
the Fed lowers the rate, the opposite occurs. Banks are more likely to borrow from each other to meet
their reserve requirements when rates are low. Credit card rates drop, so consumers shop more. With
cheaper bank lending, businesses expand. That's called expansionary monetary policy. Adjustable-rate
home loans become cheaper which improves the housing market. Homeowners feel richer and spend
more. They can also take out home equity loans more easily. They use these loans to buy home
improvements and new cars. These actions stimulate the economy. For this reason, stock market
investors watch the monthly FOMC meetings like a hawk. A one-fourth point decline in the fed funds
rate stimulates economic growth and sends the markets higher in jubilation. If it stimulates too much
growth, inflation will creep in. A one-fourth point increase in the fed funds rate will curb inflation. But it
could also slow growth and prompt a decline in the markets. Stock analysts pore over every word
uttered by anyone on the FOMC to try and get a clue about what the Fed will do. Fed Funds Rate,
Discount Rate, and Other Tools The fed funds rate is the primary tool of the Fed but there are others.
The Fed also has a discount rate which it keeps above the fed funds rate. That's what the Fed charges
banks to borrow from it directly through the discount window. The Fed also controls the nation's money
supply. For more, see Is the Federal Reserve Printing Money? The Fed created an alphabet soup of
programs to fight the financial crisis. For more, see the Federal Reserve Tools.
State Budgets DA
Neg
 State Budgets 1NC
State budgets are stable now, but slow growth leaves little room for increased
spending
MacKellar 1/1 Erica MacKellar, National Conference of State Legislatures, “The New Year Brings New
Challenges as General Fund Revenues Trudge Slowly Along”, 2018, http://www.ncsl.org/research/fiscal-
policy/state-general-fund-revenues.aspx

In the last decade, while state programs continue to grow at a fast pace, state general fund revenues
have grown only modestly, recovering far more slowly than in previous recessions. State general fund
revenues increased only 1.9 percent in FY 2017, and are projected to grow 3.9 percent for FY 2018,
according to an NCSL survey last October. K-12 education and Medicaid together account for about two-thirds of state budgets
annually, and both are consistently the fastest growing program areas. In FY 2018, total state funding for Medicaid is expected to increase 7.2
percent. These,
and other rising health care costs, and the unknown future of the Affordable Care Act, the
Children’s Health Insurance Plan and federal tax reform made budgeting especially tough for states.
Uncertainty over federal policies will continue to be a concern in state legislatures this year, particularly
in Maryland and Virginia and other states with economic ties to Washington, D.C. States are waiting to see how
federal tax policies will change, and the potential effects on state budgets. Currently, 15 states allow taxpayers to deduct state and local income
taxes when calculating federal taxable income, which is a key target in the congressional tax reform plan. Although
some state
budgets would not be drastically affected in the short term by a change in federal policy, ambiguity and
a lack of direction could be challenging in the long term, because slow revenue growth leaves little
margin for budgeting error. Estimating Revenues, No Easy Task All these challenges are compounded by the difficulty of estimating
revenue, which may have contributed to the large number of legislatures—10—that had to go into overtime to adopt state budgets last year. In
many states, both personal income tax and general sales tax collections have become more difficult to predict. Typically, as income grows,
people purchase more and this drives sales tax growth. But that trend may be shifting—and it could be a long-term problem. The population of
the United States is aging rapidly, and as people grow older, their consumption patterns change. Add to that the different prefer-ences of
millennials who have put off buying houses (and all the goods that go inside of them) in favor of spending money on travel and other
nonphysical goods, and revenue estimating in the states is no easy task. Severance tax collections are notoriously volatile, and with the current
weak markets for oil and gas, energy-producing states are concerned. Alaska, which has no statewide personal income or sales tax, has been
particularly hard hit. The state has drastically depleted its rainy-day funds to shore up budget shortfalls over the past few years. Some other
energy-dependent states, however, such as North Dakota, New Mexico and Wyoming, are seeing some stabilization in state revenues from the
energy sector. Slow and Steady Wins the Race Despite
these challenges, state budgets overall remain stable. With a
few exceptions, states have largely replenished budget stabilization, or rainy-day, ac-counts, after
drawing them down heavily during the Great Recession. Rainy-day funds in the states, plus states’ year-end balances, are
projected to be a healthy 7.2 percent of FY 2018 general fund expenditures, which may help some states weather any future economic
slowdowns. And some states continue to see higher-than-average revenue growth. Idaho, for example, finished FY 2017 with 8.8 percent
revenue growth. There
is a lot of uncertainty for state budgets in the coming year, and states have relatively
modest state revenue growth to manage any surprises. But state budgets over the last few years have
largely remained stable, meeting challenges as they come. This year will likely be no exception.

Increasing the number of low-education immigrants with permanent legal status is a

massive fiscal drain on state budgets—Best new modeling
Camarota 13
Steven Camarota, Director of Research at the Center for Immigration Studies, most frequent non-
government expert to testify before Congress, lead researcher on immigrant data with the Census
Bureau, Internally citing several recent studies including a comprehensive one by the Heritage
Foundation, The Fiscal Impact of Immigration, 2013, https://www.nationalreview.com/2013/05/fiscal-
impact-immigration-steven-camarota/

I have worked on the issue of immigration’s fiscal impact for a long time, having presented my first
academic paper on the subject at the annual meeting of the American Sociological Association almost
two decades ago. I can thus say with confidence that the Heritage Foundation’s recent report on the
fiscal cost of illegal immigrants is the most detailed and exhaustive ever done on this topic. The report’s
lead author is Robert Rector, intellectual godfather of welfare reform. Rector finds that illegal-immigrant
households use about $55 billion more in services than they pay in taxes each year. Under the Schumer-
Rubio bill, they would begin to get permanent legal status (green cards) in about ten years and would
access more programs; then, the annual costs would balloon to $106 billion a year. The total fiscal costs
over the lifetime of illegal immigrants, if they receive amnesty, would be $6.5 trillion. Some, even on the
right, have criticized his analysis, but the basic findings are unassailable for reasons I will explain. In the
modern American economy, those with relatively little education (immigrant or native) earn modest
wages on average and make modest tax contributions. Their low average incomes mean that they or
their children can often access welfare and other means-tested programs. As a group, the less educated
use more in services than they pay in taxes. Anyone who argues otherwise is either lying or grossly
uninformed. Education matters so much to the illegal-immigration debate because all researchers
agree that about half of adult illegal immigrants have less than a high-school education, and another
quarter have only a high-school education. The Heritage study identifies this as the key reason that
letting illegal immigrants stay creates huge fiscal costs. As illegal immigrants are on average only 34
years old, the cost over the next five decades will be enormous. As the Heritage study points out, the
average household in America receives more than $31,000 in government benefits and services —
federal, state, and local, minus pure public goods such as defense and interest on the debt. Very
roughly, this is the median income of a household headed by an immigrant with a high-school education
or less. There is no way for these households to pay enough in taxes to cover even the average
consumption of public services. What’s more, these households are relatively large and on average
receive a good deal more in public services than $31,000. Until government is cut by at least half, the
less educated will be a significant fiscal drain. This does not make the less educated bad people. It
simply reflects the realities of the modern American economy and the existence of a huge
administrative state. The accompanying figure shows welfare use and income-tax liability for
households headed by an immigrant who has lived here for 20 years, and who thus is not a new arrival.
The figure shows that 63 percent of households headed by immigrants who have not completed high
school and have lived here for 20 years access one or more welfare programs, and 68 percent have zero
federal income liability. Of households headed by an immigrant with only a high-school education (and
who has lived here for 20 years), 49 percent use welfare and about half have no federal income-tax
liability. While not a fully developed model like the Heritage study, the figure demonstrates why less
educated immigrants are on average a net fiscal drain, even after they have been here for two
decades. It is worth pointing out that 86 percent of immigrant households accessing the welfare system
have at least one worker. But working does not eliminate one’s ability to collect welfare, particularly
non-cash welfare and other means-tested programs, if one’s income is low enough. #page#The graph
includes both legal and illegal immigrants, which actually reduces the welfare use rates somewhat. That
is, less educated legal immigrants have even higher welfare use than less educated illegal immigrants.
This is why Heritage’s study finds that giving illegal immigrants legal status raises costs dramatically.
Proponents of amnesty, led by the Cato Institute, have offered some rather silly arguments to attack
Heritage. First, some critics contend that less educated immigrants are no worse for the nation’s fiscal
outlook than less educated native-born Americans. This is mostly true. But it in no way justifies allowing
into the country additional less educated immigrants, who will compound the problem. #ad#Some also
argue that Rector’s methodology is non-standard because it looks at taxes paid and services used by
households rather than individuals. In fact, this is the standard way to look at the issue. The National
Research Council (NRC) used households in some of the fiscal analyses it did of immigrants, as did the
Urban Institute in its tax studies in 1995 and 2006. Princeton economist Thomas Espenshade also used
households in his fiscal analysis of New Jersey’s immigrants. The late Julian Simon, who was at Cato and
shaped the institute’s views of immigration, used this approach as well, with data from the 1970s. But
now that the numbers do not come out positive, Cato does not like Simon’s method. The way Heritage
looked at the fiscal impact of immigrants is the main way most researchers have done this kind of work.
The primary concern about looking at households is that this approach includes U.S.-born children, who
critics argue should not be counted. But Simon himself pointed out that the fiscal impact must include
both the immigrant and the family “he brings or acquires.” After all, the children are here only because
their parents have been allowed into the country. It is also worth noting that the NRC study in 1997 did
an analysis that excluded U.S.-born children, and it still found that less educated immigrants were a
large fiscal drain. Others argue that because the Schumer-Rubio bill limits welfare access for the first ten
years after legalization, there is nothing to worry about. But the Heritage study shows that illegal-
immigrant households already receive about $4,500 a year on average from means-tested programs.
The U.S.-born children of illegal immigrants have access to all programs, the ban does not apply to every
program, and the administration of these programs is far from airtight. Finally, as the Heritage study
makes clear, when the ten-year window expires, the costs explode. #page#Another criticism of the
Heritage study is that it does not take into account that the legalized illegal immigrants will do better
over time. This is simply false; the Heritage study does assume that incomes will rise both with
legalization and over time. But this does not mean that illegal immigrants will come even close to
providing a net fiscal benefit to the nation. As the accompanying graph makes clear, even less educated
immigrants who have lived in the United States for 20 years have very high welfare use and very low tax
liability. Heritage’s findings simply reflect this fact. Probably the main argument of critics is that the
economic benefits we gain from having access to immigrant labor will offset the fiscal costs. There is
simply no evidence for this. The National Research Council study mentioned above, which was
authored by many of the leading economists in the field, is the only study of which I am aware that
tried to measure both the economic impact and the fiscal impact of all immigrants. That study found
that the economic gain to the native-born from all immigrants was smaller than the fiscal drain
created by all immigrant households. And that finding was for all immigrants, not only illegal
immigrants, who have on average just ten years of schooling. #ad#In a recent paper for my
organization, the nation’s top immigration economist, Harvard’s George Borjas, summarizes the
economic literature and observes, “Immigration is primarily a redistributive policy.” As Borjas explains,
the immigrants themselves may benefit a great deal by coming to America, but the gain to natives from
illegal immigration is estimated at 0.06 percent of GDP: six one-hundredths of 1 percent. To assume that
immigration creates large gains to natives, one must invent benefits that are not demonstrated in the
academic literature. The worst example of ignoring the immigration literature is a widely cited op-ed
piece by former McCain adviser Douglas Holtz-Eakin. I published a long critique of his article here. The
central point of Holtz-Eakin’s “dynamic analysis” is the contention that immigration-induced population
growth, by itself, will have a positive impact on the economy and public coffers. But to reach his
conclusion, Holtz-Eakin ignores the economic literature showing that immigration only slightly increases
the income of natives. He also ignores the literature on development indicating that population growth
does not increase per capita GDP growth. Worst of all, he ignores the research that has examined the
actual impact of immigration on public coffers, which shows that education at arrival is the key
determinant of immigrants’ fiscal impact. To offset the enormous fiscal costs that the less educated
create, illegal immigration would have to dramatically increase the income of natives. There is simply no
objective research showing this is the case. Of course, immigration does make the economy larger. But,
as Borjas points out, of the increase in the size of economy that immigration creates, “97.8 percent goes
to the immigrants themselves in the form of wages and benefits.” It is true that immigrants came to
America 100 years ago and did not create a large fiscal drain. But government was a tiny fraction of
what it is today, so the arrival of low-income immigrants could not create a large fiscal drain. Heritage’s
study, as well as common sense, makes clear that advocates of smaller government have to oppose
amnesty and support very selective immigration policies until the day that government spending is cut
dramatically. Otherwise the fiscal cost will be enormous.

Higher education funding is the first to go when welfare costs rise

Seltzer 17 (Rick, Reporter, covers business and management for Inside Higher Ed. He joined the
publication in 2016 after working as a money and general-assignment reporter for The Baltimore
Business Journal.) “Health Care vs. Higher Ed”
https://www.insidehighered.com/news/2017/04/12/medicaid-funding-changes-pressure-state-higher-
ed-funding

They’re just doing it under existing law, the Patient Protection and Affordable Care Act, which President
Obama signed and President Trump sought to repeal. The way the current law was designed, states'
share of Medicaid costs is rising as the federal government pulls back on incentives it used to encourage
them to expand the program. And when federal spending requirements for states grow, public funding
for colleges and universities -- one of the largest so-called discretionary pots of money most states
control -- tends to be the target. Consequently, the current law has drawn attention from higher
education experts, because more spending requirements on states translates into more pressure on
public funding for colleges and universities.

“Some states are going to be left really holding the bag,” said George Pernsteiner, president of the
State Higher Education Executive Officers association. “It will put them in a pinch if they don’t have a
booming economy. That’s what I worry about.”

The increased costs are connected to the federal funding mechanism underpinning the expansion of
Medicaid, which covers many low-income children and adults and people with disabilities. States and
the federal government share Medicaid costs under a patchwork of funding mechanisms, including the
Federal Medical Assistance Percentage, or FMAP, which guarantees a minimum of $1 in federal
matching funds for every $1 states spend on Medicaid. But the Affordable Care Act sought to entice
states to expand Medicaid to cover adults with incomes of up to 138 percent of the federal poverty
level.
It did so by paying 100 percent of the costs of such Medicaid expansion -- but only for a limited time.
The 100 percent federal match started in the 2014 calendar year but ended in January 2017, when it
dropped to 95 percent. It is set to phase down to 90 percent in 2020 and remain at that level afterward.

Washington, D.C., and 31 states expanded Medicaid in response to the Affordable Care Act. That means
they are now seeing their share of Medicaid costs rising.

When states adopted their budgets for the 2017 fiscal year, their share of Medicaid spending was
expected to grow by 4.4 percent on average, according to an April report from the Kaiser Family
Foundation. The increase was expected in large part because of the decrease in federal funding for
Medicaid expansion.

While 4.4 percent might not sound like an overwhelming increase, Medicaid spending is a massive
portion of states’ budgets. Medicaid spending across all states totaled $509 billion in the 2015 fiscal
year, according to the Kaiser Family Foundation. States paid 38 percent of the costs, with the federal
government picking up the rest.

That means states spent about $193.4 billion on Medicaid in 2015. That dwarfs state higher education
appropriations, which totaled about $83.6 billion across the country in 2016-17.

State legislators are essentially locked into spending on Medicaid. So when costs in that program rise,
lawmakers have to either raise revenue through taxes and fees or find money in their discretionary
budgets to reallocate. Higher education represents one of the few big-ticket discretionary items from
which they can draw.

“They’re going to get the money somewhere,” Pernsteiner said. “Where they make the cuts is higher
ed.”

Affordable college access stops global war, solves everything

Miller, 8
(September, Professor of Education, Curry School of Education-UVA, Looking Ahead: Letters to the Next
President from Higher Education's
Leadershttp://www.changemag.org/archives/back%20issues/september-october%202008/full-looking-
ahead.html

In recent decades, the price of college has risen far faster than family income, inflation, even health
care. Today, you can buy a fully loaded Honda Civic for less than the average cost of one year at a four-
year private college. When 90 percent of the fastest-growing jobs require postsecondary education, it’s
unacceptable that 90 percent of low-income students fail to earn a degree by the time they reach their
mid-twenties—especially as our country diversifies and becomes a majority-minority nation. But until
very recently, few were talking about the dramatic rise in tuition or the sad disparity in opportunity. The
bipartisan Higher Education Commission I created three years ago shed new light on the issues of
affordability, accountability, and access. First, access. We all know that students will not succeed in
college if they lack the necessary educational foundation. We must increase access to higher education
by better aligning K-12 curricula with college and workforce standards. This is a no-brainer. We must
also provide better and more convenient postsecondary opportunities for adults and other
nontraditional students. Thirty-two million Americans who started a college education have never
finished. Our community colleges have taken the lead in providing these opportunities on the students’
terms. The rest of higher education must emulate their convenience, adaptability, and affordability.
Which brings me back to cost. Even if students are academically prepared for college, they often cannot
pay for it or are so burdened with debt that it haunts their future. Financial barriers are keeping nearly
two million low- and middle-income qualified high school graduates from attending college. Five years
ago, the average debt load approached $20,000 for a bachelor’s degree recipient. It’s worse today. At
the federal level, we are doing our part. We have increased the availability of free need-based
scholarships to help students pay for college. Student Pell grantees in 2008 will benefit from the largest
increase in their annual award in 30 years. States and institutions must also play a role by increasing
efficiency and productivity to reduce tuition. Only when institutions address the root causes of rising
costs will more people enjoy greater access to the American Dream. Next, we must simplify and
streamline our broken, Byzantine financial aid system. It’s as if we are trying to keep people out of
college, not welcome them in. I urged a dramatic overhaul, but Congress has failed to act. Finally, in
choosing a college, students and families need much more information than they currently have. They
expect answers to questions such as, Will I graduate within four years? Will I get a job in the field I
majored in? Am I going to have the skills I need to succeed? Decisions about postsecondary education
are among the most important and costly that individuals make. They deserve to know what they’re
getting. To remain competitive in the global economy, we must help at least 20 million more
Americans earn a college degree or postsecondary certificate by 2025. I hope you will declare that by
2012, we will be at least halfway toward achieving this goal. Godspeed. —Margaret Spellings U.S.
Secretary of Education To the next President of the United States: As you begin your term, our country
faces a clear set of national and international challenges. I write on behalf of the leaders of more than
3,000 colleges and universities to convey our shared sense of urgency and purpose in the face of these
challenges and our commitment to help you find constructive solutions. You and your administration
will face four main challenges as you lead our country in the coming years: • Preserving peace and
security in an increasingly interdependent world, • Revitalizing and sustaining a strong economy, •
Expanding educational opportunity, and • Maintaining America’s research and innovation edge. Some of
America’s greatest strengths come from the historic partnership between higher education and
government that has lasted for more than six decades. Since World War II, that partnership, reinforced
by the private sector, has opened the doors of opportunity for millions of veterans and other needy
students, built the finest scientific enterprise in history, and improved the skills of the work force. As the
country prepares to enter a new decade, we must reinvigorate that partnership. Over-regulation and a
lack of sustained funding in key areas have frayed it, and your leadership is essential to its repair. Our
colleges and universities have always responded to such leadership. They will do so again during your
administration. In this letter, I present an agenda for you and for higher education that will draw forth
the best our institutions can offer the nation. I hope you will make this agenda your own. Our greatest
presidents have known that America’s progress depends on a fully engaged community of learning.
Preserving Peace and Security in an Increasingly Interdependent World Finding ways to protect our
national interests while promoting regional and international cooperation is a task of preeminent
importance for the United States. In a world now threatened by terror, where people and nations are
increasingly divided by military, political, economic, religious, and racial strife, it is imperative that we
diminish the risk of wider conflict while maintaining the security of the nation. For nearly a century,
America’s colleges and universities, resisting a tradition of isolationism deeply ingrained in our nation’s
history, have emphasized the study of foreign cultures. During this period, higher education has also
played a central role in developing public understanding of economic, defense, and foreign policy
issues; in preparing diplomats and other experts in foreign and military affairs; and in providing critical
analysis for national decision-making. To help formulate the nation’s foreign policy and defend our
interests abroad, every modern president has drawn heavily on the resource of higher education. I ask
now that you: • Support the strengthening of programs dedicated to international studies and
research—including area studies centers and teaching at all levels about foreign countries and cultures.
• Encourage exchanges that enable Americans to study and teach abroad and students and scholars
from other countries to attend American institutions. • Expand the teaching and study of foreign
languages in our schools, colleges, and universities. • Increase the investment by the Department of
Defense to lead the world in research that will help develop the technologies and strategies needed to
protect the nation from a broad range of security threats. Revitalizing and Sustaining a Strong Economy
We currently face a time of economic uncertainty, marked by wide swings in the stock market, soaring
energy prices, mounting budget and trade deficits, shrinking economic growth rates, and the loss of
important markets to foreign competitors. As major sources of discovery, innovation, and invention,
colleges and universities can help lead in the renewal of our advanced, knowledge-based economy. To
do so effectively, we in higher education must translate discoveries into useful products by creating
relationships with industry that will supplement basic scientific and economic research. At the same
time, we must also increase our efforts to see that we are producing highly skilled graduates for the
work force of the next decade—this includes partnerships with the nation’s schools to see that all
students are well prepared for the rigors of college. There are a number of ways you could facilitate
higher education’s efforts on behalf of the economy, among them: • Undertake new and dramatically
expanded initiatives to provide educational access to high-school dropouts, displaced workers, and
returning military personnel. • Respond to the nation’s need for more scientists and engineers by
expanding federal support for graduate and undergraduate student financial assistance in these fields,
as well as funding for faculty research. • Initiate programs to add to the supply and improve the training
of teachers at all levels, particularly mathematics at the K-12 level and in high-technology and applied
fields in the life and physical sciences. • Reinforce existing national programs for short-term
employment training by providing tuition assistance for dislocated and displaced workers at community
colleges. Expand Educational Opportunity For more than four decades, the partnership between higher
education and government proved a powerful engine for expanding educational opportunity. Financial
aid programs—supported by the federal government, state governments, and institutions—have
opened doors to millions of students, transforming and revitalizing our colleges and universities and
diversifying the leadership of our society. Over the last decade, however, we have seen the re-
emergence of barriers that threaten the progress made in equalizing opportunity. We have seen
dramatic fluctuations in state and federal support. Rising tuitions, growing student-debt burdens,
persistent participation gaps, increased dropout rates—these are all signs of a decline in access to
higher education. Such ominous trends come at a time when the knowledge economy demands an ever
more highly skilled workforce. We must strengthen the access partnership to expand opportunities at all
levels of our educational system. To that end, I ask that you do the following: • Intensify federal efforts
to support disadvantaged students in completing school and pursuing a college education. • Increase
funds for grant assistance to needy students, particularly the Pell Grant Program. • Enhance tax
incentives to boost college access and expand tax-free alternatives that allow parents and families to
save systematically for their children’s education. Maintain America’s Research and Innovation Edge
While Americans have long enjoyed a high standard of living relative to other nations, our country
continues to struggle with serious challenges, including environmental deterioration, crumbling urban
infrastructures, uncertain energy supplies, inadequate healthcare delivery, poverty, hunger, and disease.
In the past, academic and research expertise at America’s colleges and universities has provided the
solutions that have led to dramatic breakthroughs in healthcare, environmental protection,
transportation, nutrition, and food production. Not only does university research solve problems—the
process itself, by engaging both undergraduate and graduate students, helps educate the next
generation of scientists for even greater discovery. But America’s research and innovation prowess faces
growing challenges from abroad, especially from emerging nations such as China and India. To maintain
our global leadership, we must revitalize our research and innovation capacity. To do that, we must: •
Continue to increase funding for basic research through the National Institutes of Health (NIH), National
Science Foundation (NSF), and other agencies. • Increase funding in areas of national need, including
energy self-sufficiency, climate change, environmental studies, and homeland security. • Strengthen the
system of technology transfer in order to encourage the transformation of cutting-edge basic research
into commercial products and medical advances that benefit society. We in higher education look
forward to working with you to advance this agenda and enhance the important partnerships among
our colleges and universities, the federal government, and the private sector. Together we can meet the
challenges of the next decade and make great strides in providing the solutions to change society and
the world. —Molly Corbett Broad President American Council on Education To the next President of the
United States: I write as a friendly foreigner to urge that you act to strengthen and sustain higher
education in the United States. You might ask: Why, with the stack of pressing issues on your desk,
should you worry about higher education, where there is only a limited role for the federal government?
In his book The Post-American World, the editor of Newsweek International, Fareed Zakaria, shows that
although the U.S. is not declining, other countries are rising and challenging its preeminence in many
fields. A long-term change in America’s relative position was always predictable, but, because of the
previous administration’s inept economic management and callous diplomatic incompetence, the shift is
happening more quickly than anyone expected. In this environment, America must nourish its strengths.
Two of these, which complement each other well, are higher education and the armed forces. I offer
you no advice on the military, except to suggest that you trade your predecessor’s motto, “In arms we
trust,” for a more effective blend of hard and soft power. The tremendous worldwide influence of U.S.
higher education gives the country an abundant source of soft power. It is not only America’s research
universities that the world envies. Your real treasure is the diversity of a system that gives
opportunities for tertiary education and training to a large proportion of the population from all
socioeconomic groups. Other countries are keen to emulate U.S. higher education, using your model of
the community college, your mix of public and private institutions, and your huge array of available
programs. How can you, then, as President, strengthen the system and enhance its international
influence? I suggest action on three fronts. Step 1, which will no doubt inspire your stance in
international affairs generally, is to show that America supports multi-lateral approaches and can work
effectively within them. At a time when Americans are touchy about the apparent decline in their
international influence, this will take guts—but your courage will be well repaid, not only in goodwill,
but in real influence. Although UNESCO might seem an odd place to start, it gives you a platform to
show—in education, culture, communications, and science—that the era of “my way or the highway”-
style diplomacy is over. As a recent article in the German magazine Der Spiegel noted: “With this
attitude the U.S. often finds itself as isolated as only North Korea and Myanmar are in other forums... .
Sometimes it seems that America only rejoined UNESCO to blow up the whole organisation from the
inside.” In a world where demand for higher education is booming, where the international movement
of students will triple in a decade, and where e-learning is challenging the notion of borders, America
has nothing to fear and everything to gain by leading the development of international rules of
interaction. Where the previous administration fanned the embers of xenophobia and paranoia, you
must lead the world’s most multicultural nation to engage confidently with other countries—a much
more natural stance. Step 2 is to work from the good principle, “If it ain’t broke, don’t fix it.” Just as
other countries begin to accept that universities perform better autonomously, with a light touch from
the state, America is moving in the opposite direction through attempts in Congress to suck the
accreditation system more deeply into the federal ambit. This will do damage. The current regional and
national systems of accreditation may not be perfect, but the federal government should push to
correct their perceived weaknesses rather than launch a hostile takeover. For example, robust action—
including legislation—by your administration to suppress degree mills would be very welcome. These
bogus operations, and the equally phony accreditation mills behind which they hide, undermine the
credibility of U.S. accreditation and have a negative influence on higher education worldwide. Through
the Bologna process, Europeans are trying to raise the quality and standards of higher education across
46 countries in Europe. They face an uphill struggle because of the hodgepodge of national legislation.
The U.S., already well ahead on this front, should now lead the international community in freezing
these fraudulent and dangerous scams out of their safe havens around the globe. A war on degree mills
is winnable, presents no risk of collateral damage, and would earn America international plaudits. Step 3
is to achieve a better balance between the recruitment of foreign talent for the U.S. economy and the
strengthening of universities in developing countries. Under current trends, including the external
dimension of the Bologna process, more students are becoming global nomads. This increase in mobility
is a force for peace. However, poorer countries lament the loss of their brightest people through brain-
drains to the U.S. and Europe. Thirty percent of Africa’s tertiary-trained professionals live outside the
continent, which loses about 20,000 professionals annually. Because the U.S. economy needs a steady
influx of trained workers, it is in America’s interest to strengthen universities in developing countries as
well as to promote mobility. It could do this by encouraging U.S. universities to help local universities in
poorer countries develop solid Ph.D. programs in situ, which would allow more people to train as
researchers without going abroad. Substantially increasing the number of doctorates awarded in these
countries would provide a pool of highly qualified people to contribute to their national development
without decreasing the overall availability of talent to the U.S. This would be an excellent and much-
appreciated form of soft power. What better way for America to extend its long-term influence for good
than by nurturing the universities across the world whose graduates will create the future? To adapt the
well-known Chinese proverb: if you educate foreigners in the U.S., they will benefit for a lifetime; if you
nurture foreign universities, the benefits will extend to future generations. —Sir John Daniel President
and Chief Executive Officer Commonwealth of Learning Former Vice-Chancellor, UK Open University To
the next President of the United States: As I began to write this letter, I thought about the words of one
of my sheroes, Dr. Mary McLeod Bethune, a daughter of slaves who went on to found one of our
nation’s historically black colleges, known today as Bethune Cookman University. Dr. Bethune said,
“Education is the prime need of the hour.” What was true during her time is no less so today. Among
our nation’s critical issues, education occupies a special place, and I urge you to make it one of your
highest domestic priorities. Education should be viewed as a seamless process that begins early in a
child’s life and continues through primary and secondary schooling and into the tertiary or college level,
and then into a post-baccalaureate stage. However, as someone who has served for many years as a
college professor and president, I want to focus my comments on higher education. To have or not to
have a college education has definitive consequences. College graduates earn on average twice as much
as high school graduates their first year out of college and throughout their careers. That impact ripples
through the entire economy and society. Because college graduates earn more, their families enjoy
greater economic security. They pay the taxes that support better schools, hospitals, and cultural
institutions. And every community needs more teachers, physicians and other college-educated
professionals. Research indicates, moreover, that college graduates are more likely to play active roles in
the civic life of their communities—and I am proud to say that graduates of historically black colleges
and universities (HBCUs) tend to be especially active in community and civic affairs. The importance of a
college education has national dimensions as well. We are no longer living in an industrial economy that
needs a low-skilled workforce to operate equipment on routinized production lines. Ours is a
knowledge-based, highly technological economy. And that economy requires a workforce with
sophisticated skills. Jobs follow well-educated pools of labor. So we must prepare our students today—
all of our students—for a more demanding job market, whether they go to college or not. Given that I
have had the honor to serve as president of the only two historically black colleges for women in our
nation, Spelman College in Atlanta and Bennett College for Women in Greensboro, North Carolina, you
will not be surprised that I urge you to give very special attention to the education of people of color. By
2050, these populations will be nearly fifty percent of our nation’s total population. Yet in 2005, African
Americans represented only fifteen and Hispanic Americans only ten percent of the students enrolled in
college. Both groups’ academic performance is further weakened by lagging graduation rates. They are
20 percent of those in college but less than 12 percent of college graduates. Mr. President, I also urge
you to do everything you can to eliminate the financial barriers to a good education. There was a time in
our country when young people could work their way through college. Those days are behind us.
College tuitions are so high that they cannot be covered by full-time adult jobs, much less student
employment. This is why I hope you will give priority to helping students, especially low- and moderate-
income students, pay for the good college education they need. I also hope you will support efforts to
restore the purchasing power of Pell Grants, the largest national education assistance program. Please
see if elite institutions with endowments measured in the billions can be persuaded to use some of the
income from those endowments to further the education of students who cannot afford the full cost of
college. Finally, Mr. President, please make sure that our nation gives America’s HBCUs the support they
have earned. Today, as in years past, these institutions provide an educational home to many students
who have been shortchanged by the public schools but flourish in the small-college environments and
social support systems HBCUs provide for their students. In an age of escalating tuitions, theirs are
substantially lower than those of comparable institutions, and they have higher average graduation
rates than the average African-American graduation rates of majority institutions. HBCUs have served
their students and their country well. They deserve your support. We must invest as a nation in proven
educational approaches and foster an atmosphere in which new ideas can be tested and, if they work,
expanded. In that spirit, the words of President Franklin D. Roosevelt, spoken a few months before he
was inaugurated, offer sound counsel: “The country demands bold, persistent experimentation. Take a
method and try it: If it fails, admit it frankly and try another. But above all, try something.” —Johnnetta
B. Cole President emerita Spelman College and Bennett College for Women To the next President of the
United States: No one hears the story of why it takes a student six years to graduate from college. You
do not hear about the student body president and promising leader who had to drop out of school mid-
semester because of a family tragedy, and you won't hear that he has returned to school. But virtually
any community college student has some such inspiring story to tell. A community college has the most
diverse student body of any postsecondary institution. Each student comes in with a different
background, a different hope for the future, and a different reason for why a community college is the
mechanism for getting there. There is the forty-year-old woman who has come back to finish the college
education she started twenty years ago; there is the recent high school graduate whose family cannot
afford to send him to a four-year college; there is the thirty-five-year-old man who was recently laid off
from work; there is the high school student taking college classes in order to fulfill high school
requirements; there is the fifty-four-year-old man who is there for the sole purpose of personal
enrichment; there is the high school dropout who has no choice but to begin at a community college;
there is the single mother looking to get a two-year degree in order to make a better life for herself and
her children. But this diverse group does have something in common: most struggle with juggling school
and work and family, typically staying awake till the wee hours of the morning studying because the kids
were up late or they had to take an extra shift. You have never seen perseverance like this before. So
what is my story? I started at community college my sophomore year of high school. I had been home
schooled; my family and I had lost confidence in our local public high schools and did not have the
money to send me to a private school. Home schooling offered me flexibility and inspired creativity, but
it did not allow for interaction and dialogue with my peers and teachers. In order to satisfy that need, I
took my first college class at College of San Mateo at the age of fourteen. I fell in love with my college
and quickly involved myself in its clubs and activities. When I graduated from high school, I was elected
co-president of the College of San Mateo’s honor society and student trustee of its district board, a
position in which I had the opportunity to represent the 40,000 students who enroll in our tri-college
district each year. Just this month I was elected president of the Student Senate for the California
Community Colleges, which makes me the official voice for 2.6 million students. Since I first came to
College of San Mateo I have changed from girl to young woman, from naïve follower to passionate
leader, and from ordinary volunteer to aspiring visionary. My story is not the only one of unexpected—
and unlikely—achievement and success. Rather, I am one of millions whose life was changed drastically
by my community college. The benefits of a college education become more apparent in my life each
day. All of the skills that my professors have taught me—to write, listen, speak, manage my time, share
ideas, do research, and think critically—I use daily. College has prepared me to take full advantage of the
opportunities I have, including an internship this summer in Washington, D.C., with a California
congresswoman. More than anything, I have been given my voice at community college and now can
give voice to others. Community colleges are charged with being all things to all people. This is to the
benefit of the diverse student body, but it is a great challenge for the college. Community colleges
provide more than any other educational institution—programs and services for first-generation college
students, veterans, the disabled, honors students, athletes, and more—yet they are funded the least per
student. They have made it their trade to squeeze dimes out of nickels and make miracles a daily reality.
But our nation’s lack of commitment to the community colleges’ mission of providing accessible,
affordable, high-quality education to at-risk students is leaving those colleges less able to reach out and
support the people who need it most. Our country needs to make it a national priority to restore and
enhance funding for community colleges and to increase the financial assistance available to their
students. Our nation will reap the long-term benefits—a diverse, educated, and civically engaged
population—that will make our investment worthwhile. Please give our students and colleges the
support they need in order to enable students to find their voices, as I have found mine. —Richael
Young Student College of San Mateo To the next President of the United States: The worldwide
preeminence of American higher education over the last half-century is due in large part to the
generous federal and state financial support that poured into universities after World War II.
Government investment in university research was richly repaid, since it contributed greatly to
America’s postwar productivity and affluence. At the same time, the expansion of universities, which
opened their doors for the first time to new social groups, vastly increased the opportunity and upward
mobility of American citizens. The American dream, in short, has been closely linked to the health of the
American campus. That health is now seriously endangered by the steady withdrawal of public financial
support from higher education, a trend that started in the 1970s and has reached crisis proportions with
the economic downturn that has lingered since 2001. State and federal support as a percentage of
public universities’ budgets today is a fraction of what it was in the 1960s and 1970s. No institution can
lose so much of its support without serious consequences, and the impact on public universities has
been devastating. The loss of governmental support has contributed to the dramatic increase in college
tuition, which reverses the earlier gains in economic opportunity for the many who now can no longer
afford college. The lost support also explains a less widely publicized trend: the shrinking of the
permanent faculty as campuses rely increasingly on poorly paid part-time instructors, who at some
institutions now comprise over 70 percent of the instructional staff.
 2NC Impact-Innovation
Public universities are central to high-quality research and innovation
Price 11 (Tom- reporter for Pacific Standard) “STATE BUDGET CUTS HURTING QUALITY OF RESEARCH”
https://psmag.com/education/state-budget-cuts-hurting-quality-of-research-31573

State budget cuts pose a significant threat to the quality of research in the United States, a panel of
educators said earlier this month at an American Association for the Advancement of Science
conference.

While federal grants support 60 percent of university research, AAAS senior policy adviser Albert Teich
said, America’s diverse and decentralized education system depends heavily on state funds as well.
Two-thirds of U.S. universities with “very high research activity” are state-supported, according to the
Carnegie Foundation.

That in turn represents a big chunk of the total research done in the United States. Universities perform
more than half of the nation’s basic research — triple what’s done in business or federal government
laboratories, said Tobin Smith, vice president for policy at the Association of American Universities.

State universities hire and set the rules for the way research faculty go about their jobs. State schools
also traditionally have provided access to higher education for students who couldn’t afford more
expensive private institutions, expanding the pool of potential scientists and facilitating mobility up the
economic ladder in the process, said Irwin Feller, a Penn State University economist who has studied
universities and state governments.

“We tend to focus on the federal level,” at gatherings like the annual AAAS forum on science and
technology policy, Feller said. “But the problem right now is at the state level.”

“The cuts are severe,” he said, and some state policy changes will diminish state universities’ ability to
employ the best professors. Salaries are stagnant, tenure is under attack, and some states are
mandating heavier teaching loads, he said.

Declining innovation causes great power war – it hamstrings interdependence and

economic leadership
Drezner 16 – Daniel Drezner, Professor of International Politics, Tufts; Nonresident Senior Fellow,
Brookings (“Five Known Unknowns about the Next Generation Global Political Economy.” Project on
International Order and Strategy at Brookings, May 2016,
http://www.anamnesis.info/sites/default/files/D_Drezner_2016.pdf)

The erosion of the trade and demographic drivers puts even more pressure on technological innovation
to be the engine of economic growth in the developed world. As one McKinsey analysis concluded, “For economic growth to match
its historical rates, virtually all of it must come from increases in labor productivity.”78 Growth in labor
productivity is partially a function of capital investment, but mostly a function of technological
innovation. The key question is whether the pace of technological innovation will sustain itself.
This remains a known unknown. The pace of innovation relative to global population has slowed dramatically over the
past fifty years.79 Consider that the developed world still relies on the same general purpose technologies of modern society that were originally invented 50-100 years ago: the
automobile, airplane, telephone, refrigerator, and computer. To be sure, all of these technologies have improved in recent decades, in some cases dramatically. But nothing new has replaced
them. And even these improvements have not necessarily had dramatic systemic effects. For example, the average speed on a passenger aircraft has actually fallen since the introduction of
the Boeing 707 in 1958, because of the need to conserve fuel. For all of the talk of “disruptive innovations,” the effect of these disruptions on both the business world and aggregate economic
growth have been exaggerated.80

At present, many of the fields that seem promising for innovation—nanotechnology, green energy, and so forth—require massive fixed investments. Only large institutions, like research
universities, multinational corporations and government entities, can play in that kind of game. Joseph Schumpeter warned that once large organizations became the primary engine of
innovation, the pace of change would naturally slow down. Because large organizations are inherently bureaucratic and conservative, they will be less able to imagine radical innovations.81
What if the “secular stagnation” debate is really just a harbinger of a deeper debate about a return to pre-19th century growth levels?

An obvious counter to this argument is that the pace of technological innovation in laptops, smart phones, tablets, and the Internet of things has accelerated. This is undeniably true—but the
problem is that the gains in utility have not been, strictly speaking, economic. Most of the important innovations that we think about with respect to the Internet—Facebook, Twitter,
Wikipedia, YouTube and so forth —are free technologies for consumers. As Tyler Cowen argues, “The big technological gains are coming in revenue-deficient sectors.”82 They generate lots of
enjoyment but little employment. The largest and most dynamic information technology firms, like Google and Apple, hire only a fraction of the people who worked for General Motors in its
heyday. At the same time, Internet-based content has eroded the financial viability of other parts of the economy. Content-providing sectors—such as music, entertainment, and journalism—
have suffered directly. The growth of “sharing economy” firms like Uber and Airbnb that develop peer-to-peer markets are causing similar levels of creative disruption to the travel and tourism
sectors.83 The rapid acceleration of automation is also leading to debates about whether the “lump of labor” fallacy remains a fallacy—in other words, whether displaced workers will be able
to find new employment.84

A slow-growth economic trajectory also creates policy problems that increase the likelihood of even
slower growth. Higher growth is a political palliative that makes structural reforms easier. For example, Germany
prides itself on the “Hartz reforms” to its labor markets last decade, and has advocated similar policies for the rest of the Eurozone since the start of the 2008 financial crisis. But the Hartz

In a low-growth
reforms were accomplished during a global economic upswing, boosting German exports and cushioning the shortterm cost of the reforms themselves.

world, other economies will be understandably reluctant to engage in such reforms.

It is possible that concerns about a radical growth slowdown are exaggerated. In 1987, Robert Solow famously said, “You can see the computer age everywhere but in the productivity
statistics.”85 A decade later, the late 1990s productivity surge was in full bloom. Economists are furiously debating whether the visible innovations in the information sector are leading to
productivity advances that are simply going undetected in the current productivity statistics.86 Google’s chief economist Hal Varian, echoing Solow from a generation ago, asserts that “there is
a lack of appreciation for what’s happening in Silicon Valley, because we don’t have a good way to measure it.”87 It is also possible that current innovations will only lead to gains in labor
productivity a decade from now. The OECD argues that the productivity problem resides in firms far from the leading edge failing to adopt new technologies and systems.88 There are plenty of
sectors, such as health or education, in which technological innovations can yield significant productivity gains. It would foolhardy to predict the end of radical innovations.

But the possibility of a technological slowdown is a significant “known unknown.” And if such a
slowdown occurs, it would have catastrophic effects on the public finances of the OECD economies. Most of
the developed world will have to support disproportionately large numbers of pensioners by 2036; slower-growing economies will worsen the debt-

to-GDP ratios of most of these economies, causing further macroeconomic stresses—and, potentially, political
unrest from increasingly stringent budget constraints.89
2. Are there hard constraints on the ability of the developing world to converge to developed-country living standards?

One of the common predictions made for the next generation economy is that China will displace the United States as the world’s biggest economy. This is a synecdoche of the deeper forecast
that per capita incomes in developing countries will slowly converge towards the living standards of the advance industrialized democracies. The OECD’s Looking to 2060 report is based on “a
tendency of GDP per capita to converge across countries” even if that convergence is slow-moving. The EIU’s long-term macroeconomic forecast predicts that China’s per capita income will
approximate Japan’s by 2050.90 The Carnegie Endowment’s World Order in 2050 report presumes that total factor productivity gains in the developing world will be significantly higher than
countries on the technological frontier. Looking at the previous twenty years of economic growth, Kemal Dervis posited that by 2030, “The rather stark division of the world into ‘advanced’
and ‘poor’ economies that began with the industrial revolution will end, ceding to a much more differentiated and multipolar world economy.”91

Intuitively, this seems rational. The theory is that developing countries have lower incomes primarily because they are capital-deficient and because their economies operate further away from
technological frontier. The gains from physical and human capital investment in the developing world should be greater than in the developed world. From Alexander Gerschenkron forward,
development economists have presumed that there are some growth advantages to “economic backwardness”92

This intuitive logic, however, is somewhat contradicted by the “middle income trap.” Barry Eichengreen, Donghyun Park, and Kwanho Shin have argued in a series of papers that as an
economy’s GDP per capita hits close to $10,000, and then again at $16,000, growth slowdowns commence.93 This makes it very difficult for these economies to converge towards the per
capita income levels of the advanced industrialized states. History bears this out. There is a powerful correlation between a country’s GDP per capita in 1960 and that country’s per capita
income in 2008. In fact, more countries that were middle income in 1960 had become relatively poorer than had joined the ranks of the rich economies. To be sure, there have been success
stories, such as South Korea, Singapore, and Israel. But other success stories, such as Greece, look increasingly fragile. Lant Prichett and Lawrence Summers conclude that “past performance is
no guarantee of future performance. Regression to the mean is the single most robust and empirical relevant fact about cross-national growth rates.”94

Post-2008 growth performance of the established and emerging markets matches this assessment. While most of the developing world experienced rapid growth in the previous decade, the
BRICS have run into roadblocks. Since the collapse of Lehman Brothers, these economies are looking less likely to converge with the developed world. During the Great Recession, the non-
Chinese BRICS—India, Russia, Brazil, and South Africa—have not seen their relative share of the global economy increase at all.95 China’s growth has also slowed down dramatically over the
past few years. Recent and massive outflows of capital suggests that the Chinese economy is headed for a significant market correction. The collapse of commodity prices removed another
source of economic growth in the developing world. By 2015, the gap between developing country growth and developed country growth had narrowed to its lowest level in the 21st
century.96

What explains the middle income trap? Eichengreen, Park and Shin suggest that “slowdowns coincide with the point in the growth process where it is no longer possible to boost productivity
by shifting additional workers from agriculture to industry and where the gains from importing foreign technology diminish.”97 But that is insufficient to explain why the slowdowns in growth
have been so dramatic and widespread.
There are multiple candidate explanations. One argument, consistent with Paul Krugman’s deconstruction of the previous East Asia “miracle,”98 is that much of this growth was based on
unsustainable levels of ill-conceived capital investment. Economies that allocate large shares of GDP to investment can generate high growth rates, particularly in capital-deficient countries.
The sustainability of those growth rates depends on whether the investments are productive or unproductive. For example, high levels of Soviet economic growth in the 1950s and 1960s
masked the degree to which this capital was misallocated. As Krugman noted, a lesser though similar phenomenon took place in the Asian tigers in the 1990s. It is plausible that China has been
experiencing the same illusory growth-from-bad-investment problem. Reports of overinvestment in infrastructure and “ghost cities” are rampant; according to two Chinese government
researchers, the country wasted an estimated $6.8 trillion in “ineffective investment” between 2009 and 2013 alone.99

A political explanation would be rooted in the fact that many emerging markets lack the political and institutional capabilities to sustain continued growth. Daron Acemoğlu and James
Robinson argue that modern economies are based on either “extractive institutions” or “inclusive institutions.”100 Governments based on extractive institutions can generate higher rates of
growth than governments without any effective structures. It is not surprising, for example, that post-Maoist Chinese economic growth has far outstripped Maoist-era rates of growth.
Inclusive institutions are open to a wider array of citizens, and therefore more democratic. Acemoğlu and Robinson argue that economies based on inclusive institutions will outperform those
based on extractive institutions. Inclusive institutions are less likely to be prone to corruption, more able to credibly commit to the rule of law, and more likely to invest in the necessary public
goods for broad-based economic growth. Similarly, Pritchett and Summers conclude that institutional quality has a powerful and long-lasting effect on economic growth—and that “salient
characteristics of China—high levels of state control and corruption along with high measures of authoritarian rule—make a discontinuous decline in growth even more likely than general
experience would suggest.”101

A more forward-looking explanation is that the changing nature of manufacturing has badly disrupted the 20th century pathway for economic development. For decades, the principal
blueprint for developing economies to become developed was to specialize in industrial sectors where low-cost labor offered a comparative advantage. The resulting growth from export
promotion would then spill over into upstream and downstream sectors, creating new job-creating sectors. Globalization, however, has already generated tremendous productivity gains in
manufacturing—to the point where industrial sectors do not create the same amount of employment opportunities that they used to.102 Like agriculture in the developed world,
manufacturing has become so productive that it does not need that many workers. As a result, many developing economies suffer from what Dani Rodrik labels “premature
deindustrialization.” If Rodrik is correct, then going forward, manufacturing will fail to jump-start developing economies into higher growth trajectories—and the political effects that have
traditionally come with industrialization will also be stunted.103

Both the middle-income trap and the regression to the mean observation are empirical observations about the past. There is no guaranteeing that these empirical regularities will hold for the
future. Indeed, China’s astonishing growth rate over the past 30 years is a direct contradiction of the regression to the mean phenomenon. It is possible that over time the convergence
hypothesis swamps the myriad explanations listed above for continued divergence. But in sketching out the next generation global economy, the implications of whether regression to the
mean will dominate the convergence hypothesis are massive. Looking at China and India alone, the gap in projections between a continuation of past growth trends and regression to the
mean is equivalent to $42 trillion—more than half of global economic output in 2015.104 This gap is significant enough to matter not just to China and India, but to the world economy.

As with the developed world, a growth slowdown in the developing world can have a feedback effect that makes
more growth-friendly reforms more difficult to accomplish. As Chinese economic growth has slowed, Chinese
leader Xi Jinping’s economic reform plans have stalled out in favor of more political repression. Follows the recent

playbook of Russian President Vladimir Putin, who has added diversionary war as another distracting tactic from negative

economic growth. Short-term steps towards political repression will make politically risky steps towards
economic reform that less palatable in the future. Instead, the advanced developing economies seem set to
double down on strategies that yield less economic growth over time.
3. Will geopolitical rivalries or technological innovation alter the patterns of economic interdependence?

Multiple scholars have observed a secular decline in interstate violence in recent decades.105 The Kantian triad of more democracies, stronger multilateral institutions, and greater levels of
cross-border trade is well known. In recent years, international relations theorists have stressed that commercial interdependence is a bigger driver of this phenomenon than previously
thought.106 The liberal logic is straightforward. The benefits of cross-border exchange and economic interdependence act as a powerful brake on the utility of violence in international politics.
The global supply chain and “just in time” delivery systems have further imbricated national economies into the international system. This creates incentives for governments to preserve an
open economy even during times of crisis. The more that a country’s economy was enmeshed in the global supply chain, for example, the less likely it was to raise tariffs after the 2008
financial crisis.107 Similarly, global financiers are strongly interested in minimizing political risk; historically, the financial sector has staunchly opposed initiating the use of force in world
politics.108 Even militarily powerful actors must be wary of alienating global capital.

Globalization therefore creates powerful pressures on governments not to close off their economies through protectionism or military aggression. Interdependence can also tamp down
conflicts that would otherwise be likely to break out during a great power transition. Of the 15 times a rising power has emerged to challenge a ruling power between 1500 and 2000, war
broke out 11 times.109 Despite these odds, China’s recent rise to great power status has elevated tensions without leading to anything approaching war. It could be argued that the Sino-
American economic relationship is so deep that it has tamped down the great power conflict that would otherwise have been in full bloom over the past two decades. Instead, both China and
the United States have taken pains to talk about the need for a new kind of great power relationship. Interdependence can help to reduce the likelihood of an extreme event—such as a great
power war—from taking place.

Will this be true for the next generation economy as well? The two other legs of the Kantian triad—democratization and multilateralism—are facing their own problems in the wake of the
2008 financial crisis.110 Economic openness survived the negative shock of the 2008 financial crisis, which suggests that the logic of commercial liberalism will continue to hold with equal

But some international relations scholars doubt the power of globalization’s pacifying effects,
force going forward.

arguing that interdependence is not a powerful constraint.111 Other analysts go further, arguing that globalization
exacerbates financial volatility—which in turn can lead to political instability and violence.112

the continued growth of interdependence will stall out. Since 2008, for example, the
A different counterargument is that

growth in global trade flows has been muted, and global capital flows are still considerably smaller than
they were in the pre-crisis era. In trade, this reflects a pre-crisis trend. Between 1950 and 2000, trade grew, on average, more than twice as fast as global economic
output. In the 2000s, however, trade only grew about 30 percent more than output.113 In 2012 and 2013, trade grew less than economic output. The McKinsey Global Institute estimates that

While the stock of interdependence remains

global flows as a percentage of output have fallen from 53 percent in 2007 to 39 percent in 2014.114

high, the flow has slowed to a trickle. The Financial Times has suggested that the global economy has hit “peak trade.”115
 the level of interdependence will slowly decline, thereby weakening the
If economic growth continues to outstrip trade, then

liberal constraint on great power conflicts. And there are several reasons to posit why interdependence might
stall out. One possibility is due to innovations reducing the need for traded goods. For example, in the last decade, higher energy prices in the United States triggered investments into
conservation, alternative forms of energy, and unconventional sources of hydrocarbons. All of these steps reduced the U.S. demand for imported energy. A future in which compact fusion
engines are developed would further reduce the need for imported energy even more.116

A more radical possibility is the development of technologies that reduce the need for physical trade across borders. Digital manufacturing will cause the relocation of production facilities
closer to end-user markets, shortening the global supply chain.117 An even more radical discontinuity would come from the wholesale diffusion of 3-D printing. The ability of a single printer to
produce multiple component parts of a larger manufactured good eliminates the need for a global supply chain. As Richard Baldwin notes, “Supply chain unbundling is driven by a fundamental
trade-off between the gains from specialization and the costs of dispersal. This would be seriously undermined by radical advances in the direction of mass customization and 3D printing by
sophisticated machines…To put it sharply, transmission of data would substitute for transportation of goods.”118 As 3-D printing technology improves, the need for large economies to import
anything other than raw materials concomitantly declines.119

Geopolitical ambitions could reduce economic interdependence even further.120 Russia and China have
territorial and quasi-territorial ambitions beyond their recognized borders, and the United States has
attempted to counter what it sees as revisionist behavior by both countries. In a low-growth world, it is possible
that leaders of either country would choose to prioritize their nationalist ambitions over economic
growth. More generally, it could be that the expectation of future gains from interdependence—rather than
existing levels of interdependence—constrains great power bellicosity.121 If great powers expect that the
future benefits of international trade and investment will wane, then commercial constraints on
revisionist behavior will lessen. All else equal, this increases the likelihood of great power conflict going
forward.
 2NC California DA
California economy on the brink- decreased tax revenue means that any large
spending increases will push the economy into recession
Daniels, reporter for CNBC, 16 (Jeff, “California taxes: Economy is strong, but shortfall may be
coming”, CNBC, 5-26-16, https://www.cnbc.com/2016/05/26/californias-revenue-picture-dims.html,
accessed on 7-14, JM)

California's economy is on fire, but the state's finances are facing the cold reality of a revenue
slowdown. And experts blame the state's unusual tax system for the problem. "Right now, the surging tide of revenue is beginning to turn,"
Governor Jerry Brown said earlier this month at a press conference announcing a revised $122.2 billion state budget and potential deficits
ahead due to expiring tax increases. Brown
is urging Sacramento lawmakers to refrain from any massive new
spending programs, due to the possibility of an economic slowdown or recession. State legislators have been
holding budget committee hearings this week to discuss Brown's revised spending plan for California's next fiscal year, which begins July 1.
There's a June 15 deadline for the legislature to adopt a new state budget — and it comes as the governor's May revision warns that the state's
commitments in coming years "will exceed expected revenues" to the tune of more than $4 billion by fiscal 2019-20. Also, the
state this
month trimmed its current fiscal-year revenue forecast by about $1.9 billion due to April's lagging tax
receipts, including a shortfall in personal income taxes — that decline has come in part from stock
market fluctuations, which have brought lower capital gains. Also, the state's cap-and-trade quarterly
auction last week produced lower-than-expected revenues for the carbon emission permits up for sale.
"California has turned around and taken the volatility of the stock market and made it the central
component of the revenue system. There's nothing right about that, because what it means is that we're
constantly in either boom or bust." -Christopher Thornberg, founding partner, Beacon Economics "The revenue picture has
dimmed a little bit," said Gabriel Petek, a credit analyst for Standard & Poor's Credit Market Services. He noted that there are only three states
with a lower credit rating than California (New Jersey, Illinois and Kentucky). Nevertheless, California's economy still appears
strong.

Immigrants cause a significant fiscal drain on state budgets – California is uniquely at

risk
Penn Wharton, 16 (“The Effects of Immigration on the United States’ Economy”, Penn Wharton
University of Pennsylvania Budget Model, 6-27-16,
http://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the-effects-of-immigration-on-the-united-
states-economy, accessed on 7-14-18, JM)

More often than not, immigrants are less educated and their incomes are lower at all ages than those of
natives. As a result, immigrants pay less in federal, state, and local taxes and use federally-funded
entitlement programs such as Medicaid, SNAP, and other benefits at higher rates than natives. But they are
also less likely than comparably low income natives to receive public assistance. Moreover, when they do take public assistance, the average
value of benefits received is below average, implying a smaller net cost to the federal government relative to a comparable low income native.
However, immigrants often impose a heavier tax burden on natives at the state and local level. Immigrants
— particularly those with low levels of education and income — generally have larger families and more
children using public K-12 education, the largest component of state and local budgets. Furthermore, if
immigrants’ children are not already fluent English speakers, the per-student cost of education may be
substantially higher than for native-born children. These factors impose short-term costs on state budgets.
Over the long term, however, the upward economic mobility and taxpaying lifetime of second generation immigrants more than offset the
initial fiscal burden. Because the net cost to state and local governments is closely related to immigrants’ education and income, the
socioeconomic composition of the immigrant population determines the fiscal impact in each state. For
example, because New Jersey has a high proportion of well-educated and high income immigrants who
contribute more to state and local revenues than they consume in public services, the net fiscal burden
of immigration is small in New Jersey. In contrast, California’s high share of less-educated and low-
income immigrants means that immigrants’ contribution to state and local revenues is smaller relative
to their consumption of public services. As a result, the estimated fiscal burden of immigration is five
times higher for native residents of California than of New Jersey.

California outweighs—key driver of the overall recovery

McPhate 6/5
Mike McPhate, Columnist—NY Times, California Today: How California Helps the U.S. Economy, JUNE 5,
2017, https://www.nytimes.com/2017/06/05/us/california-today-how-california-helps-the-us-
economy.html?mcubz=0

On Friday, the United States recorded its 80th consecutive month of job growth, which is the longest
streak on record and has pushed the unemployment rate to 4.3 percent from 10 percent in the depths
of the recession. After a long and painful recovery, the nation is nearing full employment — and
California has played an outsize role.

Over the last five years, California has outperformed the nation in just about every important economic
metric. Yes, the state is big, accounting for about 12 percent of the nation’s population. But its share of
economic growth has been even bigger.

California accounted for 17 percent of job growth in the United States from 2012 to 2016, and a quarter
of the growth in gross domestic product.

“What these numbers say is that California is crucial to U.S. growth, far beyond what we could expect
from our population alone,” said Stephen Levy, director and senior economist of the Center for
Continuing Study of the California Economy in Palo Alto.

California was hit hard by the housing bust and recession, so it makes sense that the state would have a
stronger rebound. But it also shows how the recovery has been guided by what Mr. Levy calls “the three
Ts,” which are technology, trade and tourism.

San Francisco and the Silicon Valley have had a yearslong boom, while the Ports of Los Angeles and Long
Beach have been at the center of a rebound in container traffic and international trade. Hollywood has
done well, too: As cable channels and companies like Netflix and Amazon have ramped up their original
programming, Southern California has seen a surge in production jobs.

The downside to all this success is that the state now has quite a lot to lose. With a large immigrant
population and a huge port complex, California is at a much greater risk of being hurt by President
Trump’s muscular immigration policies and desire to curb imports and tear up trade agreements.
And, California education spending is key to cybersecurity research
Francesca SPIDALIERI 15. Senior Fellow, Pell Center for International Relations and Public Policy.
“STATE OF THE STATES ON CYBERSECURITY.” Pell Center. November. 12-3. http://sentinelips.com/wp-
content/uploads/2015/11/Pell-Center-State-of-the-States-Report.pdf.

California is home to some of the best universities, research institutions, and tech companies in the
nation. The job market for cybersecurity professionals is thriving, and the state is very active in supporting both private
enterprises and government entities as they proactively try to prevent new cyber threats, grow the
pipeline of cybersecurity professionals, and create more jobs in this field. Indeed, one of the California Cybersecurity
Task Force’s major objectives is to promote cybersecurity workforce development and industry growth. In particular, the Workforce
Development and Education Subcommittee obtained the California Human Resources Department’s support to study and address cybersecurity
workforce challenges within state government, and to identify the specific skill requirements for cybersecurity professionals to be employed by
California state agencies. In partnership with the Economic Development Subcommittee, they
are also working to strengthen the
workforce pipeline across the state, connect it to industry needs, and help senior state administrators
devise creative ways to improve cybersecurity education, research, and innovation.32 There is also a singular
effort to accommodate returning combat veterans in local cybersecurity training programs and provide them with educational and job
opportunities whether or not their military job was cyber-related.

Although most jurisdictions still operate separately from one another, there are some great examples of
public-private partnerships aiming at coordinating outreach to stakeholders around the state and
aligning different efforts to make California the preferred location for cyber business, education, and
research. For instance, the Task Force’s Economic Development Subcommittee launched the CyberCalifornia initiative to “help
further position California as a leader in cybersecurity as it relates to commerce and the Internet of Things (IoT)
technology.”33 CyberCalifornia is intended to facilitate cybersecurity research and innovation in the state; educate California
businesses about cybersecurity needs and resources; and connect California’s robust workforce
development system with the needs of employers in the state. As the Chair of this Subcommittee, Darin Andersen,
explained: “CyberCalifornia was established to help ‘spotlight’ the work of the Task Force, with a particular emphasis on the connections
between cybersecurity and economic development, and connect it to other important initiatives throughout the state.”34 CyberCalifornia will
also work in conjunction with the Innovation Hub (iHub) Network, a program administered by the Governor’s Office of Business and Economic
Development, dedicated to facilitating cybersecurity innovation and job creation for the benefit of California’s businesses and consumers. The
iHubs provide an innovation platform for startup companies, economic development organizations, business groups, and venture capitalists by
leveraging such assets as research parks, technology incubators, universities, and federal laboratories.

In addition to California setting the pace for other states seeking innovative ways to approach
cybersecurity challenges, it also hosts some of the most advanced tech labs and well-regarded
institutions of higher education, many of which offer undergraduate and graduate degrees in computer
science and cybersecurity and have established dedicated research centers. The University of Southern California
(USC), for instance, launched a Center for Computer Systems Security (CCSS), which focuses on the study of security technologies supporting
confidentiality, integrity, resiliency, privacy, intrusion detection and response, and survivability of critical infrastructure. CCSS works closely with
DETER—the Cyber Defense Technology Experimental Research project—which operates a leading cybersecurity experimentation lab and
supports research and development of next-generation cybersecurity technologies.35 In 2011, USC was awarded a 5-year, $16-million contract
from the U.S. Department of Homeland Security to further expand and improve the DETERlab testbed and provide additional research and
experimental opportunities at the USC Viterbi School of Engineering’s Information Sciences Institute.

Moreover, UCBerkeley, Stanford University, and San José State University are part of the Team for
Research in Ubiquitous Secure Technology (TRUST), a National Science Foundation Science and Technology
Center dedicated to “the development of cybersecurity science and technology that will radically
transform the ability of organizations to design, build, and operate trustworthy information systems for
the nation’s critical infrastructure.”36 These and other higher education institutions in California have been able to take advantage
of federal funding opportunities to enhance and expand their cybersecurity education and research programs. The California State Polytechnic
University, the California State University in Sacramento, and the Naval Postgraduate School offer the highly selective NSF CyberCorps
Scholarship for Service for students to study cybersecurity and, along with five other academic institutions, have received designation as
NSA/DHS Centers of Excellence in Information Assurance Education & Research.

Finally, the California Office of Information Security, the College of Engineering and Computer Science, and the College of Continuing Education
at Sacramento State have partnered to deliver an Information Security Leadership Academy Certificate Program to state and local government
employees in the information security field that want to upgrade their skills and ensure that their agency’s information is reliable, available, and
secure.37

Cyberterrorism causes nuclear war

Richard ANDRES 15. Professor of National Security Strategy, National War College; Energy and
Environment Security Policy Chair, Institute for National Strategic Studies. “National Security and US
Constitutional Rights: The Road to Snowden,” in Cybersecurity and Human Rights in the Age of
Cybersurveillance, retrieved from Research Gate.
The precedent Obama set by openly discussing cyber conflict was followed by a series of current and former national security leaders. In 2010,
former director of National Intelligence Admiral Mike McConnell revealed more about why Obama had gone public when he warned that the
United States was losing a cyberwar. Still somewhat ambiguously, he noted that a cyberwar could have implications on par
with a nuclear war. 3 Over the next few months, military and civilian government officials from both the
Democratic and Republican parties offered similar warnings.¶ The specific threats government officials pointed to tended
to fall into [8.18] three categories. The first involved attacks on critical infrastructure. The danger, officials warned, was that the United States
depended on the critical infrastructures that provided communications, finance, transportation,
drinking water, and electricity for its survival. Of these, electricity was the most important; if it failed, all
other critical infrastructures would stop working as well. Over the last two decades, all infrastructures have been
connected to computer networks. If an opponent could hack into the computer, it could destroy the physical infrastructure. In a worst-case
scenario, the loss of life resulting from such attacks would run into the tens of millions. 4¶ In 2009, despite official
warnings, private experts expressed doubt about [8.19] the ability of malware to destroy physical infrastructure. However, one year after
Obama’s speech, a Belarussian computer security company discovered that military-grade malware designed to destroy centrifuges (Stuxnet)
had infected an air-gapped Iranian computer network at its Natanz nuclear facility.5 The centrifuges utilized the same SCADA (Supervisory
Control and Data Acquisition) infrastructure as most electric grids, and the malware had spread and infected thousands of power utilities
around the world. If malware could be designed to physically destroy air-gapped, ultrasecure, Iranian military hardware, it could be built to
destroy standard unprotected power grids. Over the next two years, power companies increasingly scanned their systems for intrusion. Nearly
two-thirds found malware on their systems designed for sabotage.6¶ Malware of the type discovered in U.S. critical infrastructure could
potentially be used to attack the country in two ways. The first involves a massive coordinated attack akin to
a nuclear strike. A successful attack of this nature could result in massive financial costs and loss of life.
The second involves a modulated attack of the type Stuxnet executed against Iran’s nuclear program. The idea here would be to
create damaging effects beneath the threshold that would invite conventional or nuclear retaliation from the
United States. Although either type of attack would be difficult to execute, this type of malware potentially presents state and
nonstate adversaries with the ability to inexpensively project destructive power into the United States.
Proposed defenses against this type of attack usually involved private U.S. companies paying a good deal of money to fight off attacks and
allowing significant government regulation and intrusion into their systems.¶ The second type of threat the U.S. government warned of involved
espionage. Throughout the early 2000s, Chinese and Russian cyber-spying activities had often been publicized in the news. Government officials
and organizations successfully targeted included Barack Obama and John McCain during the 2008 presidential race, 7 the French prime
minister’s office, the office of German chancellor Angela Merkel, and most U.S. departments and agencies.8 Not surprisingly, given that the
United States also engages in espionage, U.S. officials seldom made much of this type of spying. What U.S. officials did begin to protest around
2010, however, involved foreign militaries engaged in corporate espionage against private U.S. citizens, IP-producing businesses, and news
organizations. 9¶ From the U.S. perspective, espionage against government organizations is an accepted part of international relations, but
using state power to conduct corporate espionage is not. However, China and other nations do not make this distinction. In 2009, Obama
warned of the threat of cyber espionage and placed global annual financial loss due to intellectual property theft at one trillion dollars; NSA
director Keith Alexander placed annual U.S. losses at $338 billion.10 Given that the United States mainly produces IP for international trade
rather than physical goods, they warned that the massive loss of IP is a significant threat to its economy. It could be argued, for instance, that
the $338 billion in annual losses Alexander describes equate to around half of all U.S. unemployment and virtually the entire economic
slowdown after 2008.¶ Along with protests about economic espionage, the administration pointed to China’s hacking of U.S. organizations to
gather information to use against its own dissidents. These actions became public knowledge in 2010 when Google announced that the Chinese
government hackers had gained access to the Gmail accounts of Chinese human rights activists. 11 The attack on a U.S. news media
represented an attack on freedom of speech. The incident provoked a strong statement from the State Department, which China appears to
have disregarded.12¶ Detecting and preventing attacks by foreign militaries on private U.S. citizens and firms would be difficult. If citizens could
not protect themselves, the alternative involved the U.S. government monitoring private networks with whatever that might imply for loss of
privacy¶ The third threat described by government officials involved terrorism. The main threat described involved Al-Qaeda
and
similar groups using the Internet as virtual territory. In the wake of 9/11, U.S. military operations in
Afghanistan and the threat of reprisal against governments that harbored terrorists deprived Al-Qaeda
of physical geography. Subsequently, the organization moved its operations to cyberspace. 13 Within a
few years of the Twin Towers attack, it would not be unreasonable to describe Al-Qaeda as mainly a
cyber-based organization. More recently, ISIS/Daesh has taken this to a new level by using cyber
recruiting to gain an army from around the globe large enough to hold physical territory in Iraq and
Syria.
 Ext-Cali I/L
Cali education budget on brink now.
Sharon NOGUCHI 17. Covers preschool through high school for the Bay Area News Group. “K-12:
‘Tidal wave of expenses’ in looming California school budget crisis.” The Mercury News. July 2.
http://www.mercurynews.com/2017/07/02/tidal-wave-of-expenses-in-looming-california-school-
budget-crisis/.

SAN JOSE — Faced with significant salary hikes and ballooning health benefit and pensions, school districts
across the state scrambled to balance their budgets at the end of the fiscal year.¶ And the outlook for the
coming years is even worse.¶ Current and looming money problems beset school districts small and
large, from tiny San Bruno Park — deemed by the state to be at risk of insolvency — to the 41-school San Jose Unified,
which expects to cut 150 jobs before school reopens in August.¶ “It’s like a tidal wave of expenses coming our way,” said San
Jose Unified trustee Kimberly Meek.¶ Across the state, districts struggled to adopt balanced budgets by June 30 for the next
three years, as required by law.¶ “Two-thirds of districts I look at have problems in the third year with deficit spending,”
said Ron Bennett, CEO of School Services of California, which advises 850 of the state’s roughly 1,000 districts. About one-third see
problems in the second year, and a handful are making big cuts in the first year, 2017-’18, he said.¶ Among
them is Cupertino Union, which faces a $5.6 million deficit next year — even after laying off staff and making $2.6 million in cuts this spring,
CBO and co-interim Superintendent Chris Jew said.¶ It just may be that in 10 years, schools will look back on 2017 as the last good year in
recent times for public education.¶ “We will look back on what has been sacrificed, and what we had to let go,” said Cupertino district
spokesman Jeff Bowman.¶ Despite
a bright economic climate, voter-approved state tax hikes and $74.5 billion
that California will devote to K-12 education and community colleges in 2017-’18 — a $3.1 billion year-
over-year increase — schools are in financial distress.¶ Put simply, the state budget includes a 1.56 percent
cost-of-living increase to districts amid costs that are rising at a starkly higher rate. So districts must cut
programs or find out-of-the-box solutions.¶ To avoid “draconian budget cuts” in the coming school year, the East Side Union
High School District board in San Jose signaled that it is prepared to cut 140 jobs in the two years after that, unless negotiations with employee
unions come up with other savings. Otherwise, the district faces being $27 million in the hole in 2019-’20.¶ “The last thing the board and I want
to do is lay any employee off,” Superintendent Chris Funk said.¶ The cuts will be hard to make. With extra cash from the state in
recent years, Funk noted, the district has put in place a wider safety net for its students, many from needy families. It’s not anxious to
dismantle programs contributing to student success.¶ But stability for California public schools has been elusive as funding
fluctuates with the economy and tax revenues.¶ With a currently healthy state budget, the biggest threat to balanced
school budgets is the growing bite taken by public retirement systems — CalSTRS for teachers and CalPERS for
support staff. Next school year, those assessments will be about 15 percent of employer payroll. Four years from now, the CalPERS obligation
will exceed one-quarter of salaries and is scheduled to continue growing in an effort to enable it to better cover its projected retirement
payouts. District payments to CalSTRS will jump up to 19.1 percent of payroll.¶ The increases already have had an effect. In the past school year,
San Jose Unified’s contributions to retirement systems were more than 2½ times what they were in 2006-07. It’s a $22.3 million increase.¶ “If
the school district gives no raises, our employee costs will still be significantly more year over year,” Deputy Superintendent Stephen McMahon
said. “That’s a really tough message for people to understand.”¶ While the beneficiaries of pensions include local teachers and janitors,
secretaries and classroom aides, the costs to districts are set in Sacramento.¶ The Bay Area’s high cost of living imposes an additional toll on
schools. With young families unable to afford housing, school enrollment is declining in many areas, and with it attendance-based school
funding.¶ In San Jose Unified, administrators aim to shed 150 jobs — and anticipate more cuts.¶ “We are facing challenges much bigger than
the school district can fix,” McMahon said.¶ While the crisis looms in the future for most schools, the wolf has arrived at the door of the San
Bruno Park district. Deemed by San Mateo County Office of Education to be in fiscal crisis, the small district racked up a $1.6 million deficit — 9
percent of its revenue — in the past school year. The district runs six elementary and one middle school for fewer than 2,700 students.¶ Board
President Henry Sanchez blamed outsourcing of special-education services as a factor in running up expenses.¶ The county office of education
has been advising San Bruno Park, which has gone through four top business officials in two years. To get the district on a stable footing will
take some time, said Denise Porterfield, deputy superintendent of the county office of education.¶ “I’m estimating no less than a year,” she
said.¶ Other school districts fear ending up as beleaguered as San Bruno Park.¶ “If
this path continues, there’s no way we can
provide services to students,” San Jose Unified’s McMahon said. “We are facing challenges much bigger than the
school district can fix.”
Crushes Silicon Valley.
Richard SCOTT AND Michael KIRST 8/10. *Professor Emeritus of Sociology, Stanford. **Professor
Emeritus of Education, Stanford; President of the California State Board of Education. “Stanford
professors examine higher education against innovative Bay Area landscape in new book.” Stanford
News. 2017. http://news.stanford.edu/2017/08/10/stanford-professors-examine-higher-education-bay-
area/.

The San Francisco Bay Area, notably Silicon Valley, is known for its ingenuity and rapid growth, thanks in part to the global
technology companies that reside there.¶ An important industry that Silicon Valley depends on is higher education,
but it appears that this relationship is an uneasy one, according to Dick Scott and Mike Kirst, two emeriti Stanford faculty members. They,
together with a team of colleagues associated with the John W. Gardner Center for Youth and Their Communities, have completed a
longitudinal study describing developments in this area over the past 45 years (1970 to 2015).¶ In their new book, Higher Education and Silicon
Valley: Connected but Conflicted, they detail the struggles of the Bay Area’s post-secondary educational institutions against the landscape of
the region’s thriving and ever-changing economy. The research covers more than 350 postsecondary organizations in the Bay Area, including
traditional degree-granting colleges and universities, community colleges and privately run vocational and professional schools.¶ Stanford News
Service spoke to Kirst and Scott about their new book.¶ Why is there a “mismatch” between higher education and the Bay Area?¶ Scott: While
the two “fields” – higher
education and Silicon Valley firms – share important values, including a keen
interest in developing and using knowledge and a reliance on networks of professionals and specialists,
they are mismatched in many ways. The two fields developed under different conditions, operate under different pressures and often serve
different missions, so it is not surprising that they differ substantially in their values, norms and pace of change. In colleges -– particularly
degree programs – the pace of change has been relatively leisurely. In contrast, Silicon Valley has renewed itself multiple times in recent
decades.¶ Kirst: At the policy level, we’re operating under a master plan for higher education that was approved in 1960 and has never been
overhauled in a major way since then. For example, the master plan didn’t anticipate an economy that needed so much rapid reskilling of adults
– many of whom have a solid education. The regional economy changes at an exponential rate whereas the higher education sector
experiences at best incremental change.¶ What challenges does this “mismatch” create for the area?¶ Scott: Today, there is a real divergence
between the needs of the Valley and the capacity of the system. The
numbers of high school graduates eligible for the
University of California or state colleges have increased through this period but the supply of student
slots has barely moved, to the point where almost half cannot be accommodated. The only serious growth in the
public system has been with community colleges, which now enroll more than half of all students.¶ Kirst: The Bay Area hosts only three state
colleges today – just as in 1960 – although the population of the region has increased from 4.6 million in 1970 to more than 7 million.¶ But,
even community colleges are struggling, right?¶ Scott: Yes, they are also badly underfunded. They’re trying to do this dual
mission – workforce training and transfer-degree programs – and that’s important. But they don’t have the capacity do either very well.
Increasingly, in order to meet the demands of the local economy, they’re adding more and more adjunct professors – who often have more
recent workforce know-how – but this cuts into the numbers of full-time faculty that are doing liberal arts. The
majority of students
today want to do the transfer program, so there’s continued demand from students who want a degree.
But there are also strong pressures from the economy, which wants people who are trained to do a job right now. The community
colleges are really between a rock and a hard place.¶ What do the private-for-profit entities bring to the mix?¶ Kirst: Most of
these programs are certificate rather than degree-granting programs. The former is approved by the Department of Consumer Affairs – it’s like
running a restaurant. Nimble private operators are filling these supply-and-demand gaps, but without any serious oversight or quality control.
Indeed, we are genuinely ignorant of what these programs are doing: the quality of their staff, the numbers of their students and graduates.¶
Your book talks about “cross-pressures” degree-granting institutions are experiencing between commitment to providing a broad liberal
education and attention to marketable skills. What will be the effect on these institutions if they cater more toward marketable skills?¶ Scott:
The university and liberal arts colleges are a unique societal resource in charge of long-term
stewardship of basic research and advancement and preservation of knowledge. And that’s their distinctive
mission. If they don’t do it, there won’t be anyone to do it. On that resource, the whole development of our democratic
political system and our modern economy is based. Without educated citizens, our democracy is in peril; without that
basic research conducted 30, 40 or 50 years ago, the things we’re seeing now in industry could not have
happened.¶ Universities like Stanford, with their strong programs in engineering and computer science, currently have sufficient resources
to serve both the market and liberal arts agenda. But most schools can’t do that. We see a steady shift over the time of our research in the
proportion of degrees granted in vocational or professional areas, as well as in the ratio of adjunct to tenure-track faculty.¶ Your research
covered 45 years of Bay Area higher education. What is unknown?¶ Kirst: A lot. Of the more than 350 schools we examined, only about one-
third are degree-granting and covered in a national database [National Center for Educational Statistics]. We have very little information about
the characteristics and functioning of the very large post-secondary educational sector in this country.¶ Scott: In many cases, we don’t know
much about the systems that are providing the education. If you examine their websites, in some cases, we found that the same person is listed
as the officer in charge in four different systems! We don’t know much about the number of students served or the quality of their education or
training.¶ What measures can be taken to fix this problem?¶ Kirst: Well, first, there is not one but many problems. The
beginning of
wisdom is the recognition of the complexity of the educational systems at work. Also, we need to raise
awareness of the current state of higher education. National polling data regularly find that the public is attentive to and
dissatisfied with K-12 schooling, but much more sanguine about higher education. Most problems are attributed to the student, not to the
system.
 Ext-Cali Cyber
Key to cyber-defense.
Kenneth SLAGHT 17. US Navy (ret.) rear admiral; co-chair and president of the Cyber Center of
Excellence. “How San Diego can lead America in cyberwarfare innovation.” San Diego Tribune. April 6.
http://www.sandiegouniontribune.com/opinion/commentary/sd-utbg-cyber-security-slaght-20170406-
story.html

When I joined the Navy in 1970, the projection of Naval sea power was all about strategies to deploy Marines, ships, submarines and aircraft above, below, and on the sea.Today,
there’s a new complication — cybersecurity — as data has become weaponized and hackers seek to
attack all manner of targets — companies, cities, nations, even the ships where I once worked.¶ At the same time, cyber
attackers, and their rising diversity and sophistication, offer an opportunity to innovate and grow new markets. You can see what that
looks like in San Diego, where I live and work.¶ San Diego has long been a center of America’s national defense, and the infrastructure and businesses that support it. The cyber age

— and San Diego’s savvy response to it — has changed the nature of that defense. The San Diego region
is now home to more than 100 cybersecurity companies that employ 4,230 people. That’s on top of the 3,390 employees who work at the U.S.
Navy’s Space and Naval Warfare Command (SPAWAR). And those numbers are growing rapidly.¶ In just two years, between 2013 and 2015, information security

analysts grew by 13.9 percent per year on average in San Diego, nearly double the national 7 percent
average, and employers expect their cybersecurity workforce to grow by an additional 13 percent in the coming year, according to a 2016 study for which my nonprofit and other San
Diego institutions conducted research. The annual economic impact of the industry is already estimated at $1.9 billion —
that’s the equivalent of hosting four Super Bowls each year — and puts San Diego on par with sister-cyber hubs in Silicon Valley and Maryland.¶ This rapid growth is not merely a matter of
technological change. It reflects strategic efforts by people and sectors across San Diego — the military and intelligence community, high tech industries, academia, municipalities, utilities,
transportation agencies, and the region’s various governments — to become a leader in cybersecurity.¶ I play a role as leader of the San Diego Cyber Center of Excellence (CCOE), a nonprofit
established in 2014 by cyber industry, higher education and government leaders to address cybersecurity challenges here. To become a center of this new line of defense, the region has had to
tackle three tasks crucial to the sector’s success. San Diego is cultivating a cyber workforce, showcasing its successes in cutting-edge technologies, and fostering a more secure cyber
environment across the region’s institutions. (Being a leader in cybersecurity can make you a bigger target to attack.)¶ These challenges resulted from regional economic planning, in particular
the San Diego Regional Economic Development Corp.’s cybersecurity economic impact study. In some places, regional economic reports get dismissed, but not this report and not here. The
report identified a clear top challenge: the sourcing and development of a cyber workforce.¶ This is what drew me to this work and the CCOE — the opportunity to help find and secure the
next generation of cyber warriors was too good to pass up.¶ To start, our team convened leaders in industry, government and all 15 of the cybersecurity, computer science and engineering
deans from regional universities, colleges and extended studies programs to discuss greater alignment between academic supply and industry demand. The collaboration has been highly
productive. It helped create a catalog of courses that universities and programs offered, or could add, to meet the skill sets sought by the industry. It also generated a regional cyber Job Board,
as well as an Internship Pipeline and Link2Cyber programs that connect students, recent graduates, veterans and seasoned professionals with career opportunities in the region.¶ Not only are
these cybersecurity positions in demand, but the average annual salary for analysts, computer scientists and software developers is six figures, according to that 2016 economic impact study

The region’s
that CCOE helped conduct.¶ The combination of wages and opportunity have made San Diego a hot spot for talent, investment and research and development.

universities and colleges annually graduate 3,000 students in the computer science and engineering
fields. The University of San Diego and California State University San Marcos recently launched
cybersecurity masters programs with industry-driven curricula to help feed the pipelines. The region’s
higher education sector also supports trailblazing research at facilities like the Super Computing Center
at UC San Diego and the Advanced Computing Environments Laboratory at San Diego State University.¶
Demand for talent is being driven by a convergence of commercial security and defense security. This creates a real community around cybersecurity. Industry leaders such as Qualcomm,
ESET, ViaSat and iboss call San Diego home, citing access to clients, customers, vendors, suppliers and proximity to SPAWAR as the region’s greatest strengths.¶ San Diego is likely to see more
growth as the industry moves toward private sector customers. The share of firms focused primarily on the commercial market (as opposed to military and defense) has grown substantially,
now constituting 47 percent of the sector in San Diego. This shift reflects the importance of practical applications of cybersecurity, like protecting health care and financial data, and energy and

This is good news in an age where the Internet of Things (IoT), electromagnetic pulse (EMP) blasts, mass grid
water grids.¶

outages and ransomware attacks are no longer just Marvel Comics storylines.¶ San Diego as a regional hub is also mobilizing to
address potential threats to its own infrastructure. The Secure San Diego initiative, launched earlier this year, is, among other things, generating a regional cyber response map for businesses
and a regional incident response management plan similar to state of emergency protocols used in natural disasters.¶ Sometimes I marvel at how threats and defense strategies have evolved
since my time as commander of SPAWAR, but the one constant of war remains: You can’t go it alone. While San Diego has developed a cybersecurity sector, cyber threats have no geographic

San Diego can serve as a template to mobilize

or industry bounds, and the need for qualified cybersecurity workers is increasing.¶ My hope is that

other regions to adopt best practices and grow our nation’s next generation of cyber warriors,
defenses and innovations.¶ San Diego is cultivating a cyber workforce, showcasing its successes in
cutting-edge technologies, and fostering a more secure cyber environment across the region’s
institutions.
Extinction.
Richard ANDRES 15. Professor of National Security Strategy, National War College; Energy and
Environment Security Policy Chair, Institute for National Strategic Studies. “National Security and US
Constitutional Rights: The Road to Snowden,” in Cybersecurity and Human Rights in the Age of
Cybersurveillance, retrieved from Research Gate.
The precedent Obama set by openly discussing cyber conflict was followed by a series of current and former national security leaders. In 2010,
former director of National Intelligence Admiral Mike McConnell revealed more about why Obama had gone public when he warned that the
United States was losing a cyberwar. Still somewhat ambiguously, he noted that a cyberwar could have implications on par
with a nuclear war. 3 Over the next few months, military and civilian government officials from both the
Democratic and Republican parties offered similar warnings.¶ The specific threats government officials pointed to tended
to fall into [8.18] three categories. The first involved attacks on critical infrastructure. The danger, officials warned, was that the United States
depended on the critical infrastructures that provided communications, finance, transportation,
drinking water, and electricity for its survival. Of these, electricity was the most important; if it failed, all
other critical infrastructures would stop working as well. Over the last two decades, all infrastructures have been
connected to computer networks. If an opponent could hack into the computer, it could destroy the physical infrastructure. In a worst-case
scenario, the loss of life resulting from such attacks would run into the tens of millions. 4¶ In 2009, despite official
warnings, private experts expressed doubt about [8.19] the ability of malware to destroy physical infrastructure. However, one year after
Obama’s speech, a Belarussian computer security company discovered that military-grade malware designed to destroy centrifuges (Stuxnet)
had infected an air-gapped Iranian computer network at its Natanz nuclear facility.5 The centrifuges utilized the same SCADA (Supervisory
Control and Data Acquisition) infrastructure as most electric grids, and the malware had spread and infected thousands of power utilities
around the world. If malware could be designed to physically destroy air-gapped, ultrasecure, Iranian military hardware, it could be built to
destroy standard unprotected power grids. Over the next two years, power companies increasingly scanned their systems for intrusion. Nearly
two-thirds found malware on their systems designed for sabotage.6¶ Malware of the type discovered in U.S. critical infrastructure could
potentially be used to attack the country in two ways. The first involves a massive coordinated attack akin to
a nuclear strike. A successful attack of this nature could result in massive financial costs and loss of life.
The second involves a modulated attack of the type Stuxnet executed against Iran’s nuclear program. The idea here would be to
create damaging effects beneath the threshold that would invite conventional or nuclear retaliation from the
United States. Although either type of attack would be difficult to execute, this type of malware potentially presents state and
nonstate adversaries with the ability to inexpensively project destructive power into the United States.
Proposed defenses against this type of attack usually involved private U.S. companies paying a good deal of money to fight off attacks and
allowing significant government regulation and intrusion into their systems.¶ The second type of threat the U.S. government warned of involved
espionage. Throughout the early 2000s, Chinese and Russian cyber-spying activities had often been publicized in the news. Government officials
and organizations successfully targeted included Barack Obama and John McCain during the 2008 presidential race, 7 the French prime
minister’s office, the office of German chancellor Angela Merkel, and most U.S. departments and agencies.8 Not surprisingly, given that the
United States also engages in espionage, U.S. officials seldom made much of this type of spying. What U.S. officials did begin to protest around
2010, however, involved foreign militaries engaged in corporate espionage against private U.S. citizens, IP-producing businesses, and news
organizations. 9¶ From the U.S. perspective, espionage against government organizations is an accepted part of international relations, but
using state power to conduct corporate espionage is not. However, China and other nations do not make this distinction. In 2009, Obama
warned of the threat of cyber espionage and placed global annual financial loss due to intellectual property theft at one trillion dollars; NSA
director Keith Alexander placed annual U.S. losses at $338 billion.10 Given that the United States mainly produces IP for international trade
rather than physical goods, they warned that the massive loss of IP is a significant threat to its economy. It could be argued, for instance, that
the $338 billion in annual losses Alexander describes equate to around half of all U.S. unemployment and virtually the entire economic
slowdown after 2008.¶ Along with protests about economic espionage, the administration pointed to China’s hacking of U.S. organizations to
gather information to use against its own dissidents. These actions became public knowledge in 2010 when Google announced that the Chinese
government hackers had gained access to the Gmail accounts of Chinese human rights activists. 11 The attack on a U.S. news media
represented an attack on freedom of speech. The incident provoked a strong statement from the State Department, which China appears to
have disregarded.12¶ Detecting and preventing attacks by foreign militaries on private U.S. citizens and firms would be difficult. If citizens could
not protect themselves, the alternative involved the U.S. government monitoring private networks with whatever that might imply for loss of
privacy¶ The third threat described by government officials involved terrorism. The main threat described involved Al-Qaeda
and
similar groups using the Internet as virtual territory. In the wake of 9/11, U.S. military operations in
Afghanistan and the threat of reprisal against governments that harbored terrorists deprived Al-Qaeda
of physical geography. Subsequently, the organization moved its operations to cyberspace. 13 Within a
few years of the Twin Towers attack, it would not be unreasonable to describe Al-Qaeda as mainly a
cyber-based organization. More recently, ISIS/Daesh has taken this to a new level by using cyber
recruiting to gain an army from around the globe large enough to hold physical territory in Iraq and
Syria.
 2NC Budgets UQ
State budgets stable now but tight—increasing spending pressures would unbalance it
MacKellar 12/19 Erica MacKellar, National Conference of State Legislatures (NCSL), December 19,
2017, “State Budget Actions: FY 2018”, http://www.ncsl.org/research/fiscal-policy/state-budget-actions-
fy-2018.aspx

As in recent years, state budget conditions are stable overall. Since the end of the Great Recession,
states have experienced a slow and steady rebound in state revenues. For FY 2018, states anticipate
that trend to continue with average projected general fund revenue growth of 3.9 percent. As states
closed their books on FY 2017, average general fund revenue growth was estimated at a modest 1.9
percent. While slow revenue growth has allowed states to balance their budgets, many noted a small
margin for error between FY 2018 revenue estimates and appropriations. Several states, including
Alaska, Missouri and Ohio, report weak revenue growth and/or program costs that continue to grow.
Other states, such as Iowa and Indiana mention slow revenue growth as a concern, but also note that
the state has built up substantial reserves. A handful of states, including Idaho, Georgia and Utah, are
optimistic about their state’s fiscal conditions. Some energy-dependent states are also seeing more
cause for optimism, with New Mexico, West Virginia and Wyoming noting that oil and gas and other
severance tax revenues are slightly stronger than expected. Overall, states continue to chart a course of
modest growth, while increasing spending pressures and slow revenue growth are causing some
concern and keeping state budgets tight.
 --AT: Spending
State spending is slowing
Farmer 12/14 Liz Farmer, Governing, December 14, 2017, “State Spending Grows at Lowest Pace
Since Great Recession”, http://www.governing.com/topics/finance/gov-nasbo-state-budgets-2018-
report.html

After several years of moderate spending growth, states are dialing it back amid federal policy
uncertainty and unpredictable revenues.

States’ general fund spending is projected to total $830.2 billion in fiscal 2018, which represents just 2.3
percent growth and the lowest spending increase since the Great Recession. Twenty-six states have
already enacted budgets with general fund spending growth below 2 percent, and 15 states are cutting
spending in fiscal 2018.
The new survey data was released Thursday by the National Association of State Budget Officers’ (NASBO).

The shift comes amid uncertainty about how federal tax reform will ultimately affect states’ revenues and taxpayer behavior in
2018. Meanwhile, two straight years of an unusually high number of states resorting to mid-year spending cuts has many
policymakers taking a more conservative approach to this year’s budget.

“There’s plenty of reasons for caution at this point,” said Michael Cohen, director of the California
Department of Finance, on a call with reporters. “And we’ve not been willing to overcommit to ongoing
spending.”

Underscoring that caution is the fact that, for the first time in five years, states have collectively
budgeted for revenue growth to outpace spending growth in fiscal 2018. Most states are forecasting
general fund growth of 4 percent. Roughly a quarter of this growth can be attributed to tax and fee
increases and other revenue measures enacted by states in the 2017 legislative session, often in the face
of budget deficits.
Those increased revenues, said NASBO Executive Director John Hicks on the same call, are a way of “catching up” budgets to
reality after many states employed one-time fixes to balance past budgets.

Many states are also continuing to strengthen their reserves, despite the recent revenue slowdown. Rainy day funds as a
percent of general fund spending is now at 5.2 percent, compared to less than 2 percent in 2011.

State by state, the financial picture varies widely.

Some states have repeatedly turned to their rainy day funds to help address shortfalls. Connecticut, for
example, is battling a weak local economy and has just over 1 percent of general fund spending in its
reserves after withdrawals in recent years.
Alaska, New Mexico and North Dakota passed their third straight budgets with spending cuts thanks to weak oil and other
energy-related revenues.

Meanwhile, 11 states, mostly in the faster-growing regions of the Southeast and West, increased general fund spending by
more 4 percent.

When it comes to where states targeted their spending, most of the focus went to K-12 education, the
largest single portion of state general fund spending. A total of 38 states increased education spending,
while 10 states made cuts, resulting in a net increase of $8.6 billion this year.
Medicaid was also a big driver of spending with states collectively spending $2.6 billion more this year
from their general funds than in fiscal 2017. (NASBO notes that figure is actually more than $5 billion
when including Medicaid spending in Ohio that is now being withdrawn from special funds.)
 --AT: UQ o/w Link
State budgets high, long-term stress persists
Kearney et al 5/1 Laila Kearney, Daniel Bases and Dan Grebler, Reuters, May 1, 2018, “U.S. States’
2019 Budgets Improve but Long-term Stress Persists”, https://www.reuters.com/article/us-usa-
municipals-budgets/u-s-states-2019-budgets-improve-but-long-term-stress-persists-idUSKBN1I24BS

NEW YORK (Reuters) - The overall picture for U.S. states’ fiscal 2019 is a hint rosier than in the last
several years, but rising volatility and fixed-costs pressures leave doubts about how long the incline will
last, a report showed on Tuesday. Revenue collections for many states have been higher than at the same time last year and tax
receipts are also beating 2018 expectations with less than two months left in the fiscal year, S&P Global Ratings said in its annual budget
analysis. A flattening of Medicaid enrollment has also led to an easing in recent state spending. Except for a handful of outliers, S&P also
expects the state sector to wrap up its fiscal 2019 budget process “in a more timely and less acrimonious fashion than it has in recent years.”
While the near-term outlook has improved, rising financial market volatility and the possibility of a trade
war also present imminent risks, the report said. Over the long term, Medicaid, pensions and other so-
called “legacy costs” will continue to eat away at budgets, S&P said. An expected downward turn from a nine-year bull
stock market will also likely weigh on state budgets, it said.
 2NC Link
New immigrants cause a fiscal drain
Hall, senior policy analyst in empirical studies at The Heritage Foundation, 16 (Jamie Bryan, “Does
Current Immigration Economically Benefit Ordinary US Citizens?”, The Heritage Foundation, 11-30-16,
https://www.heritage.org/immigration/commentary/does-current-immigration-economically-benefit-
ordinary-us-citizens, accessed on 7-14-18, JM)

Does current immigration economically benefit ordinary non-immigrants? A recent major report
indicates that most immigration does not. In September, the National Academy of Sciences (NAS) published a major report on
“The Economic and Fiscal Consequences of Immigration.” The report shows that, other than small number of scientifically educated
immigrants, immigration produces little or no overall economic gain for non-immigrants but may cause a
substantial shift in income from workers to business and capital owners. Also, immigrants overall
produce a fiscal deficit due to the very large inflow of legal and illegal immigrants with low education
levels in recent decades. So how did the researchers get to this conclusion? For starters, the report makes the perfectly obvious point
that immigration increases the gross domestic product as it increases the number of workers. However, the pertinent question is not whether
the GDP is larger but whether non-immigrant citizens are economically and financially better off because of immigration. Specifically, has
immigration increased or decreased the post-tax per capita income of the non-immigrant population? The report shows that immigration
impacts the post-tax income of non-immigrants in three ways: through an “immigration surplus,” technological change, and a fiscal impact on
government finances. According to the report, an immigration surplus potentially exists because, as immigrants enter the labor force, wages
decline and returns to capital (such as interest and profits) increase by a slightly larger amount. As the report puts it, “the more wages decline,
the larger the surplus.” At its maximum value, the theory implies that the current stock of immigrant labor, at 16.5 percent of the total labor
force, has “lowered wages by 5.2 percent,” or roughly $500 billion, for non-immigrants, while raising the incomes of owners of business and
capital by as much as $554.2 billion. The difference between the reduced wages and increased profits is “an immigration surplus of $54.2
billion, representing a 0.31 percent overall increase in income that accrues to the native population.” Thus the model shows that the main
impact of immigration is to redistribute income. In other words, since businesses can pay workers less, they make more of a profit. However, as
the report notes, the supply of capital may increase and the rate of return on capital will fall. This would mean the wage losses, capital income
increases, and immigration surplus gradually disappear, and, in the long run, the situation would return to the status quoante. The theory also
predicts that a disproportionate inflow of immigrant laborers at a particular education or skill level will reduce the wage of workers in that
group relative to others. For example, adult immigrants are almost four times as likely as non-immigrants to lack a high school diploma. This will
result in persistently lower relative wages for less skilled workers, whether immigrant or not. The report also states that immigrants with high
levels of technical and scientific education spur technological innovation which may “increase productivity of natives, very likely raising
economic growth per capita.” The number of patents produced is used as a proxy for technological change. Immigrants with a college degree
are twice as likely as U.S. born college graduates to obtain a patent. (This difference in patenting occurs because college educated immigrants
are more likely to have degrees in science and technology than are college graduates born in the U.S.) However, only 12.4 percent of recent
immigrants have a STEM (science, technology, engineering or math) degree, and only one third of those are employed in a STEM occupation.
Overall, only one percent of immigrants produce patents. Thus the overwhelming majority of the one million immigrants arriving in the U.S.
each year are irrelevant to the technological change described in the National Academy of Sciences report. Finally, the
report examines
the fiscal impact of immigration, considering eight different scenarios. In all scenarios, immigrants as a
group are in fiscal deficit; the total federal, state, and local government benefits they receive are greater
than the total taxes they pay, in both the first and second generations. The NAS report shatters any
contention that immigration, as structured in recent decades, contributes to overall government
solvency. The opposite is true. The report makes clear that immigrants without a high school diploma,
on average, generate substantial fiscal deficits, paying less in taxes than they receive in benefits in every
scenario examined. By contrast, across all scenarios, immigrants with a college degree or more create a fiscal surplus. Thus, the fiscal
impact of immigration depends on the educational balance within the immigrant population. Based on the report’s findings, both the economic
and fiscal impact of immigration can be improved in the future by reducing the number of low skill immigrants and increasing the number of
high skill immigrants.
State budgets, particularly in states like California, are dramatically hurt by
immigrants
Penn Wharton, 16 (“The Effects of Immigration on the United States’ Economy”, Penn Wharton
University of Pennsylvania Budget Model, 6-27-16,
http://budgetmodel.wharton.upenn.edu/issues/2016/1/27/the-effects-of-immigration-on-the-united-
states-economy, accessed on 7-14-18, JM)

More often than not, immigrants are less educated and their incomes are lower at all ages than those of
natives. As a result, immigrants pay less in federal, state, and local taxes and use federally-funded
entitlement programs such as Medicaid, SNAP, and other benefits at higher rates than natives. But they are
also less likely than comparably low income natives to receive public assistance. Moreover, when they do take public assistance, the average
value of benefits received is below average, implying a smaller net cost to the federal government relative to a comparable low income native.
However, immigrants often impose a heavier tax burden on natives at the state and local level. Immigrants
— particularly those with low levels of education and income — generally have larger families and more
children using public K-12 education, the largest component of state and local budgets. Furthermore, if
immigrants’ children are not already fluent English speakers, the per-student cost of education may be
substantially higher than for native-born children. These factors impose short-term costs on state budgets.
Over the long term, however, the upward economic mobility and taxpaying lifetime of second generation immigrants more than offset the
initial fiscal burden. Because the net cost to state and local governments is closely related to immigrants’ education and income, the
socioeconomic composition of the immigrant population determines the fiscal impact in each state. For
example, because New Jersey has a high proportion of well-educated and high income immigrants who
contribute more to state and local revenues than they consume in public services, the net fiscal burden
of immigration is small in New Jersey. In contrast, California’s high share of less-educated and low-
income immigrants means that immigrants’ contribution to state and local revenues is smaller relative
to their consumption of public services. As a result, the estimated fiscal burden of immigration is five
times higher for native residents of California than of New Jersey.

First Generation Immigrants adversely impact state and local fiscal policy
NASEM 16 (National Academics of Sciences, Engineering, and Medicine, The study was sponsored by
the John D. and Catherine T. MacArthur Foundation, with additional support from the National Academy
of Sciences Independent Fund, the National Academy of Engineering Independent Fund, and the
National Academy of Medicine Independent Fund. The National Academies of Sciences, Engineering,
and Medicine are private, nonprofit institutions that provide independent, objective analysis and advice
to the nation to solve complex problems and inform public policy decisions related to science,
technology, and medicine. The Academies operate under an 1863 congressional charter to the National
Academy of Sciences, signed by President Lincoln. For more information, visit http://national-
academies.org. A committee roster follows. “Immigration's Long-Term Impacts on Overall Wages and
Employment of Native-Born U.S. Workers Very Small, Although Low-Skilled Workers May Be Affected,
New Report Finds; Impacts on Economic Growth Positive, While Effects on Government Budgets Mixed”,
September 21st, 2016, NEWS,
http://www8.nationalacademies.org/onpinews/newsitem.aspx?RecordID=23550) MJG
WASHINGTON – A new report from the National Academies of Sciences, Engineering, and Medicine provides a comprehensive assessment of economic and demographic trends of U.S.
immigration over the past 20 years, its impact on the labor market and wages of native-born workers, and its fiscal impact at the national, state, and local levels. Among the report’s key

findings and conclusions: When measured over a period of 10 years or more, the impact of immigration on the
wages of native-born workers overall is very small. To the extent that negative impacts occur, they are most likely to be found for prior immigrants or
native-born workers who have not completed high school—who are often the closest substitutes for immigrant workers with low skills. There is little evidence that

immigration significantly affects the overall employment levels of native-born workers. As with wage impacts, there is
some evidence that recent immigrants reduce the employment rate of prior immigrants. In addition, recent research finds that immigration reduces the number

of hours worked by native teens (but not their employment levels). Some evidence on inflow of skilled
immigrants suggests that there may be positive wage effects for some subgroups of native-born
workers, and other benefits to the economy more broadly. Immigration has an overall positive impact on long-run economic growth in the U.S.
In terms of fiscal impacts, first-generation immigrants are more costly to governments, mainly at the state and local

levels, than are the native-born, in large part due to the costs of educating their children. However, as
adults, the children of immigrants (the second generation) are among the strongest economic and fiscal
contributors in the U.S. population, contributing more in taxes than either their parents or the rest of
the native-born population. Over the long term, the impacts of immigrants on government budgets are generally positive at the federal level but remain negative at the
state and local level — but these generalizations are subject to a number of important assumptions. Immigration’s fiscal effects vary tremendously across states. “The panel's comprehensive
examination revealed many important benefits of immigration — including on economic growth, innovation, and entrepreneurship — with little to no negative effects on the overall wages or
employment of native-born workers in the long term,” said Francine D. Blau, Frances Perkins Professor of Industrial and Labor Relations and professor of economics at Cornell University, and
chair of the panel that conducted the study and wrote the report. “Where negative wage impacts have been detected, native-born high school dropouts and prior immigrants are most likely to

negative effects especially evident at the state level when the costs of
be affected. The fiscal picture is more mixed, with

educating the children of immigrants are included, but these children of immigrants, on average, go on
to be the most positive fiscal contributors in the population. We hope our detailed analysis of the evidence will be of use to policymakers and
the public as they consider this issue.” Impacts on Employment, Wages, and the Economy The panel examined the available evidence on how immigration affects the U.S. labor market and
economy and came to the following conclusions. Effects on wages. When measured over a period of 10 years or more, the impact of immigration on the wages of native workers overall is very
small. To the extent that negative wage effects are found, prior immigrants – who are often the closest substitutes for new immigrants – are most likely to experience them, followed by
native-born high-school dropouts, who share job qualifications similar to the large share of low-skilled workers among immigrants to the United States. Effects on employment levels. There is
little evidence that immigration significantly affects the overall employment levels of native-born workers. Recent research finds that immigration reduces the number of hours worked by
native-born teens (but not their employment rate). As with wage impacts, there is some evidence that low-skilled immigrants reduce the employment rate of prior immigrants – again
suggesting a higher degree of substitutability between new and prior immigrants than between new immigrants and natives. Effects of high-skilled immigrants. Until recently, the impact of
high-skilled immigrants on native wages and employment received less attention than that of their low-skilled counterparts; but, as the number of high-skilled immigrant workers has grown,
so too has interest in studying their role in the economy. Several studies have found a positive impact of skilled immigration on the wages and employment of both college- and non-college-
educated natives. Such findings are consistent with the view that skilled immigrants are often complementary to native-born workers; that spillovers of wage-enhancing knowledge and skills
occur as a result of interactions among workers; and that skilled immigrants innovate sufficiently to raise overall productivity. The role of immigrants in consumer demand. Immigrants’
contributions to the labor force reduce the prices of some goods and services, which benefits consumers in a range of sectors, including child care, food preparation, house cleaning and repair,
and construction. Moreover, new arrivals and their descendants are a source of demand in key sectors such as housing, which benefits residential real estate markets. Impacts on economic
growth. Immigration is integral to the nation’s economic growth. The inflow of labor supply has helped the United States avoid the problems facing other economies that have stagnated as a
result of unfavorable demographics, particularly the effects of an aging workforce and reduced consumption by older residents. In addition, the infusion of human capital by high-skilled
immigrants has boosted the nation’s capacity for innovation, entrepreneurship, and technological change. Research suggests, for example, that immigrants raise patenting per capita, which
ultimately contributes to productivity growth. The prospects for long-run economic growth in the United States would be considerably dimmed without the contributions of high-skilled
immigrants. Impacts on Federal, State, and Local Budgets Beyond wage and employment considerations, policymakers and the general public are interested in the impact that immigration has
on public finances and the sustainability of government programs. All parts of the U.S. population contribute to government finances by paying taxes and add to expenditures by consuming
public services – but the levels differ. The panel conducted several analyses estimating the fiscal contributions and costs of first-generation immigrants, the second generation (native-born
individuals with at least one parent who is an immigrant), and the rest of the native-born U.S. population (referred to in the report as the third-plus generation). Over the period 1994-2013,

the net fiscal contribution (federal, state, and local combined) of first-generation immigrants was, on
average, consistently less favorable than that of native-born generations. Annual cross-sectional data reveal that, compared with
the native-born, first-generation immigrants contributed less in taxes during working ages because they were,

on average, less educated and earned less. However, this pattern reverses at around age 60, when the
native-born (except for the children of immigrants) were consistently more expensive to government on
a per-capita basis because of their greater use of social security benefits. During the same 1994-2013 time period, second-
generation adults — the children of immigrants — had, on average, a more favorable net fiscal impact for all government levels combined than either first-generation immigrants or the rest of

Reflecting their slightly higher educational achievement, as well as their higher wages
the native-born population.

and salaries, the second generation contributed more in taxes on a per capita basis during working ages
than did their parents or other native-born Americans. Results from these cross-sectional analyses are
significantly influenced by the age structures (distribution across age categories) of the different generational groups,
which in turn influence the percentage of each group in schooling, in the workforce, and in retirement. These age structures vary significantly from one historical period to another. Results are
also driven to a large extent by the assumptions underlying each analysis, especially about the allocation of government expenditures on public goods such as national defense. For example,
for scenarios in which military spending is assumed not to increase with additional immigrants, and in which a cost of zero is assigned to them for this benefit, the net fiscal impact of
individuals in the first-generation group becomes more positive than that of individuals in the two native-born groups. In addition to conducting historical analyses, the panel also modeled the
impact that adding an immigrant (with characteristics based on an average of recent immigrants) to the U.S. population would have on future public budgets, in order to estimate the future

Projected over a future time horizon of 75 years, this analysis found that the fiscal
fiscal impacts of immigration.

impacts of immigrants are generally positive at the federal level and generally negative at the state and
local level. State and local governments bear the burden of providing education benefits to children,
including those in immigrant households, but their methods of taxation recoup relatively little of the
later contributions from the resulting educated taxpayers. Federal benefits, in contrast, are largely provided to the elderly, so the relative
youthfulness of arriving immigrants, who are often working and paying taxes, means that they tend to be beneficial to federal finances. The panel’s analysis of state- and local-level data

first-
indicates that the net impact of immigration on fiscal balance sheets varies tremendously across jurisdictions. Consistent with findings in the national level analyses,

generation adults (and their dependents) tend to be more costly to state and local governments on a
per capita basis than adults (and their dependents) in the second generation or in other native-born
generations. In general, second-generation adults contribute the most of any generation to the bottom
line of state balance sheets. The analysis also reveals that an immigrant and a native-born person with similar characteristics will likely have about the same fiscal
impact. Persons with higher levels of education contribute more positively to government finances, regardless of whether they are an immigrant or are native born.

Immigration disproportionally negatively affects State governments – generic trends

doesn’t take this into account
NASEM 17 (National Academies of Sciences, Engineering, and Medicine. 2017. The Economic and
Fiscal Consequences of Immigration. Washington, DC: The National Academies Press.
https://doi.org/10.17226/23550.)

Tax inequities arise across states and regions because (1) public goods and services are provided by
governments at the federal, state, and local levels; (2) different kinds of taxes are collected at these
levels; and (3) immigrants are not uniformly distributed across jurisdictions. Equitable immigration policy making must take these
inequities into account. Among the wide range of services financed by states and local governments—ranging from public welfare and health,

to capital outlays on highways and to police and fire protection—the largest expenditure category is
investment in the population’s education. Because immigrants are not distributed uniformly across the country (and because people frequently find jobs in locations other than
where they were educated), inequalities in fiscal impacts attributable to their arrival can occur across areas. About 74 percent of all foreign-born lived in 10 states

as of 2010, and in these states they are concentrated in major metropolitan areas. Whereas state and
local governments tend to support programs for the young, the federal government’s fiscal
responsibility falls disproportionately on programs for the elderly—specifically pensions and health
care—which occur later in life. When immigrants are on average younger than the population as a
whole—as has traditionally been true (though this is changing somewhat in recent decades)—states tend to incur the more immediate costs of new
immigrants.26 Furthermore, only a portion of the fiscal benefit of immigrants—the taxes they pay—accrue to
state and local governments, with a substantial share going to the federal government. This means that, even if
the arrival of immigrants creates a neutral net fiscal impact in the long run, some subnational areas will
incur net costs, while others and the federal government may incur net benefits. Additionally, some states may be net exporters to
other states of college-educated graduates transitioning into the workforce. Ideally, life-cycle fiscal impact models would quantify the benefits over the long term that accrue to states that have made strong investments in public

education, taking into account subsequent interstate migration of those who have been educated. The state analyses of New Jersey and California reported
on in The New Americans, which were based on Garvey and Espenshade (1998) and Clune (1998),
respectively, confirmed the intuition that an inflow of foreign-born individuals affects state finances
disproportionately. For New Jersey, in the fiscal year 1989-1990, the net fiscal cost to state and local budgets associated with
immigrant-headed households was estimated to be $232 (adjusted to 1996 USD) per native household. In
the case of California, the state and local fiscal burden imposed on native residents by immigrant-headed households was estimated to be $1,178 per native household for fiscal year 1994-1995
(again adjusted to 1996 USD). For both studies, all publicly provided goods other than national defense were assigned equally (pro rata) across the full population, foreign-born and native-born. In contrast, the addition of

). Lee and Miller (2000), updating

immigrants in these states was estimated to have generated net fiscal contributions to the federal budget (National Research Council, 1997, pp. 292-293

results from the analysis in The New Americans, confirmed that the fiscal impact of immigration at the
federal level is largely positive and typically negative at the state and local levels. However, fiscal outcomes are sensitive to both the
amount of immigration and the kinds of immigration that occur, as well as the prevailing tax rates and rules on benefits. Local results vary widely depending on whether or not a locality receives large numbers of immigrants. Areas
that do not attract immigrants may still benefit from the federal tax advantages that are created without having to shoulder the marginal local costs generated by incoming populations. Additionally, spending patterns (e.g., on
schools or other benefits) and taxes (e.g., property taxes) may in turn influence the level and composition of immigration attracted to an area. While education expenditures and income tax revenues create much of the
redistribution from state to federal jurisdictions, there are other factors. One example is the cost of public safety, law enforcement, and corrections; the federal government reimburses state and local entities a fraction of costs to
incarcerate criminal aliens, the remaining costs are borne by local governments. Though a growing population will typically add to the total cost of policing and enforcement, evidence cited above suggests that the marginal cost

added by an immigrant may be less than the average cost for the population, as the new arrivals generally exhibit lower crime rates than do natives. Another cost of immigration is
created by the use of welfare programs (see Chapter 3 for a detailed profile). Programs, such as Social Security and Medicare, Medicaid, and Temporary Assistance for Needy Families,
create expenditures affecting the fiscal picture at the federal level. However, because the foreign-born are disproportionately of working age

and contributing through payroll taxes, increases in immigration have improved Social Security’s
finances (Social Security Administration, 2015). Immigrant households’ use of food assistance programs and Medicaid is much higher than that of native-headed households—not as a result of not working (in 2009, 95%
of immigrant households with children had at least one person working) but because of lower levels of education and income. Use of cash and housing programs for the two groups is similar. The extent of the impact differential for
welfare programs between foreign- and native-born varies by state, by localities within state, and by specific program (see Table 3-15, Chapter 3, on welfare use for immigrant and native households with children). Likewise, the

Additionally, Branche
burden of immigration on law enforcement is not evenly distributed across states because a handful of states incarcerate the majority of noncitizens who commit crimes.

(2011) explored the costs that cities incur under various programs of immigration enforcement and
found that federal contributions did not suffice to compensate for the loss at the state level.
 2NC Link-Low Skilled

Yes link—low-ed immigrants cause short-term strain on state budgets—that’s

DISTINCT from federal programs, high-skilled, or long-term net-effects
CRS 11
Congressional Research Service, Fiscal Impacts of the Foreign-Born Population, October 19, 2011
R42053, https://www.everycrsreport.com/reports/R42053.html

This report reviews estimates of fiscal impacts to the federal, state, and local governments of the foreign
born who reside in the United States. It examines the academic and policy literature on fiscal impacts of
two populations: all U.S. foreign born and unauthorized aliens. Computing such fiscal impacts involves
numerous methodological and conceptual challenges, and resulting estimates vary considerably
according to the assumptions used, including those about the time frame considered, the treatment of
U.S.-born children, the unit of analysis used, and which costs and revenues are included. For the total
foreign-born population, the findings of a 1996 analysis commissioned by the National Research Council
entitled The New Americans remain authoritative and relevant. The report estimated that each new
immigrant at that time, with his or her descendents, would generate an average net fiscal surplus. The
authors illustrated how their estimate varied according to foreign-born residents’ age composition and
educational attainment. Varied assumptions about education generated substantially different
impacts. For instance, immigrants with above-average education generated a considerably larger than
average net fiscal surplus; those with below-average education levels generated a net fiscal deficit.
Reducing the time frame of the analysis to fewer generations changes the average net fiscal surplus into
an average net fiscal deficit. This study and others confirm that the foreign born, like the native born,
impose their largest costs on U.S. taxpayers as children, through their consumption of public education,
and as the elderly, through their consumption of government-funded public health programs. Yet, the
majority of the foreign born come to the United States as young adults, where they pay taxes and
contribute to programs like Social Security for most of their working lives. Relatively young ages at
arrival for most foreign born help explain why many fiscal impact studies found that foreign-born
residents generated net fiscal surpluses over the long term. Findings from all of the studies reviewed in
this report indicate different impacts at the state and federal levels. Many federal programs, such as
Social Security and Medicaid, are oriented toward assisting the elderly, while many state and local level
jurisdictions are responsible for services consumed by younger persons, such as public education and
criminal justice administration. Foreign-born residents’ relatively young age distribution thus
accentuates the degree to which states and localities incur greater fiscal costs from the foreign born
than the federal government.

Throw out ev about *all* or *high-skilled* immigrants—the link is low-skilled,

distinction with a difference
Camarota, 16 (Stephen is the Director of Research at the Center for Immigration Studies
– So What is the Fiscal and Economic Impact of Immigration? September 2016, National
Review - https://www.nationalreview.com/2016/09/united-states-immigration-policy-
economic-fiscal-impact-education-native-born/)
Although the NAS do not say so specifically, prior research is pretty clear: The fiscal drain is caused by
two groups: Legal immigrants who have no education beyond high school and, to a lesser extent, illegal
immigrants, most of whom have no education beyond high school. These less-educated immigrants
have modest incomes and make modest tax payments, while they (or more often their U.S.-born
children) make heavy use of welfare programs. Skilled immigrants have high incomes and are not a
fiscal drag.
 2NC Link-Children/Young
Yes link—young people cause short-term strain on state budgets—that’s DISTINCT
from federal programs, high-skill, or long-term net-effects
CRS 11
Congressional Research Service, Fiscal Impacts of the Foreign-Born Population, October 19, 2011
R42053, https://www.everycrsreport.com/reports/R42053.html

This report reviews estimates of fiscal impacts to the federal, state, and local governments of the foreign
born who reside in the United States. It examines the academic and policy literature on fiscal impacts of
two populations: all U.S. foreign born and unauthorized aliens. Computing such fiscal impacts involves
numerous methodological and conceptual challenges, and resulting estimates vary considerably
according to the assumptions used, including those about the time frame considered, the treatment of
U.S.-born children, the unit of analysis used, and which costs and revenues are included. For the total
foreign-born population, the findings of a 1996 analysis commissioned by the National Research Council
entitled The New Americans remain authoritative and relevant. The report estimated that each new
immigrant at that time, with his or her descendents, would generate an average net fiscal surplus. The
authors illustrated how their estimate varied according to foreign-born residents’ age composition
and educational attainment. Varied assumptions about education generated substantially different
impacts. For instance, immigrants with above-average education generated a considerably larger than
average net fiscal surplus; those with below-average education levels generated a net fiscal deficit.
Reducing the time frame of the analysis to fewer generations changes the average net fiscal surplus into
an average net fiscal deficit. This study and others confirm that the foreign born, like the native born,
impose their largest costs on U.S. taxpayers as children, through their consumption of public
education, and as the elderly, through their consumption of government-funded public health
programs. Yet, the majority of the foreign born come to the United States as young adults, where they
pay taxes and contribute to programs like Social Security for most of their working lives. Relatively
young ages at arrival for most foreign born help explain why many fiscal impact studies found that
foreign-born residents generated net fiscal surpluses over the long term. Findings from all of the studies
reviewed in this report indicate different impacts at the state and federal levels. Many federal
programs, such as Social Security and Medicaid, are oriented toward assisting the elderly, while many
state and local level jurisdictions are responsible for services consumed by younger persons, such as
public education and criminal justice administration. Foreign-born residents’ relatively young age
distribution thus accentuates the degree to which states and localities incur greater fiscal costs from
the foreign born than the federal government.
 2NC Link-End Deportation
Fiscal Drain of immigrants is large—6 times the cost of deporting
Bedard, 17 (Paul is the Washington Secrets reporter for the Washington Examiner –
Report: ‘Fiscal Drain’ of illegal immigrants is 6 times cost of deportation, August 2017,
Washington Examiner - https://www.washingtonexaminer.com/report-fiscal-drain-of-
illegal-immigrants-is-6-times-cost-of-deportation)
The "fiscal drain" of illegal immigrants on American taxpayers is about 6 times the price of deporting them,
according to a new study that bolsters the Trump administration's bid to remove criminal illegals and cut overall immigration costs.

The Center for Immigration Studies on Thursday said in a new report that deportation costs an average of $10,854. According to Immigration
and Customs Enforcement, that includes apprehension, detention, and processing.

Letting illegal immigrants stay in the U.S., results in a bill to taxpayers of $65,292 "for each illegal
immigrant, excluding their descendants," according to Steven A. Camarota, director of research at the Center
for Immigration Studies. That includes government benefits.

Camarota, citing two key fiscal impact studies, said

that reason the cost of illegal immigration is high is because many
are poorly educated and require more in government benefits than others.

"In short,
illegal immigrants are a large net fiscal drain because of their education levels and this fact drives
the results. Deportation, on the other hand, is not that costly relative to the fiscal costs illegal immigrants create," he wrote.
His key findings:

Deportation costs

In April of this year, ICE reported that the average cost of a deportation, also referred to as a removal, was $10,854 in FY 2016,
including apprehension, detention, and processing.

Partly due to policies adopted in the second term of the Obama administration, ICE removed nearly 170,000 fewer aliens in 2016 than in 2012,
even though it actually spent 8 percent more in 2016 in inflation-adjusted dollars. The removal of so many more illegal immigrants in FY 2012
means that the average cost per removal in that year was $5,915, adjusted for inflation.

If the average cost of a deportation was what it had been in FY 2012, then the larger enforcement budget in FY 2016 would have allowed for
200,000 more removals without spending additional money.

Costs of illegal immigrants

Researchers agree that illegal immigrants overwhelmingly have modest levels of education — most have not completed high school or have
only a high school education. There is also agreement that immigrants with this level of education are a significant net fiscal drain, creating
more in costs for government than they pay in taxes.

The National Academies of Sciences, Engineering, and Medicine estimated the lifetime fiscal impact (taxes
paid minus services used) of immigrants based on their educational attainment. Averaging those estimates and applying them to the education level of illegal

immigrants shows a net fiscal drain of $65,292 per illegal — excluding any costs for their children.

Based on this estimate, there is a total lifetime fiscal drain of $746.3 billion. This assumes 11.43 million illegal immigrants
are in the country based on the U.S. government's most recent estimate.

The fiscal
cost created by illegal immigrants of $746.3 billion compares to total a cost of deportation of
$124.1 billion, assuming a FY 2016 cost per deportation, or $67.6 billion using FY 2012 deportation costs.
 AT: Heritage Study Flawed
Study is super great and methodologically sound
Camarota 13
Steven Camarota, Director of Research at the Center for Immigration Studies, most frequent non-
government expert to testify before Congress, lead researcher on immigrant data with the Census
Bureau, Internally citing several recent studies including a comprehensive one by the Heritage
Foundation, The Fiscal Impact of Immigration, 2013, https://www.nationalreview.com/2013/05/fiscal-
impact-immigration-steven-camarota/

Some also argue that Rector’s methodology is non-standard because it looks at taxes paid and services
used by households rather than individuals. In fact, this is the standard way to look at the issue. The
National Research Council (NRC) used households in some of the fiscal analyses it did of immigrants, as
did the Urban Institute in its tax studies in 1995 and 2006. Princeton economist Thomas Espenshade also
used households in his fiscal analysis of New Jersey’s immigrants. The late Julian Simon, who was at Cato
and shaped the institute’s views of immigration, used this approach as well, with data from the 1970s.
But now that the numbers do not come out positive, Cato does not like Simon’s method. The way
Heritage looked at the fiscal impact of immigrants is the main way most researchers have done this
kind of work. The primary concern about looking at households is that this approach includes U.S.-born
children, who critics argue should not be counted. But Simon himself pointed out that the fiscal impact
must include both the immigrant and the family “he brings or acquires.” After all, the children are here
only because their parents have been allowed into the country. It is also worth noting that the NRC
study in 1997 did an analysis that excluded U.S.-born children, and it still found that less educated
immigrants were a large fiscal drain. Others argue that because the Schumer-Rubio bill limits welfare
access for the first ten years after legalization, there is nothing to worry about. But the Heritage study
shows that illegal-immigrant households already receive about $4,500 a year on average from means-
tested programs. The U.S.-born children of illegal immigrants have access to all programs, the ban does
not apply to every program, and the administration of these programs is far from airtight. Finally, as the
Heritage study makes clear, when the ten-year window expires, the costs explode. #page#Another
criticism of the Heritage study is that it does not take into account that the legalized illegal immigrants
will do better over time. This is simply false; the Heritage study does assume that incomes will rise
both with legalization and over time. But this does not mean that illegal immigrants will come even
close to providing a net fiscal benefit to the nation. As the accompanying graph makes clear, even less
educated immigrants who have lived in the United States for 20 years have very high welfare use and
very low tax liability. Heritage’s findings simply reflect this fact.
 *AT: Immigration Boosts Econ
Not an answer to the DA

And, zero evidence for this, and econ benefits are tiny—increasing SIZE of GDP is
irrelevant
Camarota 13
Steven Camarota, Director of Research at the Center for Immigration Studies, most frequent non-
government expert to testify before Congress, lead researcher on immigrant data with the Census
Bureau, Internally citing several recent studies including a comprehensive one by the Heritage
Foundation, The Fiscal Impact of Immigration, 2013, https://www.nationalreview.com/2013/05/fiscal-
impact-immigration-steven-camarota/

Probably the main argument of critics is that the economic benefits we gain from having access to
immigrant labor will offset the fiscal costs. There is simply no evidence for this. The National Research
Council study mentioned above, which was authored by many of the leading economists in the field, is
the only study of which I am aware that tried to measure both the economic impact and the fiscal
impact of all immigrants. That study found that the economic gain to the native-born from all
immigrants was smaller than the fiscal drain created by all immigrant households. And that finding was
for all immigrants, not only illegal immigrants, who have on average just ten years of schooling. #ad#In a
recent paper for my organization, the nation’s top immigration economist, Harvard’s George Borjas,
summarizes the economic literature and observes, “Immigration is primarily a redistributive policy.” As
Borjas explains, the immigrants themselves may benefit a great deal by coming to America, but the gain
to natives from illegal immigration is estimated at 0.06 percent of GDP: six one-hundredths of 1 percent.
To assume that immigration creates large gains to natives, one must invent benefits that are not
demonstrated in the academic literature. The worst example of ignoring the immigration literature is a
widely cited op-ed piece by former McCain adviser Douglas Holtz-Eakin. I published a long critique of his
article here. The central point of Holtz-Eakin’s “dynamic analysis” is the contention that immigration-
induced population growth, by itself, will have a positive impact on the economy and public coffers. But
to reach his conclusion, Holtz-Eakin ignores the economic literature showing that immigration only
slightly increases the income of natives. He also ignores the literature on development indicating that
population growth does not increase per capita GDP growth. Worst of all, he ignores the research that
has examined the actual impact of immigration on public coffers, which shows that education at arrival
is the key determinant of immigrants’ fiscal impact. To offset the enormous fiscal costs that the less
educated create, illegal immigration would have to dramatically increase the income of natives. There is
simply no objective research showing this is the case. Of course, immigration does make the economy
larger. But, as Borjas points out, of the increase in the size of economy that immigration creates, “97.8
percent goes to the immigrants themselves in the form of wages and benefits.” It is true that immigrants
came to America 100 years ago and did not create a large fiscal drain. But government was a tiny
fraction of what it is today, so the arrival of low-income immigrants could not create a large fiscal drain.
Heritage’s study, as well as common sense, makes clear that advocates of smaller government have to
oppose amnesty and support very selective immigration policies until the day that government spending
is cut dramatically. Otherwise the fiscal cost will be enormous.
 AT: Good for Budgets
Doesn’t become positive until TWENTY YEARS out
Rowthorn, 08 (Robert is an Emeritus Professor of Economics at the University of
Cambridge - Fiscal Impact of Immigration on the Advanced Economies; International
Evidence, The USA, October 2008, OUP Academic -
https://academic.oup.com/oxrep/article/24/3/560/365230#5298670)
The fiscal contribution of immigrants has been most extensively studied in the United States. Borjas
(1994), Huddle (1993), and Passel (1994) use a static accounting framework to compute the government
surplus from all immigrants residing in the USA in 1993. They find this annual surplus to be −$16 billion,
−$40 billion, and $27 billion, respectively.7 These are equivalent to −0.2 per cent, −0.6 per cent, and
+0.4 per cent of GDP, respectively.

Using a similar framework, Lee and Miller (1998) estimate the net fiscal contribution of all existing
immigrants and their concurrent descendants in the USA in 1994. This group constituted 15.5 per cent
of the national population, and between them they provided a fiscal surplus equal to $23.5 billion, or
0.35 per cent of GDP. This estimate is based on the favourable assumption that none of the cost of debt
interest and ‘public goods’ is allocated to the immigrant community. Public goods are defined as
national defence, expenditures on veterans, and research on health, science, space, and technology. If
this assumption is substantially modified, the immigrant contribution becomes negative.

In a later paper Lee and Miller (2000) estimate the effect of raising net immigration into the United
States by 100,000 per year while maintaining the age and skill composition of the current stream. Taking
federal, state, and local taxes and expenditure into account, the overall fiscal impact is initially negative
but gradually becomes positive after about 20 years as the children of immigrants enter the labour
market. However, the beneficial effect is never more than 0.4 per cent of total tax revenue. The
authors conclude that ‘the overall fiscal consequences of altering the volume of immigration would be
quite small and should not be a consideration for policy’ (Lee and Miller, 2000, p. 353).

Auerbach and Oreopoulos (2000) use a dynamic model to estimate the fiscal impact of halting all further
immigration into the United States. The answer depends on a number of factors, of which the most
important are the treatment of defence expenditure and the allocation of the fiscal burden across
generations. On one set of assumptions, the ending of immigration would produce a bonus equivalent
to an immediate proportionate reduction in all taxes of 3.8 per cent and a similar increase in all
transfers.8 On another set of assumptions, the ending of immigration would mean an additional
burden in the form of a 1.9 per cent increase in the taxes paid by future generations and a similar
reduction in transfers. These amounts are equivalent to a gain equal to +1.5 per cent and −0.8 per cent
of GDP respectively.
 2NC Tradeoffs I/L
Budget caps force a trade-off.
Frederick J. ZIMMERMAN ET AL. 17. Professor, Department of Health Policy and Management,
UCLA. “Public health and the economy could be served by reallocating medical expenditures to social
programs.” SSM – Population Health 3(December): 185-91. Emory Libraries.
As much as 30% of US health care spending in the United States does not improve individual or population health. To a large extent this excess spending results from prices that are too high

In the public sector, and particularly at the state level, where budget constraints are severe
and from administrative waste.

and reluctance to raise taxes high, this spending crowds out social, educational, and public-health
investments. Over time, as spending on medical care increases, spending on improvements to the social
determinants of health are starved. In California the fraction of General Fund expenditures spent on
public health and social programs fell from 34.8% in fiscal year 1990 to 21.4% in fiscal year 2014, while health care increased
from 14.1% to 21.3%. In spending more on healthcare and less on other efforts to improve health and health determinants, the state is missing
important opportunities for health-promoting interventions with a strong financial return. Reallocating ineffective medical expenditures to
proven and cost-effective public health and social programs would not be easy, but recognizing its potential for improving the public's health
while saving taxpayers billions of dollars might provide political cover to those willing to engage in genuine reform. National estimates of the percent of medical spending
that does not improve health suggest that approximately $ 5 billion of California's public budget for medical spending has no
positive effect on health. Up to 10,500 premature deaths could be prevented annually by reallocating this portion of medical spending to public health. Alternatively, the
same expenditure could help an additional 418,000 high school students to graduate.¶ 1. Introduction¶ The United
States spent $3.2 trillion or $9990 per person on healthcare in 2015 (Centers for Medicare and Medicaid Services, 2015b) and ranks first in the world for per-capita healthcare spending, which
is more than double the average within the Organization for Economic Cooperation and Development (OECD) (Organisation for Economic Co-operation and Development, 2015).¶ Despite this
elevated level of healthcare spending, Americans have both shorter life expectancy and poorer health than residents in most other OECD countries (Avendano & Kawachi, 2014; Bezruchka,
2012; National Research Council and Institute of Medicine, 2013). This US health disadvantage has been attributed to a number of cross-country differences, but differences in prices and
administrative inefficiencies are major drivers of the excess costs in the US system that are also under policy control. A recent report in The New York Times (Rosenthal, Lu, & Cram, 2013) took
note of sharply discordant prices for standard healthcare services in the US compared to other countries. An MRI scan whose cost averages $319 in the Netherlands costs three times that
amount in the US; a hip replacement that averages $8000 in Spain costs quintuple that amount in the US; and a dose of Lipitor that averages $6 in New Zealand costs 12 times as much in the
US. These examples may be extreme, but they are hardly unique or marginal. The US pays a much higher cost per service delivered than any other developed country (Squires, 2012). In a New
England Journal of Medicine commentary, two well-known health economists have pointed out that simply standardizing insurance products could reduce administrative hassles, resulting in
savings of $200 billion annually (Fuchs & Milstein, 2011). A report from the Institute of Medicine (Young & Olsen, 2010) estimated $425 billion a year in excessive costs-per-service delivered,
including $130 billion in inefficiently delivered services, $190 billion in excessive administrative costs, and $105 billion in prices that are too high (2009 dollars).¶ Urgent and well-argued calls
have been issues for the public health community to engage in a more informed debate about how best to allocate resources to achieve health for all (McDonough, 2016). Important
observations are that a much higher fraction of public spending is on healthcare in the US than in peer countries, that a much smaller fraction is on public health and social spending, and that
the US lies beyond what economists call “the flat of the curve,” the area at which additional spending on healthcare has little value, and may actually be harmful. Why do these problems
persist when they seem so clearly harmful?¶ There is, in American medicine, a misleading narrative about hard tradeoffs: that reducing spending requires depriving people of coverage, that
expanding coverage to new populations requires reducing the benefits of those with existing coverage; that enhancing the benefits will bankrupt the system; and that reducing prices will cost
lives. In fact, none of these suggested tradeoffs is confirmed by empirical evidence. The purpose of the analysis here is not to make any firm claims about the impact of reallocating
expenditures, but rather to show where the real tradeoffs lie.¶ There is at least an implicit, and possibly quite real, tradeoff between US public spending for medical care versus other social
services—for which US spending is a much smaller portion of GDP than in other OECD nations (Avendano and Kawachi, 2014; Stuckler, Basu, & McKee, 2010). This difference raises the
question of whether foregone investment in non-medical social services contributes to poorer health outcomes.¶ Cross-national studies have observed positive associations between non-
medical social spending and population health: on average, countries with greater levels of social spending have longer average life expectancies, lower infant mortality rates, and fewer
potential years of life lost (Bradley et al., 2016; Bradley, Elkins, Herrin, & Elbel, 2011; Kangas, 2010). An analysis of 15 European Union countries estimated that a $100 increase in non-medical
social-welfare spending was significantly associated with a 0.99% drop in all-cause mortality and a 2.8% decrease in alcohol-related mortality (Stuckler et al., 2010). Within the United States,
states with higher per capita non-medical social welfare and education spending had lower rates of suicides and teenage births (Zimmerman, 1987). And states with higher non-health social-
to-healthcare spending ratios had significantly better state-level health outcomes for asthma, lung cancer mortality, and limitation in daily activities (Bradley et al., 2015).¶ Moreover,
interventions in public health, education, early childhood development, housing, and transportation have been shown to generate financial returns. For example, these program types
generate increased tax revenue from higher earnings and reduced expenditures in law enforcement—that outweigh the cost of the programs (Carlson, Haveman, Kaplan, & Wolfe, 2011;
Gallivan, Ang-Olson, Liban, & Kusumoto, 2011; Reynolds, Magnuson, & Ou, 2010; Tsemberis, 2010).¶ But while current evidence indicates that non-medical social spending improves
population health at the margin, the same cannot be said for healthcare spending. Several studies have shown that higher per capita spending does not translate to better quality of care or
health outcomes (Fisher et al., 2003a,b; Rothberg, Cohen, Lindenauer, Maselli, & Aaurbach, 2010), and faster medical spending growth in the US (1970–2002) than in other OECD countries has
not resulted in more rapid improvements in health or longevity (White, 2007). Indeed, Institute of Medicine roundtable panelists have estimated that between 20% and 30% of health care
spending could be saved without compromising health care quality and health outcomes (Institute of Medicine Roundtable on Evidence-Based Medicine, 2010; Wennberg, Fisher, & Skinner,
2002), a staggering $750-$765 billion in excess health care in 2009, approximately $830-$846 billion in 2015 dollars (Institute of Medicine Roundtable on Evidence-Based Medicine, 2010).¶

Uncontrolled increases in healthcare spending reduce federal and state budgets for spending on other social programs. For example, rising Medicaid costs have been
linked to decreases in higher-education appropriations across states (Fossett & Burke, 2004; Kane & Orszag, 2003), and some US
senators have expressed concerns that healthcare expenditures crowded out their states’ abilities to spend on other

priorities (The White House, 2009). Furthermore, mid-year state budget adjustments show that states expand health care
budgets, often at the expense of other social programs. Of the 16 states that increased their budgets at
mid-year in fiscal year (FY) 2015, ten states (63%) increased their Medicaid budget, of which five reduced
budget allocations in education, public assistance, or transportation (National Association of State Budget Officers, 2015).¶ This study
uses recent experience in California to examine whether rising medical expenditures are plausibly crowding out other social spending, and if so, what the social opportunity cost of that crowd-

out might be.¶ This analysis uses 25 years of fiscal data from the state of California to assess the crowding-out
of non-medical social spending by rapidly increasing health care costs. California was chosen because state Proposition 13 and several
state laws make raising taxes difficult, thereby creating a firm budget cap. Moreover, California leans heavily Democratic and has become more so over the study period, suggesting that any

In California the vast

reduction in non-medical social spending observed during the 25 years studied cannot be attributed to ideological preferences against such spending.¶

majority of K-12 education resources comes from the state, not local districts, and funding for K-12
education is determined by formulas passed by Propositions 98 (1988) and 111 (1990). An approximate result of this very complex
statute is that 40% of the general fund must be spent on K-12 education and community colleges. As a result, one would

Fund expenditures would remain relatively constant throughout the study period.¶ As medical
expect that K-12 education spending as a percentage of annual General-

spending increases nationally, including in California, the state's effective budget cap implies that less
must be spent on the other functions of government, particular on those public health and social
expenditures outside of K-12 education.

That defunds the university system.

Daniel POTTER ET AL. 17. Reporters. “Governor Says ‘Big Cuts’ Ahead For California’s Budget.”
Capital Public Radio. May 11. http://www.capradio.org/articles/2017/05/11/live-blog-brown-to-release-
updated-spending-plan/.

Update 11 p.m.: The

latest budget proposal from California Governor Jerry Brown does not account for possible
changes to federal health care funding.¶ Brown says that’s because it’s impossible to tell whether a replacement
by Republicans in Washington will become law and—if it does—how it will differ from the bill that passed Congress.¶ The
measure would roll back an expansion of Medi-Cal. Brown says the state would either have to drop
coverage for millions or pay an amount roughly equal to the entire cost of the University of California
system.¶ "That kind of money would defund the university if you did it all from one source, so the only answer
is to fight," he says. "We gotta stop it."¶ A chart behind Brown at his budget announcement calculated the state would lose more than $5 billion
of federal funds in 2019 and almost $25 billion within a decade.

Balanced-budget requirements force education trade-off.

Simon HAEDER 8/16. Assistant Professor in the Department of Political Science in the John D.
Rockefeller IV School of Policy & Politics at West Virginia. “Why state-level single-payer health care
efforts are doomed.” 2017. http://wtop.com/business-finance/2017/08/why-state-level-single-payer-
health-care-efforts-are-doomed/.

To the dismay of progressives, future efforts are likely equally doomed to failure. While
states have been innovators with
regards to many policies, fiscal issues and regulatory limitations will most likely preclude states from
pursuing sweeping health reform. Here is why.

Providing insurance to those who cannot afford it is a costly endeavor, particularly in the United States. Without the
financial support from the ACA, which currently provides subsidies in the individual marketplaces and pays for well over 90
percent of the Medicaid expansions, states would be required to allocate funds for this purpose. This
would be undeniably challenging.

For one, many states

are still recovering from the Great Recession. Moreover, other important state functions
like K-12 and higher education and criminal justice are taking up large parts of states’ budgets.

Perhaps most crucially, unlike the federal government, states are generally not allowed to carry a deficit so budgets
need to be balanced in any given year.

This leaves tax increases as the only solution for states seeking to get more of their residents insured. From an institutional perspective,
increasing taxes is a significant obstacle because in most cases this would require a supermajority of the
legislature, as well as a willing governor to accomplish. With Republicans by and large unwilling to go this route, this seems
exceedingly unlikely in the foreseeable future.

Yet even for those states finding a path to increasing taxes, significant obstacles remain. Unlike for health
reform at the federal level, residents and businesses have a degree of mobility that allows them to
select their location of residency. So increasing state taxes to fund health care expansion could prompt
businesses and individuals to locate to other states with lower taxes.
It would likely also mean that poorer and sicker individuals seeking access to health coverage, particularly from neighboring states, would
relocate to these states.

Over time, health reform would thus be financially unsustainable.

 AT: No Tradeoffs
Trades-offs likely – education will be targeted
Randall and Ruben, Randall is a research associate in the Urban - Brookings Tax Policy Center at the
Urban Institute and Ruben is a senior fellow in the Urban - Brookings Tax Policy Center at the Urban
Institute, 17 (Megan and Kim, “Sustainable Budgeting in the States”, The Urban Institute, November
2017, https://www.urban.org/sites/default/files/publication/93461/sustainable-budgeting-in-the-
states_2.pdf, accessed on 7-14-18, JM)

Charting what states spend money on and how they pay for services is critical to understanding what is
at stake during the public budgeting process. The trade - offs lawmakers face during the budget process
have material consequences for the quality of state services, such as Medicaid and education; the
condition of public infrastructure, such as highways and roads; and the sustainability of other public investments that
affect quality of life and well - being for residents. Lawmakers often debate the merits of funding different services and the appropriate role of
government, while budget institutions affect the parameters within which lawmakers work to allocate funds to their respective priorities.

Increased state budget cuts will directly harm higher education

Wyllie, writer for the Journal of Higher Education, 18 (Julian, “Why Are States Spending Less on Higher-
Ed? Medicaid and Lazy Rivers Could Be to Blame”, The Journal of Higher Education, 5-1-18,
https://www.chronicle.com/article/Why-Are-States-Spending-Less/243281, accessed on 7-14-18, JM)

“One of the reasons for why higher ed is often cut, anecdotally, is because when a legislator decides
where to allocate money, they say, We see people hurting right now,” Webber said. “So it makes sense
to them to allocate more money to things that affect right now.” People outside the university world
don’t always distinguish differences between state funding and donor dollars for college construction
and other major projects, Webber said. Extravagant spending of any kind may create a harder argument
for higher-ed administrators to sell. “Most colleges are not opening up a $200-million facility. That’s
unrepresentative of the entirety of higher ed. But those types of big spending items don’t do higher
education any favors,” he said. “It makes it easier for legislators to argue that other spending may do
more good.” Given decreased political will in some states to raise revenue through taxes to offset the
declines, higher-ed proponents should prepare for this cycle to continue, Webber said. But there’s still
time for higher-ed officials to argue for why they need more funding, not less.
 AT: No Spending Cap
Balanced budget restrictions
Curry 16 Sarah Curry, American Legislative Exchange Council, January 11, 2016, “State Budget
Solutions”, https://www.alec.org/article/state-budget-solutions-state-budget-gimmicks-of-2015/
Every year budgets are debated and voted upon somewhere across our nation. The timing of state budgets generally occurs during the summer months, since
almost all states have a fiscal year that begins on July 1st. This
is the single most important job for a state government to
accomplish each year: prioritizing public priorities by allocating precious tax dollars amongst competing
claims by lawmakers, special interests and citizens. To complicate the issue, almost every state has
some provision requiring the passage of a balanced budget, meaning the state cannot spend more than
it collects in revenue. This restriction, and the generally complicated nature of budgeting for a state, has tempted some lawmakers into using gimmicks
to fill accounting holes and mollify certain constituencies.

Budget balancing forces states to cut spending

Randall 12/7 Megan Randall, Urban Institute, December 7, 2017, “How States Balance their Budgets
Matters More than if They Do”, https://www.urban.org/urban-wire/how-states-balance-their-budgets-
matters-more-if-they-do

Balanced budgets are a popular political talking point among state governors.

On the campaign trail, they often brag about single-handedly balancing their states’ budgets. And at
home, they praise their states' fiscal discipline while criticizing federal spending habits.

But this display of fiscal restraint is not entirely voluntary, nor is it always beneficial.

Forty-six states and the District of Columbia have balanced budget requirements (BBRs). In principle,
these fiscal measures prohibit states from spending more than they collect in revenue, but the reality is
often more complicated.

These requirements make a splash each year as states go through their budget cycles. Pennsylvania
balanced its revenues and spending after a four-month budget impasse this year. The state even earned
a credit downgrade. And Maine went into government shutdown for four days before finally adopting a
balanced budget in July.

Balanced budget requirements have become a pillar of state budgeting practice. But do they work? And
how do we determine whether they’re effective? Here’s what the evidence says.

Stricter balanced budget requirements produce “tighter” fiscal outcomes, but they can cause more
fiscal and economic volatility

Strict BBRs are constitutional and prohibit states from carrying a deficit into the next fiscal year. They
require the legislature to pass and the governor to sign a balanced budget, rather than merely propose
one.

Research shows that strict BBRs reduce spending, lower deficits, and hasten responses to revenue
shocks. Other studies have found less debt, lower borrowing costs, and higher surpluses.

Although proponents of fiscal restraint applaud tighter fiscal outcomes, there are trade-offs.
Research suggests that strict BBRs can increase state economic and fiscal volatility, making large swings
in state revenue or the economy even larger. This can compromise financial planning and continuity of
services.

Balanced budget requirements can also force states to raise taxes or slash spending in an already
retracting economy. During deep or lengthy economic downturns, states are more likely to cut
spending than increase taxes. Strict BBRs can force swift and deep cuts to services like school aid and
optional Medicaid programs.

The requirements can cause states to impose harsh cuts when a state is already hurting, which can
prolong a downturn or delay a recovery.
States should learn from past mistakes and refine budget practices to ensure fiscal health

States must balance their budgets during good times and bad. But do states always make a good-faith effort to do so?

Balanced budget requirements typically only apply to operating budgets. Some states have delayed pension fund payments to
cover other expenses. New Jersey cut such a deal in 2014, as did Connecticut in 2010.

Other states have pushed a payroll or state aid payment from the last month of the current fiscal year into the first month of
the next year, allowing them to legally meet the BBR while leaving the true balance of resources and obligations in the red.
Hawaii performed such a move in 1998, as did California in 2009.

Some of this slack can give states flexibility to respond to unexpected revenue declines. One-time accounting fixes may be more
desirable than cutting critical services during a recession.

But these moves can become a problem when states use them during good times and bad. Actions that might help states
respond to an unexpected drop in revenues can jeopardize states’ fiscal health if they are used regularly. And, as evidenced
most recently in Pennsylvania and Illinois, research suggests bond markets tend to penalize states when they fail to meet BBRs.

So, what should states do?

Research shows that strict BBRs are most effective when paired with a generous rainy day fund. States
can reap the benefits of a strict BBR by placing higher surpluses into a savings account. One 2006 study
found that the larger a state’s rainy day fund, the smaller its budget gap during recession years because
states use stabilization funds to plug budget holes during recessions.

States should assess the costs—and benefits—of a strict balanced budget rule, and policymakers should
consider how to combine and refine budget practices to ensure long-term fiscal health.

States must balance budgets- use spending cuts and tax increases
Cashin et al 2017 David Cashin, Jamie Lenney, Byron Lutz, and William Peterman, April 14, 2017,
“Fiscal Policy and Aggregate Demand in the U.S. Before, During and Following the Great Recession,”
Finance and Economics Discussion Series 2017-061. Washington: Board of Governors of the Federal
Reserve System, https://doi.org/10.17016/FEDS.2017.061.

State and local governments operate under relatively binding balanced budget rules. While they have
some ability to smooth through revenue shocks using reserve funds and other techniques, their
balanced budget rules require them to bring operating expenditures into line with revenues over
time. Thus, at the state and local level, the shortfall in revenues caused by the Great Recession required either
spending cuts and/or tax increases. In practice, budget shortfalls were mostly closed by reducing purchases of goods and services,
particularly state and local government payrolls and construction outlays.40 Once state and local budgets were no longer facing shortfalls,
revenue growth was generally anemic which restrained the rise in purchases that generally occurs during an expansion. Moreover, a large share
of revenue growth was dedicated to shoring up pension funding (Boyd and Dadayan 2016).41
 2NC NB to Temporary CP
LPRs are eligible for most benefits, and therefore significantly more expensive—CP
solves their link turns but avoids the DA
CBO, 15
Congressional Budget Office Report, How Changes in Immigration Policy Might Affect the Federal
Budget, 2015, https://www.cbo.gov/publication/49868

Under current law, only qualified aliens—primarily comprising LPRs, refugees, and people who have
been granted asylum—and some types of temporary residents are eligible to participate in most
federal benefit programs, provided they meet other program-specific eligibility requirements. (For some
programs, those requirements include waiting periods of several years following the attainment of
qualified alien status). Some noncitizens who are not qualified aliens but are lawfully present (for
example, people who have been approved for deferred action) are eligible to receive Social Security and
Medicare benefits if they qualify on the basis of their age and work history. Other noncitizens are not
eligible to receive benefits from most federal programs; exceptions include emergency health care
services provided through Medicaid, some benefits through the Children’s Health Insurance Program
(CHIP), and some refundable tax credits. However, noncitizens’ U.S.–born children are eligible for the
same federal benefits that are available to other U.S. citizens. Most noncitizens who live and work in
the United States are subject to taxation—including income taxes, payroll taxes, excise taxes, and
estate and gift taxes. The specific taxes for which they are liable, and in some cases the amount of those
taxes, depend on the type of visa they hold and how long they have been in the country. How Might
Proposals to Modify the Immigration System Affect the Federal Budget? Proposals to modify U.S.
immigration policy vary greatly in scope and their potential impact on the federal budget. In this report,
CBO discusses the possible effects that changes to immigration policy would have on several major
federal spending programs and on federal tax revenues. Among the programs and benefits that could be
affected: Health care programs for low-income people—including Medicaid, CHIP, and subsidies for
health insurance (which include premium and cost-sharing assistance for health insurance purchased
through the exchanges that were established in 2014 under the Affordable Care Act, or ACA), The
Supplemental Nutrition Assistance Program (SNAP), Social Security, Supplemental Security Income (SSI),
Medicare, Pell grants and federal student loans, Unemployment insurance, and Refundable tax credits.
Each program has its own set of eligibility rules and criteria, which determine how changes to federal
immigration policy would affect participation in the program and spending by the government.
Consequently, such policy changes could affect spending in varying ways both in the near term and over
time. Spending for some programs would change almost immediately upon enactment if more
noncitizens were allowed to enter the country, whereas spending for other programs would not change
much for a while: For example, under some proposals, foreign-born people who entered the country
lawfully after the policy change was implemented would automatically be eligible for emergency
Medicaid benefits and subsidies for health insurance purchased through exchanges; they also would
begin paying income and payroll taxes as soon as they entered the country. In contrast, additional
spending for Social Security and Medicare would occur mostly after the first few decades, once new
entrants had been in the workforce for a sufficient time and reached the age at which they were eligible
to claim benefits. Because most noncitizens who live and work in the United States are subject to
taxation, changes to federal immigration policy would affect the amount of revenues the government
collects. How total revenues collected by the federal government would change under new immigration
policy would depend on the resulting changes in the size of the U.S. population, the types of people who
would be permitted to work under those new laws, and other considerations. A policy that led to a
significant increase in the working-age population would expand the labor force and lead to a significant
amount of additional revenues from income and payroll taxes. This report does not address in detail
how a change in immigration policy might affect federal spending or tax revenues through its effects on
the broader economy—as evidenced in changes to gross domestic product, employment, and total
wages. In some instances, when those effects would probably be significant, CBO and the staff of the
Joint Committee on Taxation (JCT) have relaxed the long-standing convention of not incorporating such
macroeconomic effects in cost estimates. Immigration legislation also could have a broader set of
effects on output and income that are not reflected in cost estimates. Those additional economic effects
include changes in the productivity of labor and capital, the income earned by capital, the rate of return
on capital (and therefore the interest rate on government debt), and the differences in wages for
workers with different skills. Those effects and their estimated consequences for the federal budget
have, on occasion, been discussed in separate reports regarding the proposed legislation. Earlier this
month, the House of Representatives adopted a rule that requires CBO and JCT to include the budgetary
feedback of any macroeconomic effects in cost estimates for some major pieces of legislation.
Legislation that would make significant changes in immigration policy might be covered by this rule; if
so, future cost estimates provided to the House for such legislation will, to the extent practicable,
incorporate the sorts of effects described here. Because immigration proposals could affect both
spending and revenues, some might result in net budgetary savings whereas others might result in net
budgetary costs. However, assessing the net effect on the federal budget of changes in immigration
policy is complicated by a variety of factors, including a lack of reliable data about the number of
unauthorized residents currently in the country and the extent to which LPRs, temporary residents, and
unauthorized residents use government programs. This report focuses on proposals that would change
the status or composition of three populations of noncitizens: LPRs, temporary workers, and currently
unauthorized residents. Changing the Criteria for Admitting Lawful Permanent Residents. According to
government estimates, about 13 million people currently live in the country as LPRs. Changes to visa
policies that broadly affected the characteristics of new LPRs—for example, by shifting the type of
permanent visas awarded from family-based preferences to work-related or merit-based preferences—
might have a significant impact on the demographic composition of LPRs and, as a result, on their use of
federal programs and payment of taxes. Under current law, permanent residents who meet program
requirements are generally eligible to receive benefits after a specified waiting period or period of
employment; thus, an increase in the number of LPRs would ultimately increase spending for programs
such as Social Security and Medicare. Whether those residents qualify for certain means-tested benefits
(such as those provided by Medicaid and SNAP) is determined, in part, by their income. If the policy
change resulted in more LPRs with sufficiently low income to qualify for benefits, costs for those
federal programs also would increase. In the first five years, the biggest impact on spending would
probably involve the health insurance subsidies; after that, changes in spending for other programs
would have increased importance. Tax revenues also would change if the visa system was altered,
though whether revenues increased or decreased would depend on the details of the policy. Changes
that significantly increased the net flow of foreign-born workers into the United States, and therefore
increased the total population, would lead to an increase in the supply of labor, which would have broad
effects on the economy and the budget. The magnitude of those effects would depend on factors such
as the new immigrants’ rate of participation in the labor force, their unemployment rate, the average
number of hours they work, and their average wage. Changing the Visa System for Temporary Workers.
The United States issued about 9.2 million visas for temporary admission in 2013. About 670,000 of
those visas were issued to temporary workers and the rest were issued to other temporary residents
and visitors. Because temporary workers are generally not eligible to receive benefits from most
federal programs, policies that changed the number of temporary visas awarded to foreign-born
workers might have a smaller effect on the federal budget than changes to the number of permanent
residents. However, if a temporary-worker program allowed participants to eventually adjust their
status, and the number of LPRs or citizens increased as a result, the long-term fiscal impact of those
residents and their children might be significant. A policy that modified the visa system in a way that
resulted in a shift in the demographic composition of temporary workers also would affect the federal
budget. For example, a shift that resulted in a larger share of people with more skills or education
would probably reduce spending on needs-based programs and boost wages and tax revenues.
 Aff
Worth cutting (or at minimum reading and understanding)—
https://object.cato.org/sites/cato.org/files/pubs/pdf/working-paper-21-fix.pdf
 State Budgets N/U
Budget deficits decreasing now, but it’s terminally non unique due to tax reform
Maness 18 Ryan Maness, Ryan joined MultiState in 2012 and is part of the firm's Issue Management
and Tax Policy Consulting teams. His previous experience includes the Colorado House of
Representatives “Twenty-Five States Face Revenue Shortfalls in 2018.” January 9, 2018.
https://www.multistate.us/blog/twenty-five-states-face-revenue-shortfalls-in-2018

Twenty-five states are currently facing a revenue shortfall, which is a marked improvement over
our report from last year, when 31 states were in deficit. New additions to this year's list include
Arizona, Florida, Kentucky, Minnesota, and New Jersey. Colorado, Delaware, Massachusetts, Mississippi,
Montana, New Mexico, Virginia, and Washington have improved enough to drop off our 2018 list.
While this reports seeks to list every state that will have a fiscal deficit, there is considerable variability
in just how large those deficits are. In some instances, such as Rhode Island and Vermont, the deficit is
small enough that very little legislative action will be needed to resolve it; whereas other states, such as
Illinois and New York, may have to consider significant changes to solve their fiscal problems.
Hanging over all of these forecasts is the uncertainty created by federal tax reform, with wide variation
in how the new legislation will affect state finances. For example, a Montana study found that the state
could lose up to $123 million; Wisconsin lawmakers fear that the federal changes could lead to higher
state income taxes; Missouri is expecting only minimal impact, though it is unclear whether it will be a
gain or loss; Colorado lawmakers can expect a windfall of up to $340 million in the new year;
Tennessee economists say that the the bill should give the state at least a modest boost. This will create
a significant wrinkle as lawmakers make their budget plans for the next cycle.

Slew of alt causes to state budgets

McNichol and Waxman 17 Elizabeth McNichol and Samantha Waxman. McNichol is a Senior Fellow
specializing in state fiscal issues including the economy’s impact on state budgets and long-term
structural reform of state budget and tax systems. She also works on related state policy issues
including estate taxes, pension funding, and trends in income inequality. Samantha Waxman joined the
Center in February 2017 as a Research Associate for the State Fiscal Project “States Faced Revenue
Shortfalls in 2017 Despite Growing Economy.” October 4, 2017. https://www.cbpp.org/research/state-
budget-and-tax/states-faced-revenue-shortfalls-in-2017-despite-growing-economy

Despite the continued national economic recovery, state revenue growth is slowing. This slowdown
does not appear to be the harbinger of a recession, but rather the result of many factors mostly, but
not entirely, outside of states’ control. States could also do a better job of planning for uncertainties.

Reasons for Slower-Than-Expected Revenue Growth

Falling energy prices. States with energy-based economies have seen energy-related taxes plummet as
oil prices have dropped. The states with the greatest reliance on energy taxes like Alaska, Louisiana,
Oklahoma, and West Virginia have struggled with budget problems since oil prices began to fall in
2014.[2]

Tax cuts. Costly and ill-advised tax cuts enacted in recent years are suppressing some states’ tax
collections. For example, 11 states have enacted large, phased-in tax cuts since 2011 that will cost a
combined $8 billion a year once fully implemented.[3] Arizona, Indiana, Kansas, Maine, North Carolina,
New Jersey, and New York enacted multi-year tax cuts that continued into 2017, with some of those
cuts extending into 2018 and beyond.[4]

Stock market growth and a possible “Trump effect.” Sluggish stock market growth in 2015 and the
beginning of 2016 slowed income tax collections. The stock market rebounded starting in late 2016, but
income tax collections are now lagging expectations as wealthy taxpayers may be postponing selling
stocks and other assets in the hope that President Trump and Congress will cut capital gains tax
rates.[5]

This is a known phenomenon that was last seen when wealthy taxpayers took capitals gains at the end
of 2012 rather than waiting until 2013 in order to avoid potentially higher tax rates as the “fiscal cliff”
loomed. A similar pattern — but in reverse — may be happening now. President Trump campaigned on
and proposed in April 2017 a tax package that included reduced rates on capitals gains and other
income.[6] Initially, these tax changes were expected to happen in 2017, the first year of the new
administration. This created the incentive at the end of 2016 for wealthy individuals to postpone taking
capital gains until the following year so that the resulting income would be taxed in 2017 at the new
lower rates.
 AT: Link
Don’t drain budgets
Barro 13
Josh Barro, Business Insider, Here’s how Immigration reform reduces the deficit, 2013,
http://www.businessinsider.com/how-immigration-reduces-the-deficit-2013-6

Today, the Congressional Budget Office released a report saying the Senate's comprehensive
immigration reform bill would reduce the federal budget deficit by $200 billion over the next ten years
and $690 billion over the following ten. This chart shows how those numbers add up. Additional
spending is above the line, and added revenues are below it: immigration reform deficit impact Business
Insider, data from Congressional Budget Office An increase in immigration will grow federal spending.
Almost all of the spending increase will be in two areas: low-income health programs like Medicaid; and
refundable tax credits, like the Earned Income Tax Credit and the Child Credit. But those spending
increases will be more than offset by increases in tax receipts, due to two factors. The total population
will rise, meaning more workers and more taxpayers. And immigrants will be more likely to be working
on the books and paying the taxes they owe. All told, that means an extra $2 trillion in tax receipts over
the following decade. Once you net $1.1 trillion in added spending, that should reduce deficits by $900
billion, or 0.2% of GDP over the next 20 years — not a fiscal sea change, but not trivial either. The CBO
report may actually understate the deficit reduction due to immigration reform. Normally, CBO
evaluates legislation on a "static" basis, meaning they don't account for economic changes spurred by
policy change. Here, they relaxed that practice to account for the rise in population that the bill would
cause. They still did not account for broader economic benefits that immigration reform might
produce, such as an increase in productivity or innovation. One of the main rationales for immigration
reform is that it will make the American economy not just bigger but more productive. If that's true,
then its positive effects on GDP, and therefore the federal budget deficit, should be even better than
CBO estimates.

The link makes a bunch of inaccurate assumptions

Malshe 10
Ajay Malshe, Goodwin Procter Fellow at the Capital Area Immigrants' Rights (CAIR) Coalition in
Washington D.C and JD-Cornell Law, FROM OBSOLETE TO ESSENTIAL: HOW REFORMING OUR
IMMIGRATION LAWS CAN STIMULATE AND STRENGTHEN THE UNITED STATES ECONOMY, 2010, 3 Alb.
Gov't L. Rev. 358

Myth 2: Immigrants Strain Our Resources

Another myth anti-immigrant groups frequently perpetuate is that immigrants strain our natural
resources and over-burden government assistance programs. FAIR argues that providing welfare and
other benefits to Americans displaced from their jobs by immigrants costs taxpayers $ 15 billion per
year. n83 FAIR also argues that poor English speaking skills among immigrants have cost the United
States almost $ 175 billion in "lost productivity, wages, tax revenues, and unemployment
compensation." n84

These arguments are not persuasive. A fatal flaw in many of these studies is that they rely upon single-
year "snapshots" of the immigrant population. n85 They neglect to account for the fact that the
income levels and tax contributions of immigrants increase over time and from generation to
generation. n86 These studies also count the education and care of American-born children of
immigrants as costs incurred by immigrant households, yet classify those same children as natives when
they are working, taxpaying adults. n87 Finally, many studies also fail to consider immigrant economic
contributions such as "consumer purchasing power" or entrepreneurial activities. n88 Immigrant
entrepreneurs "create jobs and provide federal, state, and local governments with additional revenue
through sales, income, business, and property taxes." n89 Immigrants do not strain our fiscal resources.
"[T]he average immigrant pays [nearly] $ 1,800 more in taxes [per year] than he or she imposes on the
costs of benefits . . . . " n90 "The average fiscal impact of immigrants . . . is positive in part because
they tend to arrive at young working ages, . . . their descendants are expected to have higher skills
and incomes, . . . [and] they pay [*372] taxes . . . [for] national defense and interest on federal debt,
for which they do not impose costs . . . . " n91 Furthermore, even if immigrants are initially a slight
economic burden when they arrive, over time they become net economic contributors and overcome
the small burdens they once posed. n92

While undocumented immigrants are more likely to consume public resources than those arriving
legally, any negative impact they might have on the economy is minimal. n93 They continue to pay taxes
even at the risk of being detected and facing deportation. n94 The 2005 Presidential Economic Report
noted that undocumented immigrants contribute to tax rolls even though they "are ineligible for almost
all Federal public assistance programs and most major joint Federal-state programs." n95 Individual
state studies also report that undocumented immigrants tend to have a positive impact on a state's
gross product because of their contributions to tax revenue, despite being ineligible for state assistance
programs. n96

Finally, immigrants in the United States tend to climb the socioeconomic ladder over time. According to
a 2003 RAND Corporation study, second- and third-generation "Hispanic men have made great strides in
closing their economic gaps with native whites." n97 For instance, Latino men born during 1895 and
1899 who immigrated to the United States earned 60.5 cents for every dollar earned by white men with
whom they competed, despite having four less years of education on average. n98 Their adult sons went
on to earn 76.3 cents for every dollar earned by [*373] their white counterparts, while their grandsons
earned 81.9 cents on the dollar and had closed the education gap to 1.6 years. n99 Each successive
generation has been able to close the educational and wage gap with native white Americans, which
leads to generational progress and increasing contributions to the economy and its resources. n100

No DA
Rueben 17
Kim Rueben, senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute, and Sarah
Gault, research associate in the Urban-Brookings Tax Policy Center, contributing to the State and Local
Finance Initiative, State and Local Fiscal Effects of Immigration, June 2017,
http://www.taxpolicycenter.org/sites/default/files/publication/142071/state_and_local_fiscal_effects_
of_immigration_1.pdf

Understanding the contribution of immigrants to state and local finances is important when considering the
economic growth and fiscal health of communities. The fiscal impacts of immigrants and natives at the state and local level depend on the

balance between their contribution to revenues by paying taxes and their draw on expenditures by
consuming public services. We found the following: ■ The net fiscal effects for 2011–13 were largely related to how we measured and attributed the costs of government services, particularly how
we allocated the costs of public goods that do not increase with new entrants to the population. ■ Fiscal impacts at the state and local level varied across place depending on the demographic characteristics
of immigrants and native adults, with their relative numbers of dependent children (and their associated education costs) having the most effect. ■ Relative fiscal impacts also relate to state and local decisions on how they raise

public education makes up the largest part of state and local budgets, these
revenues (their tax system) and what level of spending they choose for specific services. ■ Because

costs explained much of the differences across places when we attributed the costs of educating children to their parents. However, these costs are an investment in the

future, contributing to the skills and abilities of our future labor force, and estimates for a point in time
do not capture students’ future tax contributions. Estimation Approach Many issues must be considered when empirically estimating the fiscal effects of immigration. First,
how are public goods treated? Some expenditures, such as education and health care, increase with each additional person; others, such as national defense, are not affected when a person is added to the population. To account
for this difference, we used both an average-cost approach for public-good expenditures, which allocates the costs of each service equally to immigrants and natives on a per capita basis, and a marginal-cost approach, which
assumes each additional immigrant does not to add to the costs of administering the subset of state and local government services categorized as public goods. It makes a big difference whether we assign public-good
expenditures, which make up about half of total expenditures, to all persons, or assume they are fixed amounts and assign no portion of these costs to new entrants. The validity of assigning or not assigning these additional costs
to immigrants in part depends on when immigrants arrive. It is less justifiable to assign these costs to immigrants who have arrived in the past 5 or 10 years, but it is more justifiable when immigrants have been part of the
community for decades. Thus, readers may want to consider the true cost as being somewhere in between our reported figures. In states where newer immigrants make up a larger share of the immigrant population, the marginal
estimates would be more appropriate. For states with longstanding immigrant populations, such as California and Texas, different estimates would be appropriate if thinking about all immigrants versus new arrivals. A second issue

Immigrants typically come to this country as

is how the costs of dependent children are treated. One approach is to bundle their costs with their parents’ costs.

working-age adults—that is, their own STATE AND LOCAL FISCAL EFFECTS OF IMMIGRATION 3 education has been paid for by a
foreign government and they often immediately begin working and paying taxes. When this is the
case, the costs of education we attribute to immigrants are the costs of educating their children, both those
born abroad and those who were born in this country. Dependent children increase government expenditures on education, but considering education purely as a “cost” does

not take into account that education is an investment in future productivity. Society will reap the
rewards of education when children grow up and contribute to state and local coffers. Although our estimates attributed the
cost of kindergarten through grade 12 (K–12) education fully to the parents of the dependent children being educated, we also present alternatives that consider the public benefit to education. Another consideration is the
accounting method used. We used a static approach for our state and local estimates, focusing on a snapshot in time from 2011 to 2013. Other fiscal impact studies have implemented a dynamic approach that captures taxpayers’
fiscal impact over the course of their lifetimes and often includes the future benefits of taxes paid by them and their children. The NAS report has estimates of this type on an aggregate basis across all levels of government, and in
these dynamic estimates the children of immigrants often end up contributing the largest per capita share to the country’s (federal, state and local) fiscal bottom line. 4 Economic impacts of immigration can also affect states’ fiscal
pictures. Regarding the impact of immigrant inflows on the wages and employment of natives or overall economic growth, we followed the standard approach and did not take these effects into account in the fiscal impact
estimates presented here. Thus, given other findings in the NAS study that immigrants add to economic growth, our estimates are conservative—that is, they overstate the costs of immigration and understate the benefits.
Measurement Methods Our analysis examined the state and local government fiscal effects of immigration for each of the 50 states and the District of Columbia (DC) over the three-year period from 2011 through 2013. We
focused on the independent individual—whom we refer to here as an adult—as the unit of analysis, rolling up the fiscal costs of (and any taxes received from) dependents to their parents. Thus, when we discuss the fiscal
contribution or burden of adults, those amounts include the education costs of their dependent children. Appendix A describes how we differentiated between adults and dependent children. This adult-person concept
acknowledges that children’s costs are a result of their parents’ decisions independent of the children’s immigrant status. We examined fiscal effects for immigrants and natives, who were defined as follows: ■ Immigrants were
born abroad to parents who were not US citizens. ■ Natives were born in the United States (or born abroad to American parents). We constructed our samples of individuals in each state in each group from the Current Population
Survey Annual Social and Economic Supplement (CPS ASEC)5 data covering 2011–13 to achieve a sufficient sample size. Our sample represented, on a weighted basis, about 223 million independent adults per year, of whom 16
percent were immigrants. The remaining 84 percent were natives. The native group included not only individuals whose parents may have been immigrants but also individuals whose families had been in the United States for
many generations. We sometimes distinguish natives with immigrant parents (the adult 4 STATE AND LOCAL FISCAL EFFECTS OF IMMIGRATION children of immigrants) from other natives as a way of highlighting the future benefits
of some current incurred public costs. This group, natives with immigrant parents, made up 8 percent of all adults, or about 10 percent of the native adult population. Residing with the 223 million independent adults represented
by our sample were about 85 million dependent children.6 The CPS samples were not explicitly chosen to be representative of immigrants at the state level.7 Thus our results should be considered indicative of general patterns, but
actual fiscal impacts may vary, especially in states with relatively few immigrants in the sample. We paired this information with data on revenues and spending from Census of Governments Annual Survey of State and Local
Government Finances.8 These data include income, sales, and property taxes paid to state and local governments and the costs of providing public education as well as the costs of building and maintaining roads and providing

Total state and local government revenues averaged $3.3

police and fire protection. We averaged three years of financial data to smooth out payments.

trillion per year in 2011–13, and total state and local government expenditures averaged $3.17 trillion,
nearly balancing out. We included all state and local revenue and expenditure amounts except for Medicaid spending on health care services in nursing homes and other institutions such as mental health
facilities ($72 billion) because individuals in institutions were not represented in the CPS. Immigrants are much less likely to be part of this institutional population because they have lower probabilities of being in nursing homes
(because of age differences with natives but also because, even considering age, immigrants are less likely to be in nursing homes).9 Immigrants also make up smaller shares of other institutionalized populations, including those
incarcerated.10 Excluding the institutional portion of Medicaid spending widened the gap between aggregate US revenues and expenditures in 2011–13, leaving all but two states with positive budget balances. We assigned costs
incurred and revenues received from the Census of Governments data based on information reported in the CPS ASEC either directly (e.g., income or property taxes paid) or STATE AND LOCAL FISCAL EFFECTS OF IMMIGRATION 5
FIGURE 1 Share of Immigrants in the Adult Population, by State CPS ASEC, 2011–13 Source: Panel tabulations of the Current Population Survey—Annual Social and Economic Supplement for 2011–13. Note: The percentages
displayed here have been rounded to the nearest 1 percent. By state, West Virginia had the lowest proportion of immigrants (1 percent), and California had the highest proportion (35 percent). Seven states had adult immigrant
populations that constituted at least 20 percent of their total adult population (table 1). These states and the other states at the top of table 1 (and in the darker shades of blue in figure 1) with immigrant shares above the national
average of 16 percent were more represented in the immigrant population than in the overall population nationwide. Conversely, the states with immigrant shares below 16 percent were less represented in the immigrant
population nationwide than in the overall population. Ten states had adult immigrant populations that made up less than 5 percent of the state’s total adult population. Extreme caution should be taken when looking at the fiscal
impact estimates for these states in particular (found at the bottom of table 1 and in the lightest shade of blue in figure 1) because they had the lowest number of unweighted sample cases of immigrant adults and therefore might
not fairly represent the actual immigrants within the state. 12 Share of immigrants: Overall US share of immigrants: 16% 0% 5% 10% 15% 20% 6 STATE AND LOCAL FISCAL EFFECTS OF IMMIGRATION TABLE 1 States with Highest and
Lowest Percentages of Immigrant Adults, 2011–13 Immigrant (%) Native (%) Top 15 states and jurisdictions by % immigrant California 35 65 New Jersey 28 72 New York 27 73 Nevada 25 75 Florida 23 77 Texas 21 79 Hawaii 21 79
Maryland 19 81 Arizona 18 82 District of Columbia 17 83 Massachusetts 17 83 Illinois 17 83 Washington 17 83 Connecticut 16 84 Rhode Island 16 84 United States 16 84 Bottom 10 states by % immigrant Louisiana 4 96 Missouri 4
96 South Dakota 4 96 Alabama 4 96 Maine 3 97 North Dakota 3 97 Wyoming 3 97 Montana 3 97 Mississippi 3 97 West Virginia 1 99 Source: Panel tabulations of the Current Population Survey—Annual Social and Economic
Supplement for 2011–13. Note: See text for definitions of adult and immigrant status. Fiscal Effects on State and Local Budgets The net fiscal impact estimates presented here reflect annual amounts for a recent snapshot in time

As noted above, some of the

rather than the overall fiscal impacts over the course of a lifetime, and thus they cannot tell us about the contribution or burden of immigrants and natives over time.

costs borne now, most notably for education, can translate into higher tax payments in later years. In
theory, and if balanced budget rules held, the net difference in revenues contributed and expenditures
received across all individuals in each state in each year would be zero. In fact, because certain state
and local funds run surpluses and deficits, no state has state and local revenues precisely equal to state and local
expenditures in a given year, and as noted, states generally ran surpluses, especially after excluding institutional Medicaid spending. STATE
AND LOCAL FISCAL EFFECTS OF IMMIGRATION 7 Nationwide, an average net difference in revenues and expenditures of $900 was assigned per adult. 13 By jurisdiction, average net differences resulting from fiscal imbalances
varied from a deficit of $850 per adult in the District of Columbia to a surplus of $6,450 per adult in Alaska. In figure 2 we show the differences in net fiscal impact (revenues less expenditures) between immigrant and native adults
assuming average and marginal cost allocations. By presenting immigrant-native differences, we eliminate variation from whether a particular state was running a surplus or deficit. Estimates are presented for all states in figure 2,
but readers should exercise caution in interpreting these results, especially when examining differences for states with limited sample sizes. Average Cost Allocation When the costs of public goods were allocated across all
individuals equally, immigrant adults were estimated to be costlier to state and local budgets than native adults. Nationwide there was a −$2,950 average gap in net fiscal impact between immigrants and natives for the 2011–13
period. Immigrant adults incurred a net cost of $1,600 per year on average, compared to a net benefit of $1,350 for native adults. Among the 15 jurisdictions with the largest share of immigrants in their adult population, California
had the largest difference (−$4,800), between the fiscal shortfall of immigrant adults (−$2,050) and the fiscal benefit of native adults ($2,750), and Maryland had the smallest difference (−$750). Because many of the states with
small numbers of immigrant adults also had lower taxes and spending, the spending per native adult was lower for these states than for the states where immigrants often settle. With an aging native-born US population, these
estimates could look very different in coming years as natives retire and require more social services. Recently arrived immigrant adults had small net fiscal burdens relative to other immigrant adults who had been in the United
States longer because new immigrants tended to be younger and had more education and fewer dependent children during the observation period.14 Because our estimates are static, they capture education expenditures on
school-age children without accounting for future fiscal benefits from higher tax payments once they have completed their education. Thus, we found that dependent children were costly for both immigrant and native parents. For
adults who had dependent children (44 percent of immigrants and 30 percent of natives), immigrants and natives both had net fiscal burdens (−$7,900 and −$5,650 per adult, respectively). Looking at the 68 percent of adults in our
sample with no dependent children, both immigrants and natives were net contributors to state and local governments on average (contributing $3,350 and $4,400 per adult, respectively). Native adults with immigrant parents,
defined as the second generation in the NAS report, contributed the most to state and local government coffers in 2011–13. As highlighted in the NAS report, their higher average contribution relative to other natives was in part
because native adults with immigrant parents had fewer dependent children and higher education levels on average. Most states followed the national pattern and saw these second-generation adults contributing the most, but
the pattern varied across states. In some states, including California and Illinois, natives with native parents made higher average fiscal contributions than natives with immigrant parents. 8 STATE AND LOCAL FISCAL EFFECTS OF

Although total public spending no doubt increases with the size of the population,
IMMIGRATION Marginal Cost Allocation

some categories of spending are likely to be unaffected, at least for a small increase in immigrant
population and in the short run. For these analyses, about half of all spending (and revenues) was allocated based on personal or family attributes. But for many spending categories, such as
public safety, hospitals, and libraries, the costs were allocated across all persons (both adults and dependents) equally. Similarly, some revenue sources, such as transfers from the federal government for roads and those from
natural resource extraction, were allocated on a per capita basis. Although we did not specify which particular expenditures were public goods, some state and local expenditures are fixed amounts that are not higher because of
the presence of immigrants. Under an average cost allocation, the fixed-cost amounts assigned to natives are lower than they otherwise would be because the costs are spread across a larger population with more immigrant
arrivals, even while the marginal cost to the state does not change. 15 For some communities, especially those facing declining populations, the influx of new immigrants can help lower their fixed costs. And for some government
spending—notably bond repayments and public pension obligations—the benefits may have been received by earlier generations, so having a larger population to pay off these debts benefits the existing population. But if new
immigrants are not adding to these costs, it may not be appropriate for them to share equally in the burden. Thus, if we assign these fixed revenues and expenditures only to native adults and their dependents on a per person
basis instead of assigning them evenly to all persons, we assume a marginal amount of zero for immigrant adults and their dependents. 16 The −$1,600 average net fiscal burden of immigrant adults across the United States under
an average cost allocation turned to a $500 net fiscal contribution under a marginal allocation. 17 Thus, the higher fiscal costs for immigrants in our average cost allocation estimates came largely from these fixed costs. Under the
assumption that immigrant adults do not bear these costs, net positive fiscal impacts decreased for native adults. Unsurprisingly, these cost increases for natives (and the corresponding cost decreases for immigrants) were largest
in the states with more immigrants. As the immigrant share of a state’s adult population composed of declines, the impact of shifting from an average to a marginal allocation of these fixed revenues and expenditures will diminish.
Across the United States, the negative gap in net fiscal impact between immigrant and native adults narrowed from −$2,950 to −$450 under the marginal cost allocation (figure 2). STATE AND LOCAL FISCAL EFFECTS OF
IMMIGRATION 9 FIGURE 2 Difference in Net Fiscal Impact between Immigrants and Natives Using Average and Marginal Cost Allocations, by State CPS ASEC, 2011–13 Source: Panel tabulations of the Current Population Survey—
Annual Social and Economic Supplement for 2011–13. Note: The fiscal impact amounts for individual states displayed here have been rounded to the nearest dollar. Difference: Immigrant-Native Difference: Average Cost Allocation
US immigrant-native difference per adult: −$2,950 Immigrant-Native Difference: Marginal Cost Allocation US immigrant-native difference per adult: −$450 −$3,000 −$1,500 $0 $1,500 1 0 STATE AND LOCAL FISCAL EFFECTS OF
IMMIGRATION Moving from an average to marginal cost allocation for the 15 jurisdictions with the largest share of immigrants in their adult population narrowed the fiscal cost gap between immigrants and natives in these areas
from −$3,400 to −$150. Nine of these top 15 jurisdictions had the net fiscal impact of their immigrant adults go from negative to positive by switching to a marginal cost allocation. In California, for example, immigrant adults went
from generating a large net negative burden for the state (−$2,050) to making a net positive contribution ($1,050). Going from an average cost allocation to a marginal cost allocation also had a major impact in New York:
immigrants went from contributing $4,350 less than natives to contributing $100 more, on average. In a few states, including Texas, the net fiscal impact gap between immigrant and native adults closed but remained fairly large
and negative (−$2,050). In Florida, a marginal cost allocation brought the estimated net fiscal impacts of the two groups within $100 of one another, and the difference in estimated fiscal impacts of the immigrants and natives
virtually disappeared in Illinois under a marginal cost allocation. However, many immigrants have been in the United States for decades. If we were to only shift the fixed costs (and revenues) currently being borne by new
immigrants who have arrived since 2006 (rather than all immigrants) to the remaining population (including other immigrants previously resident), the fixed costs for the rest of the population would increase by about $50 per

recent immigrants would provide a net fiscal benefit in most states. Again, the size of the shift in costs depends on the number
adult. Under this allocation,

and make-up of recent immigrant families. This alternative approach recognizes that, in many states, immigrants are long-term residents of this

country. Demographic Differences Demographic differences between immigrants and natives across states played a
major role in the differences in net fiscal impact. The two groups differed among themselves within and
across states on demographic characteristics, especially the number of dependent children per adult.
Although in this brief we focus on differences in the average number of dependent children per adult, we also considered differences in average age, income, and education level in chapter 9 of the NAS report (NAS 2016). In our
sample, immigrant adults had an average of 0.52 dependent children and natives had an average of 0.36 dependent children. Although there was some variation, this pattern held across most states (table 2), with the notable

Before they reach working age and begin to contribute taxes, all dependent children
exception of DC, Louisiana, and Montana.

are a net cost to state and local budgets. Education expenditures for school-age children are often the largest or second-largest items in state and local budgets (23 percent on average), which
means that for people with children, these costs were larger. Additionally, adults with more dependent children were assigned larger amounts for expenditures that were allocated to all persons (about half of all state and local
spending).18 Thus, if we allocate fixed costs on an average basis across all individuals (both adults and dependent children) and assign the costs of public education to the parents of those being educated, a higher share of
education spending and overall expenditures would be allocated to immigrant adults. In states such as Texas and Washington, the differences in average number of children help explain the differences in net fiscal effects. STATE
AND LOCAL FISCAL EFFECTS OF IMMIGRATION 1 1 TABLE 2 Average Number of Dependent Children per Adult, by Immigrant Status, 2011–13 Top 15 states and jurisdictions with the highest percentages of immigrant adults
Immigrants Natives California 0.52 0.35 New Jersey 0.48 0.35 New York 0.44 0.34 Nevada 0.56 0.34 Florida 0.39 0.31 Texas 0.64 0.39 Hawaii 0.44 0.35 Maryland 0.47 0.34 Arizona 0.59 0.36 District of Columbia 0.28 0.27
Massachusetts 0.44 0.33 Illinois 0.54 0.36 Washington 0.56 0.33 Connecticut 0.46 0.36 Rhode Island 0.47 0.31 United States 0.52 0.36 Source: Panel tabulations of the Current Population Survey—Annual Social and Economic
Supplement for 2011–13. Notes: These numbers reflect the average number of dependent children per adult and do not include an individual’s adult children. Dependent children are split equally between parents in two-parent

On average, immigrant adults

households. In addition to differences in the number of dependents, immigrant and native adults differed in their age, income, and education distributions.

were younger, largely because a smaller share were elderly (age 65 or older), and they had lower
income and education levels (although the share of immigrant adults with a bachelor’s degree or more
was comparable to that of natives). These general patterns, however, varied across states. In Michigan, for example, a high percentage of immigrant adults relative to native adults had a
bachelor’s degree or more. To highlight the relationship of demographic and economic factors and net fiscal impact, we

examined how differences in characteristics like age structure and number of dependents across the
two groups affected their average net contributions (or burdens) by using multiple regression analyses.19
We regressed the net fiscal impact per adult at the state and local level from our average cost allocation
estimates on immigrant status. With controls for age group, year, sex, education, race and ethnicity,
and number of dependents, the negative gap in net fiscal impact between immigrant and native
adults was significantly diminished, going from −$2,950 to just −$800.
Native population makes it inevitable—Immigration increases revenue
Ehrenfreund 16
Max Ehrenfreund, Wonkblog-Washington Post, These maps show how immigrants affect your state’s
budget, 2016, https://www.washingtonpost.com/news/wonk/wp/2016/09/28/these-maps-show-how-
immigrants-affect-your-states-budget/?utm_term=.16f6dd6beacb

Local politicians who are skeptical of immigration often worry that newcomers will place a financial
burden on city and state governments. These governments are responsible for major expenses related
to immigrant families, especially education, and since immigrants tend to own less property and make
less money, they also often pay less in taxes. Figuring out just what immigrants mean for local
governments' finances is a challenge, though. The fiscal consequences vary widely from place to place,
depending on the region's economy, how taxes are collected, immigrants' earnings and the number of
children they have in school. On average, state governments spend about $3,300 more on each
household headed by immigrants than those households pay in taxes a year, according to a
comprehensive new report published last week by the nonpartisan National Academies of Science,
Engineering and Medicine. CONTENT FROM LEIDOS Roughly 7 million young people in America need
treatment for substance abuse. Read More However, the report, which published last week, found that
these families can yield benefits over the long term, as their children grow up, find well-paying jobs,and
begin paying more taxes to their local governments. "The main thing that is affecting the spending level,
especially at the state and local level, is the number of school-age kids," said Kim Rueben, one of the
authors of the report and an economist at the Urban Institute. "These things are being looked at as
costs, but in some ways, they’re our investment into the future." The cost of households headed by first-
generation immigrants varies widely by state, however. In Minnesota, they cost the government about
$10,000 on average, but in neighboring North Dakota, the state actually receives an average of nearly
$5,000 more in taxes from first-generation households than it spends on them. Meanwhile, households
headed by the second generation -- the children of immigrants -- pay an average of $3,000 more in taxes
to the governments of their states than those governments spend on them. In Mississippi, the figure is
$8,000, according to the report. By contrast, the state of Utah spends about $1,150 on the average
second-generation household beyond what that household pays in taxes. "There is really surprising and
consistent intergenerational progress within almost all immigrant groups in the United States," said
Michael Fix, the president of the nonpartisan Migration Policy Institute, who was not involved in writing
the report. "We see substantial progress from the first to the second generation." The figures are based
on Census data from 2011 through 2013. During that period, there were far more first-generation
households than second-generation households, and recent immigrants and their families were a net
cost for state governments. The children in those first-generation households present substantial costs
for state governments as they attend school, as do the children of parents born in the United States.
"Obviously, for all of us, kids are a substantial cost and are contributing nothing to society," said David
Kallick, who directs immigration research at the nonpartisan Fiscal Policy Institute in New York. "And yet
obviously, we invest in them -- partly because we love them and care about their future, but also
because we think in the long run as a society, it’s going to be good for us all." When they come of age,
they will begin working and paying taxes. Often, researchers have found, second-generation immigrants
are more successful economically than both their parents or other Americans whose families have been
in the country much longer. "They’re very motivated to realize their parents dreams for them," Kallick
said. "They’re very motivated to do well, and they do do well, both in school and in the labor market."
That makes them especially valuable to state governments. Compared to the $3,000 in fiscal surplus
generated by the average second-generation immigrant household, households headed by third and
subsequent generations yield just $2,400 on average, according to the report. The report's authors did
not calculate whether the costs to states of immigration exceed the benefits over the long term,
because of the unknown variables: the children's educational attainment, how much they earn, whether
they move to other states, and how states tax their citizens in the future. Taking a very broad view, all
immigrants would impose fiscal costs over the long term. Federal and state governments combined
spend more on the average American than the average American pays in taxes each year, and almost all
Americans are descended from prior immigrants. Unless policies on taxation and public expenditures
change, the descendants of today's immigrants can be expected to contribute to the national debt, just
like the rest of the country. "It’s not just the immigrants who are running up the tab," Fix said. "It’s
everybody who’s running up the tab." All the same, countries with expanding populations generally
have sounder finances than those with declining populations -- even if the government is running a
deficit at the moment. An increasing labor force has more capacity to earn money and pay taxes,
giving a government more flexibility to respond to a financial crisis. A growing population can more
easily pay off the debts incurred by the smaller generations of the past.
 AT: Low-Skill Link
Low-skill immigrants use less welfare than low-income citizens, and have a greater
economic output
Dalmia 13 (Shikha is a senior policy analyst at Reason Foundation – “Heritage's Updated Study on the
Welfare Costs of Immigrants: Garbage In, Garbage Out,” May 7, 2013 -
http://reason.com/blog/2013/05/07/heritages-updated-study-on-the-welfare-c)///JP

But Rector does the exact same thing in his study. He counts the costs that welfare for low-skilled
immigrants would impose on government coffers, but neglects the fiscal impact of the economic growth
that these immigrants would spur. Studies that have done a fuller accounting suggest that the GDP-
growth spurred is greater than the fiscal costs of low-skilled immigrants. A 2006 analysis by the Texas
comptroller estimated that low-skilled unauthorized workers cost the state treasury $504 million more
than they paid in taxes in 2005. Without them, however, the state’s economy would have shrunk by 2.1
percent, or $17.7 billion, as the competitive edge of Texas businesses diminished. Likewise, a 2006 study
by the Kenan Institute at the University of North Carolina found that although Hispanic immigrants
imposed a net $61 million cost on the state budget, they contributed $9 billion to the gross state
product. Furthermore, a 2012 paper for Cato Institute written by UCLA’s Raul Hinojosa-Ojeda that
deployed a dynamic model found that immigration reform would increase U.S. GDP by $1.5 trillion in
the 10 years after enactment. Hinojosa-Ojeda also ran a simulation examining the economic impact of
the policy favored by Heritage: the removal or exit of all unauthorized immigrants. The economic result
would be a $2.6 trillion decrease in estimated GDP growth over the next decade. The other big problem
with this version of Rector’s study, as with the last one, is that it compares the welfare costs of average
American households with low-skilled immigrant ones to show how much more the latter consume in
welfare. But if you compare the latter with lower-income American families, the advantage is on the
side of immigrants. Rector’s original study was also criticized for engaging in single-entry bookkeeping.
This means he counted what the (American-born) children of low-skilled immigrants cost in welfare but
not the taxes they’d pay when they grew up. Rector responds to this criticism this time by noting: “Even
if all the children of unlawful immigrants graduated from college, they would be hard-pressed to pay
back $6.3 trillion in costs over their lifetimes.” Perhaps, but that misses the point. If he doesn't want to
count their contributions then he should remove them from the equation altogether. Most of these kids
are Americans anyway. Simply look at the welfare consumption of low-skilled immigrant adults. That
number would be a lot, lot less than the eye-popping $6.3 trillion because these folks don’t qualify for
the full panoply of means-tested benefits that natives do.

Most immigrants don’t qualify to receive social assistance

Campbell 17 (Alexia is a fellow at the Investigative Reporting Workshop and a staff correspondent for
the National Journal – “Poor immigrants are the least likely group to use welfare, despite Trump’s
claims,” August 4, 2017 – https://www.vox.com/policy-and-politics/2017/8/4/16094684/trump-
immigrants-welfare)///JP

Butthe idea that immigrants come to America to live off the government is wrong. The vast majority of
new immigrants are not eligible for welfare. Even green card holders must wait for years to get most
benefits. The United States already rejects applications from potential immigrants who could end up on
government assistance — people who aren't financially stable can't even get tourist visas. And research shows that poor,
uneducated immigrants are the least likely group to use welfare. Still, the RAISE Act, introduced this week by
two House Republicans, would slash the flow of legal immigration and favor those who can "stand on their own
two feet, and pay taxes, and not receive welfare." It would also cap the number of refugees allowed into the
country, and would prioritize high-skilled, affluent immigrants who speak English. To garner support for such a
measure, the White House made several false claims about immigrants and their impact on the welfare system:
"The RAISE Act prevents new migrants and new immigrants from collecting welfare … they're not going to come in
and just immediately go and collect welfare." —President Donald Trump The new bill doesn't do much more
than current laws do to prevent immigrants from collecting welfare — in large part because it's actually
quite hard for immigrants to get public assistance. Depending on the state, undocumented immigrants, DACA
immigrants (a.k.a. DREAMers), H-1B workers, and other temporary workers can immediately apply for food
assistance available for pregnant women, and in most states, free or reduced-price lunches for kids in school are
provided regardless of immigration status. But these immigrants do not qualify for the vast majority of
public benefits — including food stamps, Social Security, Medicaid, and Medicare. That’s true even
though undocumented immigrants contribute billions of dollars to these programs. Even green card
holders, who are permanent residents of the US, have to wait five years to qualify for nearly all social
welfare programs. There are a few exceptions, including immigrants who served in the US military or are disabled. The only groups
of newcomers who can enter the United States and immediately receive social assistance are refugees
and asylum seekers. Even then, some benefits —like cash assistance — require refugees to work to
continue receiving the benefit.
Econ Mechanics
Neg
 AT: Econ Impact D
Econ decline causes war—
First is diversionary wars—defense doesn’t assume populist leaders like Trump and Le
Pen
Foster 12/19
Dennis M. Foster is professor of international studies and political science at the Virginia Military
Institute, Washington Post, December 19, 2016, “Would President Trump go to war to divert attention
from problems at home?”, https://www.washingtonpost.com/news/monkey-cage/wp/2016/12/19/yes-
trump-might-well-go-to-war-to-divert-attention-from-problems-at-home/?utm_term=.b2c7c2ead798

If the U.S. economy tanks, should we expect Donald Trump to engage in a diversionary war? Since the
age of Machiavelli, analysts have expected world leaders to launch international conflicts to deflect
popular attention away from problems at home. By stirring up feelings of patriotism, leaders might
escape the political costs of scandal, unpopularity — or a poorly performing economy.

One often-cited example of diversionary war in modern times is Argentina’s 1982 invasion of the
Falklands, which several (though not all) political scientists attribute to the junta’s desire to divert the
people’s attention from a disastrous economy.

In a 2014 article, Jonathan Keller and I argued that whether U.S. presidents engage in diversionary
conflicts depends in part on their psychological traits — how they frame the world, process information
and develop plans of action. Certain traits predispose leaders to more belligerent behavior.

Do words translate into foreign policy action?

One way to identify these traits is content analyses of leaders’ rhetoric. The more leaders use certain
types of verbal constructs, the more likely they are to possess traits that lead them to use military force.

For one, conceptually simplistic leaders view the world in “black and white” terms; they develop
unsophisticated solutions to problems and are largely insensitive to risks. Similarly, distrustful leaders
tend to exaggerate threats and rely on aggression to deal with threats. Distrustful leaders typically
favor military action and are confident in their ability to wield it effectively.

Thus, when faced with politically damaging problems that are hard to solve — such as a faltering
economy — leaders who are both distrustful and simplistic are less likely to put together complex,
direct responses. Instead, they develop simplistic but risky “solutions” that divert popular attention
from the problem, utilizing the tools with which they are most comfortable and confident (military
force).

Based on our analysis of the rhetoric of previous U.S. presidents, we found that presidents whose
language appeared more simplistic and distrustful, such as Harry Truman, Dwight Eisenhower and
George W. Bush, were more likely to use force abroad in times of rising inflation and unemployment. By
contrast, John F. Kennedy and Bill Clinton, whose rhetoric pegged them as more complex and trusting,
were less likely to do so.
What about Donald Trump?

Since Donald Trump’s election, many commentators have expressed concern about how he will react to
new challenges and whether he might make quick recourse to military action. For example, the
Guardian’s George Monbiot has argued that political realities will stymie Trump’s agenda, especially his
promises regarding the economy. Then, rather than risk disappointing his base, Trump might try to rally
public opinion to his side via military action.

I sampled Trump’s campaign rhetoric, analyzing 71,446 words across 24 events from January 2015 to
December 2016. Using a program for measuring leadership traits in rhetoric, I estimated what Trump’s
words may tell us about his level of distrust and conceptual complexity. The graph below shows
Trump’s level of distrust compared to previous presidents.

These results are startling. Nearly 35 percent of Trump’s references to outside groups paint them as
harmful to himself, his allies and friends, and causes that are important to him — a percentage almost
twice the previous high. The data suggest that Americans have elected a leader who, if his campaign
rhetoric is any indication, will be historically unparalleled among modern presidents in his active
suspicion of those unlike himself and his inner circle, and those who disagree with his goals.

As a candidate, Trump also scored second-lowest among presidents in conceptual complexity.

Compared to earlier presidents, he used more words and phrases that indicate less willingness to see
multiple dimensions or ambiguities in the decision-making environment. These include words and
phrases like “absolutely,” “greatest” and “without a doubt.”

A possible implication for military action

I took these data on Trump and plugged them into the statistical model that we developed to predict
major uses of force by the United States from 1953 to 2000. For a president of average distrust and
conceptual complexity, an economic downturn only weakly predicts an increase in the use of force.

But the model would predict that a president with Trump’s numbers would respond to even a minor
economic downturn with an increase in the use of force. For example, were the misery index
(aggregate inflation and unemployment) equal to 12 — about where it stood in October 2011 — the
model predicts a president with Trump’s psychological traits would initiate more than one major
conflict per quarter.

Second, alters incentives—prefer robust statistical analysis

Reghr 13
Ernie Reghr, Senior Fellow in Arctic Security at The Simons Foundation, 2-4-13, “Intrastate Conflict: Data,
Trends and Drivers” http://www.isn.ethz.ch/Digital-Library/Articles/Special-
Feature/Detail/?lng=en&id=158597&tabid=1453496807&contextid774=158597&contextid775=158627

“The most robustly significant predictor of [armed] conflict risk and its duration is some indicator of economic
prosperity. At a higher income people have more to lose from the destructiveness of conflict; and higher per-capita
income implies a better functioning social contract, institutions and state capacity.”[3] This correlation between
underdevelopment and armed conflict is confirmed in a 2008 paper by Thania Paffenholz[4] which notes that
“since 1990, more than 50% of all conflict-prone countries have been low income states…. Two thirds of all
armed conflicts take place in African countries with the highest poverty rates. Econometric research
found a correlation between the poverty rate and likelihood of armed violence….[T]he lower the GDP
per capita in a country, the higher the likelihood of armed conflict.” Of course, it is important to point
out that this is not a claim that there is a direct causal connection between poverty and armed
conflict. To repeat, the causes of conflict are complex and context specific, nevertheless, says
Paffenholz, there is a clear correlation between a low and declining per capita income and a country’s
vulnerability to conflict. It is also true, on the other hand, that there are low income countries that
experience precipitous economic decline, like Zambia in the 1980s and 1990s, without suffering the kind
of turmoil that has visited economically more successful countries like Kenya and Cote d’Ivoire.
Referring to both Zambia and Nigeria, Pafenholz says these are cases in which “the social compact” has
proven to be resilient. Both have formal and informal mechanisms that are able to address grievances in
ways that allowed them to be aired and resolved or managed without recourse to violence. A brief
review of literature on economics and armed conflict, published in the Journal of the Royal Society of
Medicine, indicates the complexity and imprecision behind the question, “does poverty cause conflict?”
While many of the “world’s poorest countries are riven by armed conflict,” and while poverty, conflict
and under-development set up a cycle of dysfunction in which each element of the cycle is exacerbated
by the other, it is also the case that “conflict obviously does not just afflict the poorest countries” – as
Northern Ireland and the former Yugoslavia demonstrate. “Many poor countries are not at war; shared
poverty may not be a destabilizing influence. Indeed, economic growth can destabilize, as the wars in
countries afflicted by an abundance of particular natural resources appear to show.”[5] Another review
of the literature makes the general point that “the escalation of conflict during economic downturns is more
likely in countries recovering from conflict, or fragile states.” That makes Africa especially vulnerable on two
counts: economic deprivation and recent armed conflict are present in a relatively high number of
states, making the continent especially vulnerable to economic shocks. As a general rule, “weak
economies often translate into weak and fragile states and the presence of violent conflict, which in turn prevents
economic growth.” One study argues that “the risk of war in any given country is determined by the initial level of
income, the rate of economic growth and the level of dependency on primary commodity exports.” Changes in
rates of economic growth thus lead to changes in threats of conflict. As unemployment rises in fragile states this
can “exacerbate conflict due to comparatively better income opportunities for young men in rebel groups as
opposed to labour markets.”[6] The concentration of armed conflict in lower income countries is also
reflected in the conflict tabulation by Project Ploughshares over the past quarter century. The 2009
Human Development Index ranks 182 countries in four categories of Human Development – Very High,
High, Medium, Low. Of the 98 countries in the Medium and Low categories of human development in
2009, 55 per cent experienced war on their territories in the previous 24 years. In the same period, only
24 per cent of countries in the High human development category saw war within their borders, while
just two (5 per cent) countries in the Very High human development ranking had war on their territory
(the UK re Northern Ireland and Israel). The wars of the recent past were overwhelmingly fought on the
territories of states at the low end of the human development scale. A country’s income level is thus a strong
indicator of its risk of being involved in sustained armed conflict. Low income countries lack the capacity to create
conditions conducive to serving the social, political, and economic welfare of their people. And when economic
inequality is linked to differences between identity groups, the correlation to armed conflict is even stronger . In
other words, group based inequalities are especially destabilizing.[7] These failures in human security are of
course heavily shaped by external factors, notably international economic and security conditions and the
interests of the major powers (in short, globalization),[8] and these factors frequently combine with internal
political/religious/ethnic circumstances that create conditions especially conducive to conflict and armed conflict.

Third, perception of declining trade ties wrecks interdependence—goes nuclear

Tønnesson 15
Stein Tønnesson, PhD from the University of Oslo, is research professor at the Peace Research Institute
Oslo(PRIO), adjunct professor at the Department of Peace and Conflict Research,Uppsala University
where he leads a six-year research programme on the East AsianPeace, associate editor for Asia in the
Journal of Peace Research, International Area Studies Review, 2015, Vol. 18(3), “Deterrence,
interdependence and Sino–US peace”, 297–311

In bipolar systems a state believing itself to be in decline is much more likely than a rising power to
initiate conflict: ‘rising states should want to avoid war while they are still rising, since by waiting they
can fight later with more power’ (Copeland, 2000: 2–3, 14, 20). Hence China and the US have a mutual
interest in preventing each other from fearing decline. Strong military powers who believe themselves
to be in decline (have negative trade expectations) are particularly dangerous (Copeland, 2000: 5, 13,
22, 237, 241, 244; Copeland, 2015: 429). Thus Beijing must be weary of tying itself up too closely with a
declining Russia and even more weary of American fears of decline.

Dynamic relational factors such as ‘potential power’ or ‘trade expectations’ are more important in
determining choice between war and peace than static factors, such as the actual level of trade, or a
state’s form of governance on the ‘unit level’ (Copeland, 2000: 235–236, 238, 245; Copeland, 2015: 12,
14, 27–50, 435–436). To the extent that unit level differences count, the character of the target state is
more important than that of the aggressor; while the liberal assumption that some kinds of regimes are
more likely to initiate war than others is wrong, it is true that some kinds of regimes are more likely to
be targetted than others.2 To avoid becoming a target it may help to be seen as predictable,
transparent, respectful of international law, and open to trade and investments.

In the conclusion to his exhaustive examination of how trade expectations have influenced various
decisions for war in the period 1790–1991, Copeland is optimistic about today’s prospects: ‘there are
strong reasons to believe that China will stay peacefully engaged in the system over the long term, at
least as long as the United States proves willing to maintain an open and free-flowing global economic
system’; ‘the reasons for optimistic economic expectations in both China and the United States should
outweigh the reasons for pessimism for at least a couple more decades’ (Copeland, 2015: 432, 444).
Chan’s and Copeland’s optimism depends on the continued success of globalization. If trade
expectations falter on any or both sides of the Pacific the unit-level economy-first policies may lose
their pacifying effect. Chan confirms that the dampening effect of economic inter-dependence on
conflict behaviour depends on policies of economic openness and integration. Hence there is need to
understand global financial politics, global trends and economic expectations in Beijing, Washington,
Tokyo and other East Asian capitals before assessing the likelihood that economic interdependence will
continue to ensure peace among major nuclear powers.
 2NC Yes Diversionary War
Diversion with Trump is highly likely
Healy 17
Gene Healy, vice president at the Cato Institute and author of "The Cult of the Presidency: America’s
Dangerous Devotion to Executive Power, 100 Days In, Trump Has Already Learned The Seductions Of
Foreign War, APRIL 28, 2017, http://thefederalist.com/2017/04/28/100-days-trump-already-learned-
seductions-foreign-war/

With his major initiatives stymied by Congress and the courts, President Trump has begun griping about
the media holding him to “the ridiculous standard of the first 100 days.” The good news for Trump is he
can argue for an extension: according to some of America’s preeminent “thought leaders,” he wasn’t
really president until he hit Syria with 59 Tomahawk missiles on April 6. “The Trump administration can
truly be said to have started only now,” exulted neoconservative foreign policy guru Elliot Abrams the
day after the airstrikes. “Donald Trump became the president of the United States [last night],” echoed
CNN’s Fareed Zakaria. It was “a big moment,” “a kind of education of Donald Trump,” Zakaria gushed:
Trump “realized [that] presidents don’t need to go to a pesky Congress every time they want military
force.” As a practical matter, Zakaria is right: perversely, it’s in the use of military force—the area where
presidents are most dangerous—where they now have the freest hand. The president can’t unilaterally
pass a tax cut or a new health-care plan, but say the word, and the missiles will fly. When he’s
showered in media accolades for doing so, it can make the resort to force particularly seductive. With
tensions rising on the Korean Peninsula, the Trump team has signaled it may be ready to unleash
another barrage, if it can just get our errant “armada” into position. Asked last Monday whether the
president was “prepared to act alone” against North Korea, White House press secretary Sean Spicer
replied they’d make sure Congress is “notified,” but “I think he’s going to utilize the powers under
Article II of the Constitution.” Now that’s presidential! War Abroad Distracts Americans from Home Our
Constitution’s framers had a far narrower view of the president’s powers, and envisioned a broader role
for that “pesky Congress” in matters of war and peace. As James Madison put it in 1793, “In no part of
the constitution is more wisdom to be found, than in the clause which confides the question of war or
peace to the legislature, and not to the executive department”; were it otherwise, “the trust and the
temptation would be too great for any one man.” There’s a good deal of political-science evidence
suggesting that the “temptation” Madison warned about is real. The “rally effect, “for “rally round the
flag,” describes the popularity boost presidents derive from international conflict: “Scholars have
repeatedly found short-lived spikes in US presidential approval following US uses of military force.” The
“diversionary war” hypothesis—the scholarly moniker for “Wag the Dog”—proposes that beleaguered
presidents may seek to distract the public by waging war abroad. Here, the evidence is more mixed. But
various studies have found that presidents are more likely to use force during periods of economic
stagnation, or high unemployment, and that “presidents resort to the sword more quickly when their
approval ratings decline.” Some presidents may be particularly susceptible to temptation: “More
conceptually simple leaders—particularly when high in distrust, a trait linked to more hawkish policy
inclinations—are significantly more likely to engage in diversion.” The Media Love War. Middle America,
Not So Much Whatever motivated Trump’s Syria strike, it seems to have given his dismal approval
ratings a nudge. Moreover, judging by the chorus of approval from American “opinion leaders,” the
president may have to rethink his view that the press is the “enemy of the American people.” On Syria,
media elites proved themselves far more likely to “rally round the flag” than will guys in trucker hats.
The “failing New York Times” greeted the airstrikes with the headline “On Syria Attack, Trump’s Heart
Came First.” He “did the right thing” was the common refrain from former critics, like the Times’
Nicholas Kristof, the humanitarian hawk Anne-Marie Slaughter, and neoconservative #NeverTrump-er
Bret Stephens. It’s no surprise that, as a senior White House official told the Washington Post’s David
Ignatius, “The decision to strike a Syrian air base was a confidence builder for an inexperienced and
sometimes fractious White House.” After all, “Trump couldn’t be sure when he launched the attack that
a Russian wouldn’t be killed, or that some other freak mishap wouldn’t arise.” We managed to dodge
the worst-case scenarios, but new dangers lie ahead. As Madison warned: in war, “laurels are to be
gathered, and it is the executive brow they are to encircle. The strongest passions and most dangerous
weaknesses of the human breast; ambition, avarice, vanity, the honourable or venial love of fame, are
all in conspiracy against the desire and duty of peace.” Two centuries later, our political culture has
degraded to the point where it encourages the worst presidential temptations—and we’ve made waging
war nearly as easy as firing off a tweet. If, per Fareed Zakaria, we’re witnessing the “education of Donald
Trump,” what lessons is he being taught?

Best studies prove our argument, and major power status doesn’t check
Howell 7
William G. Howell, Sydney Stein Professor in American Politics at the University of Chicago Harris School
of Public Policy and a professor in the Department of Political Science and the College, Jon C. Pevehouse,
While Dangers Gather: Congressional Checks on Presidential War Powers, p. 107, 2007

*Italics in original

The estimates associated with some of our control variables differ markedly from those previously
observed . Strikingly. Public Approval is now highly significant and negative,, suggesting that higher
approval ratings lead to longer response times.. It is odd that congressional support would hasten a
military response, while public support would appear to delay it. The finding, though, is consonant with
claims about diversionary war—that is, that heads of states occasionally use military force in order to
mute public criticisms about domestic problems.. Here. we find that presidents resort to the sword
more quickly when their approval ratings decline.62

Additionally, we find that Unemployment, Election Year and World Disputes all significantly influence the
timing of responses. Presidents appear much quicker on the draw when unemployment figures mount
and when they, or their successors, are facing an election; presidents tend to stall when other world
events compete for their attention. Though Major Power continues to register null results, Democracy
now appears as a powerful predictor in these event history models. Presidents, we find, take
considerably longer when responding militarily to opportunities in democracies than to those in
nondemocracies. Drawing on the logic of the democratic peace, this result makes sense, as democracies
are more likely to resolve their conflicts through peaceful methods.
Extinction
Street 16
Tim Street, Senior Programme Officer on the Sustainable Security programme at Oxford Research Group
and has worked for many years on the politics of nuclear disarmament and the arms trade, President
Trump: Successor to the Nuclear Throne, 30 November 2016,
http://www.oxfordresearchgroup.org.uk/publications/briefing_papers_and_reports/president_trump_s
uccessor_nuclear_throne

Donald Trump’s arrival in the White House as US President has deeply unnerved people from across the
political spectrum, both inside the US and around the world. The fact that many regard Trump as an
indecent individual and his government as potentially the number one threat to their dignity, liberty and
life means that the civil strife already raging in the US is unlikely to fade away soon. The wide-ranging
implications of Trump’s election to the most powerful office on Earth—for the peace and stability of
both that nation and the world—cannot be emphasised enough. In this regard, of the many
uncertainties and worries brought on by a Trump presidency, the two existential questions of climate
change and nuclear war stand out. With the former, Trump’s recent comment that he now has an ‘open
mind’ about the importance of the Paris climate agreement—having previously said climate change is a
‘hoax’—is unlikely to assuage fears that he will seek to dramatically expand the US’s extraction and
reliance on fossil fuels. With the latter, strong doubts have been raised over whether the new President
is capable of responsibly handling the incredible power that will be at his fingertips. Moreover, several
commentators are already raising concerns that a Trump administration will pursue policies that will
aggravate and disappoint his supporters, a situation that could increase the possibility of the US
engaging in a ‘diversionary’ war. In order to consider what we can expect from a Trump presidency, as
well as noting whom Trump empowers as members of his cabinet and those whom he draws on for
advice, it is vital to study the track record of recent administrations and appreciate the powers Trump
will inherit. In doing so this briefing focuses on the question of what a Trump presidency might mean for
international relations with a focus on nuclear arms, including doctrine and disarmament. This means
reviewing policies relevant to the US’s nuclear arsenal and pressing international challenges such as
non-proliferation, including in East Asia and the Middle East, as well as the US’s relationship with Russia
and its role in NATO. The power and responsibilities of the nuclear monarch The US President is solely
responsible for the decision to use the near-unimaginably destructive power of the nation’s nuclear
arsenal. Thus, as Bruce Blair—a former intercontinental ballistic missile launch control officer—makes
clear, ‘Trump will have the sole authority to launch nuclear weapons whenever he chooses with a single
phone call.’ The wider political meaning of the bomb for the world is aptly summarised by Daniel
Deudney, who describes nuclear weapons as ‘intrinsically despotic’ so that they have created ‘nuclear
monarchies’ in all nuclear-armed states. Deudney identifies three related reasons for this development:
‘the speed of nuclear use decisions; the concentration of nuclear use decision into the hands of one
individual; and the lack of accountability stemming from the inability of affected groups to have their
interests represented at the moment of nuclear use’. Similarly, Elaine Scarry has explained in stark terms
in her 2014 book Thermonuclear Monarchy: Choosing between Democracy and Doom, how the
possession of nuclear weapons has converted the US government into ‘a monarchic form of rule that
places all defense in the executive branch of government’ leaving the population ‘incapacitated’. In
response to this situation, Scarry argues that the American people must use the Constitution as a tool to
dismantle the US nuclear weapons system, thereby revitalising democratic participation and control
over decision-making. Scarry also outlines the incredible might the president wields, with each of the
US’s fourteen nuclear-armed submarines alone carrying ‘enough power to destroy the people of an
entire continent’, equivalent to ‘eight times the full-blast power expended by Allied and Axis countries in
World War II’. Nuclear specialist Hans Kristensen has described how the US’s strategic nuclear war plan
‘if unleashed in its full capacity’ could ‘kill hundreds of millions of people, devastate entire nations, and
cause climatic effects on a global scale’. This war plan consists of a ‘family of plans’ that is aimed at ‘six
potential adversaries’ whose identities are kept secret. Kristensen understands that they include
‘potentially hostile countries with nuclear, chemical, and biological weapons (WMD)’, meaning China,
North Korea, Iran, Russia and Syria as well as a terrorist group backed by a state that has conducted a
catastrophic WMD attack. The ‘dominant mission’ for US nuclear weapons within these plans is termed
counterforce, meaning strikes on ‘military, mostly nuclear, targets and the enemy’s leadership’. Despite
these plans, the US’s nuclear arsenal is often described by mainstream commentators as being solely
intended to ensure mutual assured destruction (MAD), i.e. as part of the ‘balance of terror’ with Russia,
in order to prevent armed conflict between the two nations and to ensure a response in kind to a
surprise nuclear attack. However, as Joseph Gerson and John Feffer explain, rather than deterrence just
being about enough nuclear forces surviving a surprise first strike attack to ensure MAD, US military
planners have also understood it to mean ‘preventing other nations from taking “courses of action” that
are inimical to US interests’. David McDonough thus describes the ‘long-standing goal of American
nuclear war-planners’ as being the achievement of the ability to launch a disarming first-strike against
an opponent- otherwise known as nuclear superiority. This has been magnified in recent years as the US
seeks to ‘prevent’ or ‘rollback’ the ability of weaker states—both nuclear and non-nuclear powers—to
establish or maintain a deterrence relationship. Taking all this into account, the new commander-in-
chief’s apparently volatile temperament thus raises deep concerns since his finger will be on the nuclear
trigger as soon as he assumes office on 20th January 2017. Given his past experience, Bruce Blair’s statement that he is ‘scared to death’ by the idea of a Trump presidency is but one further reason why urgent discussion and action, both in the US and globally, on lessening nuclear dangers—and reviving

disarmament—is vital. A recent report by the Ploughshares Fund on how the US can reduce its nuclear spending, reform its nuclear posture and restrain its nuclear war plans should thus be required reading in Washington. However, as the Economist has rightly noted, ‘It is not Mr Trump’s fault that the system, in which the vulnerable land-based missile force is kept on hair-trigger alert, is widely held to be inherently dangerous’ since, as they point out, ‘no former president, including Barack Obama, has done anything to change it.’ Over sixty years after the nuclear attacks
on Hiroshima and Nagasaki, nuclearism thus remains very much embedded in the nation’s strategic thinking. Yet the election of Obama, and the rhetoric of his 2009 Prague speech, in which he stated ‘America's commitment to seek the peace and security of a world without nuclear weapons’ led many to think that a real change was on the cards. Obama’s visit to Hiroshima earlier this year to commemorate the bombings was thus a painful reminder of how wide the gap is between the rearmament programmes that the US and other nuclear weapon states are engaged in
and the disarmament action that they are legally obliged to pursue under the nuclear non-proliferation treaty (NPT). Obama himself said in Japan that, ‘technological progress without an equivalent progress in human institutions can doom us. The scientific revolution that led to the splitting of an atom requires a moral revolution as well.’ For this statement to be meaningful it is necessary to identify who is responsible for the existing, highly dangerous state of affairs. In short, the US government’s recent record supports Scarry’s suggestion that a democratic revolution is
what, in reality, is most needed if the US is to make substantial progress on nuclear non-proliferation and disarmament. Short-term reforms towards the democratic control and ultimate dismantlement of the US’s nuclear arsenal have been outlined by Kennette Benedict, who writes that the next administration should: place our nuclear weapons on a much lower level of launch readiness, release to the public more information about the nuclear weapons in our own arsenals, include legislators and outside experts in its nuclear posture review and recognize Congress ’
authority to declare war as a prerequisite to any use of nuclear weapons. Assessing Obama’s nuclear legacy In order to properly appreciate what a Trump presidency may bring, we need to revisit the range and types of powers bequeathed to the commander-in-chief by previous administrations. Despite the military advances made by China and Russia in recent years, it is important to recognise that the US remains far and away the biggest global spender on conventional and nuclear weapons and plans to consolidate this position by maintaining significant technological
superiority over its adversaries, which will, as is well appreciated, push Beijing, Moscow—and thus other regional powers—to respond. Yet spending on nuclear weapons alone is set to pose significant budgeting difficulties for future US governments. According to a 2014 report by the James Martin Center, the Departments of Defense and Energy plan to spend approximately $1 trillion over the next 30 years ‘to maintain its current nuclear arsenal and procure a new generation of nuclear-armed or nuclear capable bombers and submarines’ as well as new submarine
launched ballistic missiles (SLBMs) and inter-continental ballistic missiles (ICBMs). Arms Control Today has found that total Defense Department nuclear spending ‘is projected to average more than $40 billion in constant fiscal year 2016 dollars between 2025 and 2035, when modernization costs are expected to peak’. Including costs for the Department of Energy’s National Nuclear Security Administration’s projected weapons-related spending during this period ‘would push average spending during this period to more than $50 billion per year’. If anywhere near these
sums are spent, then the modest reductions to the US’s nuclear stockpile achieved during the Obama presidency will be entirely overshadowed. Moreover, as analyst Andrew Lichterman notes, the US’s continued modernisation of its nuclear forces is ‘inherently incompatible’ with the ‘unequivocal undertaking’ given at the 2000 NPT Review Conference to eliminate its nuclear arsenal and apply the ‘principle of irreversibility’ to this and related actions. For Lichterman, the huge outlay s committed to the nuclear weapons complex were part of a political ‘bargain’ made by
the Obama administration with Republicans. This ensured that the New START nuclear arms control treaty would pass in the Senate whilst also not disturbing the development of missile defense and other advanced conventional weapons programmes. New START is a bilateral agreement between Russia and the US, which Steven Pifer describes as ‘one of the few bright spots’ that exists in these nations’ relationship. Under the treaty Moscow and Washington must, by 2018, reduce their stockpile of operationally deployed strategic nuclear warheads to 1,550. Furthermore,
both must keep to a limit of 700 deployed strategic launchers (missiles) and heavy bombers, and to a combined limit of 800 deployed and non-deployed strategic launchers and heavy bombers. Despite New START ‘proceeding smoothly’ according to Pifer, Hans Kristensen recently produced a report comparing Obama’s record with that of the previous presidents holding office during the nuclear age, which found that, hitherto, Obama has cut fewer warheads—in terms of numbers rather than percentages—than ‘any administration ever’ and that ‘the biggest nuclear
disarmers’ in recent decades have been Republicans, not Democrats. Kristensen thus drily observes of this situation that, a conservative Congress does not complain when Republican presidents reduce the stockpile, only when Democratic president try to do so. As a result of the opposition, the United States is now stuck with a larger and more expensive nuclear arsenal than had Congress agreed to significant reductions. As his presidency draws to a close, presumably as a means of securing some sort of meaningful legacy in this area, it has been reported that Obama
considered adopting a no first use (NFU) policy for nuclear weapons, something which, whilst reversible, could act as a restraint on future presidents. Yet this was apparently abandoned, according to the New York Times, after ‘top national security advisers argued that it could undermine allies and embolden Russia and China’. Furthermore, according to Josh Rogin of the Washington Post, the governments of Japan, South Korea, France and Britain all privately communicated their concerns about Washington adopting NFU. Defense Secretary Ashton Carter is also said to
have argued that such a move would be unwise because ‘if North Korea used biological weapons against the South the United States might need the option of threatening a nuclear response’. However, as Daryll Kimball explains, the US’s ‘overwhelming’ conventional military advantage means that ‘there is no plausible circumstance that could justify—legally, morally, or militarily—the use of nuclear weapons to deal with a non-nuclear threat’. Such resistance to NFU is thus deeply disappointing given that, as Kimball goes on to note, this move would go some way to
reassuring China and Russia about the US’s strategic intentions. It would also be an important confidence-building measure for the wider community of non-nuclear weapon states, showing that the US is willing to act in 'good faith' towards its disarmament obligations under the NPT. Thinking about the causes of proliferation more widely requires us to understand what drives weaker states to seek deterrents, if their reliance on them is to be reduced. For example, as Dr Alan J. Kuperman observes, NATO’s bombing and overthrow of Libyan leader Muammar Gaddafi in
2011 ‘greatly complicated the task of persuading other states such as Iran and North Korea ‘to halt or reverse their nuclear programs’. The lesson Tehran and Pyongyang took is thus that because Gaddafi had voluntarily ended his nuclear and chemical weapons programmes, the West now felt free to pursue regime change. When assessing the importance of the Iran nuclear deal, which is often hailed as one of Obama’s landmark achievements, and which the next President must not be allowed to derail, it is thus important also to consider carefully what behaviour by the
most powerful states will enable existing or potential nuclear possessors to embrace disarmament and reduce their interest in seeking non-conventional deterrents. The inability of Washington to make substantial progress towards reducing the salience of nuclear weapons at home and abroad is all the more noteworthy when one considers the state of US and Russian public opinion on nuclear arms control and disarmament. As John Steinbrunner and Nancy Gallagher observe, ‘responses to detailed questions reveal a striking disparity between what U.S. and Russian
leaders are doing and what their publics desire’. For example, their polling found that: At the most fundamental level, the vast majority of Americans and Russians think that nuclear weapons have a very limited role in current security circumstances and believe that their only legitimate purpose is to deter nuclear attack. It is highly consistent, then, that the publics in both countries would favor eliminating all nuclear weapons if this action could be taken under effective international verification. Another important m easure which the US has failed to hitherto ratify is the
Comprehensive Test Ban Treaty (CTBT). This is despite President Obama stating in 2009 that he intended to pursue Senate ratification of the treaty ‘immediately and aggressively’. Once more, there is notably strong public support–82% according to a 2010 poll by the Chicago Council on Global Affairs—for the US joining the CTBT but, again, the Republican-controlled Senate has blocked the treaty at every opportunity. Overall, the gap between the public’s will and the government’s inaction on nuclear issues is alarming and redolent of the wider democratic deficit in the US.
On a more positive note, the fact that the citizenry supports such measures suggests that groups advocating arms control and disarmament initiatives should continue to engage with and understand the public’s positions in order to effectively harness their support. Stepping back from the brink In terms of priorities for the incoming administration in the US, stepping back from military confrontation with Russia and pushing the threat of nuclear war to the margins must be at the top of the list. Whilst much has been made of a potential rapprochement between Trump and
Putin, the two have, reportedly, only just spoken for the first time on the phone and still need to actually meet in person to discuss strategic issues and deal with inevitable international events and crises, including in relation to Ukraine and Syria. As of now, whilst the mood music from both sides might suggest a warming of relations, as has been seen with previous administrations, unless cooperation is rooted in a real willingness to resolve problems (which for Russia includes US ballistic missile defense deployments in Eastern Europe and NATO expansion) then tensions
can quickly re-emerge. Another related question concerns how Trump will conduct himself during any potential crisis or conflict with Russia or another major power, given the stakes and risks involved, as highlighted above. Whilst we must wait to find out precisely what the new administration’s approach to international affairs will be, in the past week, NATO’s Secretary General Jens Stoltenberg told the BBC that he had been personally informed by Donald Trump, following the election, that the US remains ‘strongly committed to NATO, and that the security guarantees
to Europe stand’. Trump had previously shaken sections of the defence and foreign policy establishment by suggesting that NATO was ‘obsolete’ and that countries such as Japan (and by extension others such as South Korea and Saudi Arabia) ‘have to pay us or we have to let them protect themselves’, which could include them acquiring the bomb. One reason why some in Washington have, in the past, not wanted their regional allies to develop their own nuclear weapons is because the US might then become dragged into an escalating conflict. Moreover, if an ally in one
region seeks the bomb, this may cause others elsewhere to pursue their own capabilities- an act of strategic independence that might make these states harder to influence and control. The US’s key relationships in East Asia and the Middle East illustrate why, if a future US President wishes to take meaningful moves towards a world free of nuclear weapons, then developing alternative regional political agreements, including strategic cooperation with China and Russia, will be necessary. As Nancy Gallagher rightly notes, the ‘weaknesses of existing international

As well as mapping out

organizations’ thus requires ‘more inclusive, cooperative security institutions’ to be constructed regionally ‘to complement and someday, perhaps, to replace exclusive military alliances’, alongside progressive demilitarisation. Such confidence-building measures would also support efforts to halt missile and nuclear tests by states such as North Korea, which may soon be capable of striking the US mainland. Imagining the next enemy

the US’s current nuclear weapons policies and its regional relationships, it is important to reflect upon
how domestic political dynamics under a Trump presidency might drive Washington’s behaviour
internationally, particularly given the nuclear shadow that always hangs over conflicts involving the US.
For example, in the near-term, Trump’s economic plan and the great expectations amongst the
American working class that have been generated, may have particularly dangerous consequences if, as
seems likely, the primary beneficiaries are the very wealthy. Reviewing Trump’s economic plans, Martin
Wolf of the Financial Times concludes that ‘the longer-term consequences are likely to be grim, not least
for his angry, but fooled, supporters. Next time, they might be even angrier. Where that might lead is
terrifying’. Gillian Tett has also highlighted the ‘real risks’ that Trump’s policies could ‘spark US social
unrest or geopolitical uncertainty’. Elsewhere, George Monbiot in the Guardian, makes the stark
assertion that the inability of the US and other governments to respond effectively to public anger
means he now believes that ‘we will see war between the major powers within my lifetime’. If these
warnings weren’t troubling enough, no less a figure than Henry Kissinger argued on BBC’s Newsnight
that ‘the more likely reaction’ to a Trump presidency from terror groups ‘will be to do something that
evokes a reaction’ from Washington in order to ‘widen the split’ between it and Europe and damage the
US’s image around the world. Given that Trump has already vowed to ‘bomb the shit out of ISIS’ and
refused to rule out the use of nuclear weapons against the group, it goes without saying that such a
scenario could have the gravest consequences and must be avoided so that the US does not play into
the terrorists’ hands. Looking more widely, President-elect Trump’s existing and potential cabinet
appointments, which Glenn Greenwald has summarised as ‘empowering…by and large…the traditional,
hard, hawkish right-wing members of the Republican Party’ also point to the US engaging in future
overseas conflicts, rather than the isolationism which many in the foreign policy establishment criticised
Trump for proposing during the presidential campaign. William Hartung and Todd Harrison have drawn
attention to the fact that defence spending under Trump could be almost $1trillion (spread over ten
years) more than Obama’s most recent budget request. Such projections, alongside Trump’s election
rhetoric, suggest that the new nuclear monarch will try to push wide open the door to more spending on
nuclear weapons and missile defense, a situation made possible, as we have seen, by Obama’s inability
to implement progressive change in this area at a time of persistent Republican obstruction. Conclusion
The problem now, for the US and the world, is that if Trump does make good on his campaign promises
then this will have several damaging consequences for international peace and security and that if
Trump does not sufficiently satisfy his supporters then this will likely pour fuel on the flames at home,
which may then quickly spread abroad. The people of the US and the world thus now have a huge
responsibility to act as a restraining influence and ensure that the US retains an accountable,
transparent and democratic government. This responsibility will only grow if crises or shocks take place
in or outside the US which ambitious and extremist figures take advantage of, framing them as threats
to national security in order to protect their interests and power. If such scenarios emerge the next
administration and its untried and untested President will find themselves with a range of extremely
powerful tools and institutional experience at their disposal, including nuclear weapons, which may
prove too tempting to resist when figuring out how to respond to widespread anger, confusion and
unrest, both at home and abroad. If we want to look for evidence supporting a belief in more hopeful
possible outcomes, we may recall that during the election campaign, Trump had said, on the highly
controversial topic of immigration, that ‘everything is negotiable’. The next President’s opportunistic
and transactional approach and the potential for a new opening with Russia could thus still provide a
way of stepping back from the brink. Yet any warming of relations between the US and other major
powers must go hand-in-hand with significant restraint when it comes to conventional and nuclear
weapons policy to properly signal a shift away from offensive unilateralism and towards common
security.

Empirical support and Trump makes it likely—specifically, North Korea is a tempting

target
Tierney 6/15
DOMINIC TIERNEY, associate professor of political science, a senior fellow at the Foreign Policy Research
Institute, and a contributing writer at The Atlantic, The Risks of Foreign Policy as Political Distraction,
JUN 15, 2017, https://www.theatlantic.com/international/archive/2017/06/trump-diversionary-foreign-
policy/530079/

The Risks of Foreign Policy as Political Distraction World leaders have often been tempted to divert
attention from problems at home with projects abroad. If you’re an embattled head of state, deflecting
criticism through foreign adventure carries seductive appeal: Outside threats can cause people to pull
together. As King Henry IV advises his son Hal, the future king, in Shakespeare’s Henry IV, Part 2: busy
giddy minds With foreign quarrels; that action, hence borne out, May waste the memory of the former
days. What better way to patch over domestic discord than to take on a common enemy? In the real
world, many historians interpret the Crimean War of 1853-1856 as an effort by French Emperor Louis
Napoleon to buttress his support among French Catholics by fighting the Orthodox Russians. Karl Marx
wrote that the emperor “has no alternative left but revolution at home or war abroad.” In 1857,
President James Buchanan sent troops to reassert federal control over the Mormon regime in Utah, and
in the words of one confidant, drown out “the pipings of Abolitionism” with the “almost universal
excitement of an Anti-Mormon Crusade.” Shortly after the outbreak of the Russo-Japanese War in 1904,
the Russian minister of the interior said: “We need a little, victorious war to stem [the tide of]
revolution.” RELATED STORY General H.R. McMaster with President Trump Trump Is Destroying His Own
Administration's Policies In the summer of 1998, at the height of the Monica Lewinsky scandal, Bill
Clinton confessed on television that his romantic relationship with a White House intern amounted to “a
critical lapse in judgment … a personal failure.” Three days later, with his presidency hanging in the
balance, the administration announced airstrikes against suspected terrorist sites in Sudan and
Afghanistan, following the bombing of U.S. embassies in Kenya and Tanzania. Many observers claimed
that Clinton had launched a classic diversionary war, or a use of force to sidetrack the media, whip up
patriotic sentiment, and boost approval ratings. One journalist asked Secretary of Defense William
Cohen if he had seen the 1997 movie Wag the Dog, in which the White House fabricates a war to
distract attention from the president’s dalliance with a young girl. Cohen said the only goal of the
strikes, “was our absolute obligation to protect the American people from terrorist activities.” Today,
some critics claim that Donald Trump will adopt a version of the Wag the Dog strategy, and launch an
actual major conflict to deflect attention from the growing Russia scandal. In the Daily Beast, Michael
Tomasky outlined a number of dangerous scenarios for a “caged and cornered animal” like Trump, the
first being that he “tries to start a war,” perhaps against North Korea. Distraction is indeed at the core of
Trump’s foreign policy—but its role is far more subtle and broadly applied. At present, the Trump
administration finds itself caught in just the sort of storm of circumstance that could lure it into a
diversionary foreign policy. Trump certainly has a motive to busy giddy minds, given the FBI’s
investigation into collusion between his campaign and Russia, as well as approval ratings mired in the
30s. Because the president of the United States has a relatively free hand to use force, Trump also has
the opportunity to divert attention. (The White House can’t impose its will on healthcare, but it can
unilaterally launch airstrikes.) In addition, Trump has an unparalleled capacity to dominate the news. He
may be the most famous person ever to stroll the earth, or at least ride a golf cart. In January, by one
account, Trump received more media coverage than the next 1,000-most famous people put together.
On top of this, distraction has been a staple of Trump’s political strategy since he declared his intention
to run for president. When negative stories arise, his instinct is to seize the narrative with bold, even
outlandish, claims—accusing Barack Obama of wiretapping the phones in Trump Tower, for example. If
the diversion sets off another firestorm, the solution is further deflection, like a magician whose first
trick goes up in smoke and then immediately begins performing a new illusion. Trump has the flexibility
to pursue a diversionary foreign policy because he lacks a clear diplomatic doctrine. In some policy
areas, such trade and immigration, he has been consistent. But his positions on issues of war and peace
have been highly mutable—he was for the Iraq war and then against it, pro-intervention in Libya before
opposing this course of action, and largely indecipherable on Afghanistan. This gives him greater latitude
to deploy smoke and mirrors when opportunities arise. What are the core elements of a diversionary
foreign policy? First of all, diplomatic moves should be attention-grabbing, symbolic, and popular,
particularly among the base. The smartest diversionary actions also have some substantive merit,
precisely so the true agenda is harder to spot. After all, giddy minds shouldn’t know they’ve been
busied. Ultimately, it’s not what the foreign policy does that matters, but what people think it does: the
myths it creates, the stories it weaves, the narratives it reinforces. In Trump’s case, the tale is one of
dark enemies and unscrupulous allies. His diplomacy seeks to establish a narrative of America First, a
commitment to protect the U.S. homeland even if—or especially if—it irritates global elites. Seen
through this lens, much of Trump’s behavior seems designed to distract, however clumsily. Just consider
the diversionary tweets. The president has repeatedly picked fights for his own political benefit by, for
example, criticizing London mayor Sadiq Khan and taking his words out of context to make him appear
weak on terrorism. Trump may see Khan, a foreign Muslim, as an ideal foil given the embrace of anti-
Muslim attitudes among some in the Republican party. And then there’s Trump’s diversionary staging.
When he decided to withdraw America from the Paris climate deal, he could have given other nations
maximum lead time to help them handle the fallout. Instead, he hyped up his forthcoming
announcement, leading to frenzied debate about whether the United States would stay or go, as if his
sole concern was to boost ratings on a reality television show. But what about military force? To be
clear, there is little cause to speculate that Trump plans to launch a full-scale war solely to distract
attention. For one thing, as president, the worst possible time to start a major military campaign is when
you’re deeply unpopular. And the political upside is shaky at best. Recent big wars in Afghanistan and
Iraq were politically damaging to George W. Bush. Even victory doesn’t guarantee a pay-off, as George
H. W. Bush discovered when he won the 1991 Gulf War and then lost his bid for reelection in 1992. A
crisis may arise where there are real national-security rationales for fighting, along with potential
domestic gains. Here, the payoff at home would likely enter Trump’s calculus, and even push him over
the edge to fight, with the legitimate casus belli providing a shield of plausible deniability. The most
tempting use of force may be a seemingly manageable, but still dazzling, kinetic operation, like a missile
strike or a raid to kill terrorist leaders. Another option would be to escalate a crisis where an easy win
seems available: The key is to find the right enemy, one that’s both widely hated and too weak to fight
back. After all, there’s a well-established “rally ‘round the flag” effect, where almost any military crisis
temporarily juices the president’s approval ratings. In the wake of Clinton’s airstrikes in 1998, one poll
found that 68 percent of Americans approved of his foreign policy. Republican House Speaker Newt
Gingrich said, “it was the right thing to do at the right time.” In a hyper-partisan era like today, military
operations offer one of the few avenues by which Trump could win backing from both sides of the aisle.
In April, the White House launched airstrikes against the Syrian regime, following its use of chemical
weapons, and won praise from Republicans and Democrats alike. Trump’s sudden decision to attack
Damascus, after years of railing against such a move, struck many as suspicious, or, in Philip Gordon’s
words, “yet another effort by the president to distract the media’s attention and change the subject
from his problems at home.” But diversionary uses of force are highly risky, and can just as easily
exacerbate domestic problems. In 1982, the military regime in Argentina invaded the British Falkland
Islands in a bid to overcome its deep unpopularity at home. U.S. Secretary of State Alexander Haig later
wrote that there “was a widespread impression that the junta was creating a foreign distraction to give
itself a respite from domestic economic problems, including severe inflation.” Crucially, the regime
never intended to wage a war. Buenos Aires was certain that Britain wouldn’t fight for a few islands
8,000 miles away. But Margaret Thatcher was indeed ready for a fight; Argentina lost the war, and the
junta was soon kicked out of office. The benefits of a diversionary foreign policy rarely last. A president
may win a news cycle or two, but then people move on. In 1998, Clinton received a short-term political
boost from the airstrikes, but the House of Representatives still went ahead and voted to issue Articles
of Impeachment. The strikes in Afghanistan failed to kill Osama Bin Laden, and may have brought the
Taliban and al Qaeda closer together. The real victor was Wag the Dog’s production house, Baltimore
Pictures: In the wake of the U.S. attack, video rentals of the movie skyrocketed. In the end, diversion is a
fool’s errand, offering fleeting political benefit and inviting very real risks. It’s no substitute for a foreign
policy based on protecting national interests and values. Of course, the attraction of a risky wager
depends on how weak a president is, domestically. If Trump is looking at near-inevitable removal from
office, either at the ballot box or via impeachment, then gambling for resurrection through military
action may be tempting even if the odds of success are low. He has nothing to lose—although American
soldiers might.

Extinction
Smith 17
Reiss Smith, reporter citing Gen. Walter Sharp (ret.), former Commander—USFK and ROK-US CFC, 4 star
general in the US Army, North Korea nuclear weapons: How many tests has Kim Jong-un conducted?,
April 12, 2017, http://www.express.co.uk/news/world/708896/north-korea-nuclear-tests-explained-
how-many-largest-kim-jong-un

Will Kim Jong-un spark World War Three? The latest nuclear test has added yet more tension to North
Korea’s fraught relationship with the US, and raised fears that World War Three is looming. Recently, a
shocking piece of propaganda revealed that children in North Korean schools are being prepared for a
“new world war” that would bring “doom” to the country’s enemies. A high-ranking US official has
predicted that Kim Jong-un could soon declare an assault on the US, amid harsh sanctions and growing
dissatisfaction among his population. General Walter Sharp said any attacks would “quickly escalate
into a much bigger conflict” and bring all-out war to the West. It is believed that North Korea now has
the ability to fire nuclear missiles with a large enough range to reach the US. A nuclear war could result
in the global population being reduced by 45% as temperatures drop by up to 30% – approaching Ice
Age levels. Nuclear Darkness predict that World War Three could even trigger a mass extinction event,
similar to the one which wiped out dinosaurs 65 million years ago.
 2NC US Key Global
US growth now is k2 solve global crisis
Lachman 16

Desmond Lachman is a resident fellow at the American Enterprise Institute, The Detroit News, August
18, 2016, “The world needs U.S. economic leadership”,
http://www.detroitnews.com/story/opinion/2016/08/18/economic-leadership/88982778/

In assessing U.S. economic prospects beyond November’s election, it bears emphasizing how
precarious the state of the global economy appears to be. While the U.S. economy might be
reasonably healthy, the rest of the world is decidedly not. This would underline the need for steady
U.S. world economic leadership . It would also argue strongly against any U.S. action that might
hasten the move to beggar-thy-neighbor policies around the world that would be detrimental to both
U.S. and global economic prosperity.

A striking feature of today’s global economic landscape is the many weaknesses in the world’s major
economies. In Europe, following the Brexit vote, the U nited K ingdom’s economy is likely to be beset
by many years of investor uncertainty as it renegotiates its complex relationship with Europe.

Meanwhile Italy, the Eurozone’s third-largest economy, is having to cope with major difficulties in its
banking system, the over-indebtedness of its government, and growing public antipathy to the Euro.
This is all the more serious considering that Italy will hold a constitutional referendum later this year,
which could see a fall in the government. It also must be of concern that, unlike Greece, Italy is simply
too big for Europe to save should it face an economic and political meltdown.

In Asia, Japan’s over-indebted economy is again flirting with both deflation and economic recession,
while the Chinese economy is struggling to make the transition away from an investment- and export-
led economy to one led by consumption and the service sector. At the same time, major emerging
market economies like Brazil, Russia and South Africa are all having to cope with depressed
international commodity prices and with excessive corporate U.S. dollar indebtedness.

Further clouding the global economic outlook is the fact that the world is now drowning in debt. Indeed,
a recent McKinsey Global Institute study found that private and public sector debt levels around the
world today are very much higher than they were in 2008 on the eve of the Great Economic Recession.
This makes it all the more important that the world economy is not hit by a renewed shock that
might cause the world economy to falter and that would make the repayment of that debt all the
more difficult.

It is against this troubled background that one would think that the last thing that the world economy
needs right now is a period of investor uncertainty in the U nited S tates, the world’s largest
economy . Yet that is very well what could happen if the presidential candidates continue to outbid
themselves on tax giveaways and lavish public spending promises that might compromise the country’s
public finances.
 AT: Econ Resilient
Economy uniquely vulnerable to small shocks now—leads to larger downturn
Irwin, 16
(Economics Correspondent-Uphot at The New York Times, Will the Next President Face a Recession?
Don’t Assume So, 10/27, http://www.nytimes.com/2016/10/28/upshot/will-the-next-president-face-a-
recession-dont-assume-so.html]

There is a decent argument that the United States economy is more susceptible to recession now than it
has been for most of the last several decades, for two reasons. First, growth has been around 2 percent
a year, below the 3 to 4 percent that was commonplace in the second half of the 20th century. That
means there is less of a growth cushion. It takes a smaller negative shock to pull the economy into
contraction territory. Second, the Fed may find itself with less room to reduce the damage of the next
downturn. In modern recessions, the central bank has cut rates by an average of 5.5 percent, according
to research by the Fed economist David Reifschneider. With rates below 0.5 percent and on track to rise
very slowly, any small shock in the next few years could cause major economic damage, especially if
the Fed’s less conventional monetary policy tools either go unused or don’t prove effective.

Confidence crisis triggers global collapse

Lachman 16
Desmond Lachman is a resident fellow at the American Enterprise Institute, The Detroit News, August
18, 2016, “The world needs U.S. economic leadership”,
http://www.detroitnews.com/story/opinion/2016/08/18/economic-leadership/88982778/

In assessing U.S. economic prospects beyond November’s election, it bears emphasizing how precarious
the state of the global economy appears to be. While the U.S. economy might be reasonably healthy,
the rest of the world is decidedly not. This would underline the need for steady U.S. world economic
leadership. It would also argue strongly against any U.S. action that might hasten the move to beggar-
thy-neighbor policies around the world that would be detrimental to both U.S. and global economic
prosperity. A striking feature of today’s global economic landscape is the many weaknesses in the
world’s major economies. In Europe, following the Brexit vote, the United Kingdom’s economy is likely
to be beset by many years of investor uncertainty as it renegotiates its complex relationship with
Europe. Meanwhile Italy, the Eurozone’s third-largest economy, is having to cope with major difficulties
in its banking system, the over-indebtedness of its government, and growing public antipathy to the
Euro. This is all the more serious considering that Italy will hold a constitutional referendum later this
year, which could see a fall in the government. It also must be of concern that, unlike Greece, Italy is
simply too big for Europe to save should it face an economic and political meltdown. In Asia, Japan’s
over-indebted economy is again flirting with both deflation and economic recession, while the Chinese
economy is struggling to make the transition away from an investment- and export-led economy to one
led by consumption and the service sector. At the same time, major emerging market economies like
Brazil, Russia and South Africa are all having to cope with depressed international commodity prices and
with excessive corporate U.S. dollar indebtedness. Further clouding the global economic outlook is the
fact that the world is now drowning in debt. Indeed, a recent McKinsey Global Institute study found
that private and public sector debt levels around the world today are very much higher than they were
in 2008 on the eve of the Great Economic Recession. This makes it all the more important that the
world economy is not hit by a renewed shock that might cause the world economy to falter and that
would make the repayment of that debt all the more difficult. It is against this troubled background
that one would think that the last thing that the world economy needs right now is a period of investor
uncertainty in the United States, the world’s largest economy. Yet that is very well what could happen
if the presidential candidates continue to outbid themselves on tax giveaways and lavish public spending
promises that might compromise the country’s public finances.

Econ’s fragile---their indicators are wrong and don’t translate into real strength
Hansen 16
Steven Hansen, international business and industrial consultant, 3-26-2016, “The Economy Keeps
Stumbling Along”, Seeking Alpha, http://seekingalpha.com/article/3961069-economy-keeps-stumbling-
along
Once a month, I assemble an economic forecast based on analysis of various data points which have led the economy. Historically, most of the
time the economy trends up or trends down - but recently
the economy simply has been frozen with little change in
the rate of growth. My view of the economy is at Main Street level - not necessarily GDP. My position is that GDP has
disconnected from the real economy. A thinking person might say that GDP never projected the real economy - and it was never
more obvious with the current situation where rate of change of growth slowed to a crawl. The jumping around of GDP in a flat economy is
noticeable. We will be releasing our
economic forecast next week - and conditions have been flat (near the zero
growth line) for three months . All indicators I view outside the elements of our forecast are mixed and confused.
Nothing is strong . One of my favorite indicators to understand if the rate of economic growth is accelerating or
decelerating is the relationship between the year-over-year growth rate of non-farm private employment and the year-
over-year real growth rate of retail sales. This index is currently showing no growth differential . When retail sales
grow faster than the rate of employment gains (above zero on the below graph) - the rate of growth of the economy is
usually accelerating.
 AT: Durable/Trade Ties Check
Economic interdependence can’t solve war, because history proves the restraining
factor is all about the expectation of future trade – security crises and Trump both
moot that
Fay 3/20
Matthew Fay, Director of Defense and Foreign Policy Studies—Niskanen Center, Fellow—GMU Center
for Security Policy Studies, PhD—GMU Schar School of Policy and Government, bachelor’s degree in
political science from Saint Xavier University and has two master’s degrees, one in international
relations from American Military University and one in diplomatic history from Temple University,
TRUMP, TRADE, AND GREAT POWER WAR, MARCH 20, 2017, https://niskanencenter.org/blog/trump-
trade-great-power-war/

One of the signature features of President Donald Trump’s campaign was his hostility to free trade.
Then-candidate Trump repeatedly denigrated various multilateral trade pacts as bad deals for the
United States. Pulling out of the Trans-Pacific Partnership, appointing opponents of free trade—such as
Steve Bannon and Peter Navarro—into key positions, and promises of tariffs that are likely to produce
retaliatory measures, all demonstrated that Trump was planning on following through on his
protectionist campaign rhetoric. While Trump’s attack on free trade has important implications for
American and global economies, it will also have an impact on the likelihood of war between the great
powers. As discussed here previously, President Trump sees the world in zero sum terms. Absent
disproportionate economic gains for the United States, international agreements cannot be considered
successful. However beneficial such arrangements prove to be for all involved, Trump’s mercantilist
outlook sees them as a raw deal for Americans. It is not surprising therefore, that U.S. Treasury
Secretary Steve Mnuchin nixed attempts to include language supporting free trade in a statement from
a G-20 meeting in Baden-Baden, Germany. As CNN reported, while the statement included some
positive words on trade, “conspicuous by its absence was the phrase ‘we will resist all forms of
protectionism’ that was contained in the communiqué from the last meeting of the group in China, July
2016.” Mnuchin rejected the idea that the omission was meaningful, but the unwillingness to reaffirm
American opposition to protectionism ignores that trade provides benefits beyond the global economy.
Specifically, the expectation of future trade affects the likelihood of war and peace. The connection
between trade and conflict has never been as simple as early liberal theorists suggested. The idea,
wrongly attributed to the nineteenth century French economist Frederic Bastiat, that “when goods don’t
cross borders, soldiers will” still offers a good summation of the longstanding position that trade has
pacifying effects on international politics. The logic behind the argument is compelling: the greater the
extent of commercial relations between states, the less likely there will be conflict because the
economic cost of war (and the lost benefits of trade) will be too high. However, history has shown that
states still sometimes go to war despite high levels of economic interdependence at the time of the
conflict. In his book Economic Interdependence and War, political scientist Dale Copeland explained that
it is not the current level of trade that is important to the likelihood of conflict. Rather, Copeland
argues, it is the expectation of future trade that determines a state’s willingness to go to war. He writes,
In a very real way, it does not matter in the least whether past and current levels of trade and
investment have been low, as long as leaders have strongly positive expectations of for the future. It is
their future orientation and expectations of a future stream of benefits that will likely make the leaders
incline to peace. Likewise, it does not matter whether past and current levels of commerce have been
high if leaders believe they are going to be cut off tomorrow or in the near future. It is their pessimism
about the future that will probably drive these leaders to consider hard-line measures and even war to
safeguard the long-term security of the state. Multilateral trade has been a feature of the liberal
international order developed after World War II for a reason. Postwar policymakers feared a return to
the closed economic blocs of the 1930s that helped drive the world to war. It is entirely possible that the
norms in favor of free trade are robust enough to withstand the absence of routine language from a
statement by a meeting of the world’s finance ministers. But groups like the G-20 help set expectations
about the future. Given the connection between those expectations and conflict, failing to reaffirm
America’s opposition to protectionism could put the world on a dangerous path.
Aff
 2AC Thumpers
High cyclical recession risk, but it’s unpredictable and *certainly* not monocausal –
means no uniqueness or internal link, and the DA is silly anti-intellectual white noise
Wessel 12/26
David Wessel, Senior fellow in Economic Studies at Brookings and director of the Hutchins Center on
Fiscal and Monetary Policy—Brookings Institution, What to expect from the US economy in 2018,
12/26/17, Brookings, https://www.brookings.edu/blog/up-front/2017/12/26/what-to-expect-from-the-
us-economy-in-2018/?utm_medium=social&utm_source=twitter&utm_campaign=es

In any year, there’s about a 20 percent chance of recession—and recessions are hard, most impossible,
to predict. So what could go wrong? The Fed could be spooked by inflation and lift interest rates more
rapidly than anticipated, slowing the economy and unsettling financial markets. We might see a
confidence-shattering drop in stock price—or see a big bank get into trouble and learn that all the seat
belts and air bags we added to the financial system were inadequate. Something could go awry
overseas—in China, perhaps. Trump’s tough talk on trade could disrupt global supply chains or frighten
away business investment.

And there are clouds on the long-term horizon. The growth of productivity—the amount of stuff we
produce for each hour of work—is distressing low. That’ll slow the improvement in wages and living
standards. We continue to run up the federal debt. That’s not an immediate problem, but at some point
it will become one; a faster growing economy will help, but won’t suffice. The inequality gap between
the very best off Americans and the rest of us continues to widen. And the opioid crisis is killing people:
More people died of drug overdoses in the U.S. in 2016 than died in the entire Vietnam War.

So many thumpers
Shaw 1/2
Jessica Marmor Shaw, What should investors worry about in 2018? Here’s a big, fat list of risk factors: A
bitcoin crash, the end of easy money, Nafta talks and more things to keep you up at night, Jan 2, 2018,
https://www.marketwatch.com/story/what-should-investors-worry-about-in-2018-heres-a-big-fat-list-
of-risk-factors-2017-12-28

What should investors worry about in 2018? Here’s a big, fat list of risk factors: A bitcoin crash, the
end of easy money, Nafta talks and more things to keep you up at night

Worried about what to worry about in 2018?

We’ve published dozens of articles on the subject in the past several months, with advice from analysts,
calls from prominent traders and other analyses of the subjects keeping investors, and MarketWatch’s
editorial team, awake at night. Here, we bring all those worries and watchers to you, in a single, big, fat
list.
Call it the ultimate New Year’s reading list for the concerned investor hiding inside each of us, after a
2017 in which the Dow DJIA, +0.42% broke a record for breaking records, the S&P 500 SPX, +0.83%
rallied 20% and nothing seemed to get investors down for long.

Bitcoin crash

A bitcoin bubble pop was the top worry in our Twitter poll heading into the New Year’s weekend --
though it flipped to “geopolitical risk” by the time the poll was done. (Maybe because of this?)

MarketWatch

What should investors be most worried about in 2018?

12:16 PM - Dec 28, 2017

16%Record corporate debt

30%Bitcoin crash

32%Geopolitical risk

22%End of easy-money policy

2,276 votes • Final results

There’s been much debate on the effect that an unraveling in cryptocurrencies, particularly bitcoin
BTCUSD, +1.37% , would have on the stock market, with some arguing that the answer is a lot, and
some saying no effect at all. In any case, with bitcoin now a household name and a frequent headliner in
the financial media, there will be no shortage of action in the crypto space in the year ahead.

End of easy-money policies

“We’ve never had QE like this before, [and] we’ve never had unwinding like this before. Obviously that
should say something to you about the risk that might mean, because we’ve never lived with it before.”

That was J.P. Morgan Chase & Co. JPM, +0.05% CEO Jamie Dimon back in July, arguing that investors
simply don’t know what to expect as the Federal Reserve and other major central banks unwind their
multi-trillion-dollar bond-buying programs. Here’s some reading on how all of this could unfold in 2018:

Nafta

This is what’s keeping Canadian Prime Minister Justin Trudeau awake at night, anyway.

President Trump has repeatedly threatened to withdraw the U.S. from the 23-year-old North American
Free Trade Agreement if its fellow member countries don’t agree to American demands to “rebalance”
it, and the U.S. can pull out six months’ notice. Talks are scheduled to run through March, and they have
already been extended once. Trump’s chief trade negotiator has issued a downbeat assessment on the
talks.

BlackRock BLK, -0.92% released a top-10 list of geopolitical risks to watch last year in September, and at
the top of that list was Nafta.
Record corporate debt

Some analysts are cautioning that a bubble is forming in credit markets and that companies are
overextended to a degree that could spell trouble.

Stock valuations

Strategists at Société Générale have said they expect “stretched valuations and rising bond yields to
limit equity-index performances in 2018 and the prospect of a U.S. economic slowdown in 2020 to
further cramp returns in 2019.”

FAANG pullback

The scale of the FAANG rally in 2017 — Apple AAPL, -0.11% rose about 48%, Facebook FB, +0.02%
around 50% and Amazon AMZN, -0.23% over 55% — led to claims that this group has been overdone as
an investing theme, especially given signs of overvaluation. And the FAANG stocks weren’t just market
leaders in 2017; they accounted for a sizable portion of Wall Street’s overall move higher. Morgan
Stanley has said it is still positive on the group — whose other members are Netflix NFLX, -0.03% and
Google parent Alphabet GOOG, -0.15% GOOGL, +0.00% — but macro factors raise some yellow flags.”
MarketWatch’s daily Need to Know column recently highlighted one big reason for Apple investors to
worry in 2018: mounting concern that the $1,000 price tag on the iPhone X may cut into first-quarter
demand.

VIX spike

“A VIX spike is dangerous not only for everyone that is playing in the VIX square, but for all market
participants,” said Kevin Muir of the Macro Tourist blog, in a call we highlighted at the end of November.
The real worry here, according to Muir, is not just that those who have made enormous sums by
shorting the VIX VIX, -11.50% are about to give it all back. No, he believes they, along with many others,
stand to lose a whole lot more.

Robert Mueller

According to Joshua Brown, CEO of Ritholtz Wealth Management and a closely watched market
commentator, the “lackadaisically bullish consensus” for equity gains in 2018 is failing to account for
what he called “one major shock” that could potentially hit stocks: the outcome of special counsel
Robert Mueller’s investigation into Russia’s interference in the 2016 presidential election.

North Korea

Is North Korea the biggest black swan of all? Investors have so far shrugged off the threat of a military
conflict, including potentially the nuclear kind. North Korean leader Kim Jong Un kicked off the new year
with a speech claiming that the country has completed its nuclear weapons program, which could reach
any point in the continental U.S.

Geopolitical risks, in general

With most major constituents of the global economy finally pulling in the same direction and the U.S. on
course for more steady if unspectacular growth, the major risk now is a policy error, according to two
former winners of MarketWatch’s Forecaster of the Month award.

Also on BlackRock’s top-10 list of geopolitical risks: A Russia-NATO conflict, a South China Sea conflict,
U.S.-China tensions, a crisis escalation in Syria and Iraq, fragmentation in Europe, Gulf conflicts, a major
cyberattack and a major terror attack.

More weakness for the dollar

After a less-than-stellar 2017 performance, marked by an 8% drop against its main rivals, the U.S. dollar,
many hope, will return to strength in the new year, but there is plenty to rain on this parade.

And more ...

Saxo Bank annually lays out 10 unlikely events that would rattle investors in 2018 if they were to
happen. Their unlikelihood extends in some cases as far as outlandishness — for instance, a 25% flash
crash in the S&P 500 or bitcoin peaking at $60,000 before sinking to $1,000. Still, it’s worth a read.

Earlier this month, Deutsche Bank circulated its list of 30 risks for markets in 2018, which appear in
random order and include both upside and downside risks. Investors might not be ready for even a
small correction in U.S. stocks, as they “haven’t seen one for a long time,” the Deutsche Bank team
observes. Read more about the list here.
 1AR Thumpers
Alt causes – Shutdown, automation, offshoring, tax reform, etc… also, global asset
bubbles and credit crises
Lachman, AEI after serving as a managing director and chief emerging market economic strategist at
Salomon Smith Barney, 10/26/2017

(Desmond, Yellen's Monetary Policy Too Easy, https://seekingalpha.com/article/4116641-yellens-

monetary-policy-easy)

In early 2006, on the eve of Ben Bernanke replacing Alan Greenspan as Federal Reserve chairman, The
Economist ran a cover showing Greenspan and Bernanke running in a relay race. However, instead of
having Greenspan pass Bernanke a baton, it had him pass Bernanke a stick of dynamite.

Two years into his term, Bernanke found himself having to deal with the bursting of a housing and credit
market bubble, which precipitated the worst U.S. and global economic recession in the past 70 years.

Today, one has to wonder whether whoever might succeed Janet Yellen will also not be receiving a stick
of dynamite. Under her four-year tenure at the Fed's helm, Yellen too has contributed to the rise in
global debt levels to record highs and to the creation of dangerous asset price bubbles. She has done
so through the maintenance of an ultra-easy monetary policy stance.

As Greenspan recently warned, the highly expansionary monetary policies of the past several years have
given rise to a global government bond market bubble. He might usefully have added that this bubble
has hardly been confined to the world government bond market.

Indeed, global equity price valuations are now at very lofty levels that have only been experienced three
times in the past 100 years, while there are signs of bubbles in all too many housing and credit markets
across the globe.

Sadly, it is all too likely that the global asset price bubble will burst well within the next Fed chair's
term. When that happens, one must hope that the Fed does not repeat its mistakes by resorting to yet
another round of aggressive quantitative easing that will only set us up for the next boom-bust cycle.

Trade war
Jim Tankersley, NYT, Trump's Steel Tariffs Raise Fears of a Damaging Trade War, 3/2/18,
https://www.nytimes.com/2018/03/02/business/trump-tariffs-trade-war.html

Those leaders worry that Mr. Trump, by imposing stiff and sweeping tariffs on steel and aluminum, will
set off a trade war with other countries. The global tit-for-tat could hurt American exporters and raise
costs for manufacturers that rely on a vast supply chain around the world.

If that happens, it will crimp economic growth, undermining the stimulative effects of Mr. Trump’s
deregulation push and his signature $1.5 trillion tax cut.
The odds of such an outcome now appear to be rising, prompting congressional Republicans to push
Mr. Trump in public and in private to reconsider. “If the president goes through with this, it will kill
American jobs — that’s what every trade war ultimately does,” Senator Ben Sasse, Republican of
Nebraska, said on Friday. “So much losing.”

So far, Mr. Trump is not having any of that criticism, saying on Twitter on Friday that “trade wars are
good, and easy to win.”

That’s not how trade wars usually go.

Even the prospect of a trade war could hurt the economic expansion underway. That’s because any
uncertainty can prompt companies to curtail investment or hold off on hiring.

If other countries follow up on their threats to retaliate, the pain could be significant. Beyond tariffs,
their tools include taking strategic strikes at certain industries or taking their grievances to the World
Trade Organization.

Any actions threaten the global supply chains on which the American economy is heavily dependent.
The number of workers who will lose out if countries are cut off from America far exceeds the number
who stand to gain from the pending tariffs.
“Industries that buy steel and aluminum, not to mention agricultural exporters, employ many times more people than the industries that the
president wants to protect,” said Peter A. Petri, an economist and trade expert at Brandeis University’s International Business School. “Whether
we go through with his approach is anyone’s guess, but business investment depends on predictable policy, and relentless chaos takes its toll
even if cooler heads prevail on the policies that the president is tweeting about.”

Mr. Trump’s planned tariffs would, in effect, levy a tax of 25 percent on imported steel and 10 percent on imported aluminum. The goal is to
counter China, Russia and other countries that have flooded the global markets with cheap products and made it harder for the American steel
industry to compete.

If put into effect, the tariffs would raise the price of steel and aluminum, squeezing automakers, beverage manufacturers and other industries
that buy a lot of those materials. That would increase prices for consumers, kill some jobs in those industries or both.

The tariffs would almost certainly provoke a response from America’s trading partners — and not just
China and Russia, because they would apply to every other country. On Friday, the European Union
threatened to retaliate by imposing tariffs of its own on some goods from America, including bluejeans,
bourbon and motorcycles.

If the back-and-forth stopped there, the American economy would lose 0.1 percent of its output this
year, said Mark Zandi, the chief economist at Moody’s Analytics. That loss would cost the country
190,000 jobs.

What worries many economists is the prospect that the retaliation will go even further. A cycle of
increasingly harsh tariffs would slam the brakes on global growth.

Here is one way the dispute could worsen: By provoking responses from Canada and Mexico, the tariffs
could derail the current renegotiation of the North American Free Trade Agreement. Mr. Trump could
pull the United States out of that agreement, which would erect new and damaging trade barriers on
agricultural exports from states such as Iowa.
Another possibility is that other countries could file complaints with the World Trade Organization. The
W.T.O. could declare that the tariffs violated global trading rules, but the Trump administration, which
has marginalized the organization, could choose to ignore it.

Such a move would stir chaos in the global trading regime. It would be like ejecting the referee from a
playoff basketball game. A free-for-all could ensue, with countries levying tariffs or subsidizing domestic
exporters in ways the W.T.O. would never allow.

Mr. Zandi estimates that a Nafta breakdown would cost the United States 1.8 million jobs. He calculates
that a full global trade war, while far less likely, would carry much higher risks, including nearly four
million lost American jobs.

“The economic fallout from such a war could be serious,” he said, “ending in a global recession.”
 2AC No Impact
No impact
Clary 15
Christopher Clary, PhD in Political Science from MIT and a Postdoctoral Fellow at the Watson Institute
for International and Public Affairs at Brown, Economic Stress and International Cooperation: Evidence
from International Rivalries, MIT Political Science Department, Research Paper No. 2015-8, p. 4

Economic crises lead to conciliatory behavior through five primary channels. (1) Economic crises lead to
austerity pressures, which in turn incent leaders to search for ways to cut defense expenditures. (2)
Economic crises also encourage strategic reassessment, so that leaders can argue to their peers and
their publics that defense spending can be arrested without endangering the state. This can lead to
threat deflation, where elites attempt to downplay the seriousness of the threat posed by a former rival.
(3) If a state faces multiple threats, economic crises provoke elites to consider threat prioritization, a
process that is postponed during periods of economic normalcy. (4) Economic crises increase the
political and economic benefit from international economic cooperation. Leaders seek foreign aid,
enhanced trade, and increased investment from abroad during periods of economic trouble. This search
is made easier if tensions are reduced with historic rivals. (5) Finally, during crises, elites are more prone
to select leaders who are perceived as capable of resolving economic difficulties, permitting the
emergence of leaders who hold heterodox foreign policy views. Collectively, these mechanisms make it
much more likely that a leader will prefer conciliatory policies compared to during periods of economic
normalcy. This section reviews this causal logic in greater detail, while also providing historical examples
that these mechanisms recur in practice.
 Ext-No Impact
“diversionary war” thesis is backwards—best statistical research proves
Clary 15
Christopher Clary, PhD in Political Science from MIT and a Postdoctoral Fellow at the Watson Institute
for International and Public Affairs at Brown, Economic Stress and International Cooperation: Evidence
from International Rivalries, MIT Political Science Department, Research Paper No. 2015-8, p. 4

Do economic downturns generate pressure for diversionary conflict? Or might downturns encourage
austerity and economizing behavior in foreign policy? This paper provides new evidence that economic
stress is associated with conciliatory policies between strategic rivals. For states that view each other
as military threats, the biggest step possible toward bilateral cooperation is to terminate the rivalry by
taking political steps to manage the competition. Drawing on data from 109 distinct rival dyads since
1950, 67 of which terminated, the evidence suggests rivalries were approximately twice as likely to
terminate during economic downturns than they were during periods of economic normalcy. This is
true controlling for all of the main alternative explanations for peaceful relations between foes
(democratic status, nuclear weapons possession, capability imbalance, common enemies, and
international systemic changes), as well as many other possible confounding variables . This
research questions existing theories claiming that economic downturns are associated with
diversionary war , and instead argues that in certain circumstances peace may result from economic
troubles .

Prefer our findings – it’s robust across all tests, including the rare events logistical
regression – conclusively disproves their talking heads
Christopher Clary, former International Affairs Fellow in India at the Council on Foreign Relations,
Postdoctoral Fellow at the Watson Institute at Brown University, Adjunct Staff Member, RAND
Corporation, Security Studies Program, MIT, country director for South Asian affairs in the Office of the
Secretary of Defense, former Research Fellow, the Harvard Kennedy School's Belfer Center for Science
and International Affairs, former research associate in the Department of National Security Affairs at the
Naval Postgraduate School, BA from Wichita State University and an MA from the U.S. Naval
Postgraduate School, 2015, Economic Stress and International Cooperation: Evidence from International
Rivalries,” Massachusetts Institute of Technology Political Science Department Research Paper No. 2015

Situations in which a phenomenon of interest appears (an “event”) dozens to thousands

times fewer than it does not appear (a “non-event”) are rare events. When estimating them, it is

appropriate to use rare-events logistic regression.72 Gary King and Langche Zeng found that
traditional logistic estimation underestimates predictions of the probability of an event taking place,
Pr(Y=1), and overestimates predictions that a non-event will occur, Pr(Y=0).73 Rare-events logistic

regression, or RELogit, corrects for this attenuation bias. King and Zeng argued the difference in

estimation for rare-events logistic regression and traditional logistic regression "will be largest when

the number of observations is small (under a few thousand) and the events are rare (under 5% or

so).”74 Both criteria are met by the data and hence RELogit is used for all subsequent analysis, unless

otherwise stated.75

[Begin footnote 75]

As a robustness check, I have used multiple types of estimators. I have used conventional logistic
regression for all models described below and coefficients and standard errors are nearly identical
across all specifications as those from RELogit. I have also used a linear probability model (Ordinary
Least Squares regression), which tends to provide similar magnitude substantive results and similar or
smaller standard errors for my explanatory variables in the models tested below. Finally, I have used Cox
proportional hazard models, which provide similar substantive and statistical results. (Tests suggest the
proportionality assumption is not violated for any covariates.) In other words, the choice of the RELogit
estimator does not alter the substantive or statistical findings.
 AT: Diversionary War
Congress and Trump’s advisors will create fake victories to make him feel like he’s
taken diversionary action
Jonathan Bernstein 16, taught political science at the University of Texas at San Antonio and DePauw
University, 12/13/16, “'Wag the Dog' for the Age of Trump,”
https://www.bloomberg.com/view/articles/2016-12-13/-wag-the-dog-for-the-age-of-trump

Donald Trump will come into office knowing little about government policies and probably caring less about most of them. But
he's going to want to stage an impressive opening number or two, to let everyone know who's the star of this show. The
combination of uninformed and uninterested, but still ambitious and aggressive -- does that sound like potential trouble?

If so, here's a different question. How

can we insure that the new president feels he's getting his way often enough
to keep him satisfied without creating disaster on the actual policies?

Answer: Think "Wag the Dog." In this version, people

inside and outside of his administration will persuade him to fight
and win a few harmless battles. The Tweeter-in-Chief can say and believe he's taking decisive action.
And normal Republicans and Democrats can get on with hashing out the normal stuff of politics.

Suggestion One: The president wins the war on crime!

Solution: As president-elect, Trump is still saying the murder rate is "highest in 45 years," a fictional claim he made in the campaign as well.
Despite a jump in 2015, the murder rate is close to historical lows. So all he has to do is start using real statistics instead of phony ones to claim
credit for solving this one.

The formula can be repeated for other mistaken claims he made during the campaign about how terrible America is.

Suggestion Two: Repeal a fictional law!

Solution: The president can help fulfill his "drain the swamp" pledge if he can claim a full defeat for everyone in Congress, including the
Republican leadership. A harmless way to do this is to make up a law he can persuade Congress to "repeal."

There's even a phony law that has already been invented, the Public Affairs Act of 1975, a title dreamed up by academics to study how public
opinion works. It turns out that many people will readily express opinions on non-existent laws, and will support or oppose them in response to
partisan cues.

If congressional leaders deny the need to repeal the (fictional) law, perhaps Trump can get them to take action anyway, since it would placate
the angry constituents who are calling the legislators' offices and demanding that the "law" be declared null and void. Done. Trump can go on a
victory tour, and leave the battles over real policies to the people who are serious about the policies.

Many voters don't know how law-making works in the U.S. in the first place, and others may not care much about the truth so much as they
care about visibly sticking it to the do-nothing bureaucrats in Washington.

Suggestion Three: Invade something!

The president-elect was the "bomb the hell out of them" candidate. How can he do this without involving
a lot of innocent people or harming the interests of the U.S., let alone pick the wrong place (the South China Sea?) and risk global
war?

Solution: Find someplace out of the way, maybe an uninhabited island somewhere in the South Pacific -- closer to
Hawaii than to China and Japan. Announce
that Islamic League is about to set up a base there, and then bomb
away and even stage a beach landing, with patriotic flag-raising pictures.

Yes, I'm joking (well, mostly). But these "solutions" show some serious truths about how government works.
Congress, career civil servants, interest groups and parties manipulate all presidents. The only question is how much, and
how successful presidents are in fighting back.

Even the most knowledgeable presidents have very limited expertise, given the vast number of subjects they deal with -- everything from space
travel to Medicare reimbursement rates to aircraft carriers to national parks to constitutional law to regulation of complex financial products to
disputes among Kurdish factions in Iraq. And the civil servants and members of Congress and lobbyists that presidents deal with are often
masters of detail on whatever specific issue is under consideration.

Presidents win a lot of these fights (or at least play to a draw) because they have strong political skills. They are good at figuring out what others
want, and at knowing the incentives and motivations of those they must interact with. Trump has to date not demonstrated such skills,
although, to be fair, he's only beginning to be tested.

Thus far, he has

shown a weakness for being easily distracted, and of seeking quick, surface-level results --
ones that career bureaucrats or House subcommittee chairs can reverse later, once the president's attention has moved on to
something else.

Granted, a lot of people, even Republicans, would be reluctant to give Trump such a long leash to achieve phony victories. But if they fear
he's dangerous as president, then it would be better to keep him happy with some minor, temporary
bump-ups in public opinion than it is to let him intervene in areas where he could do real
damage.
Of course, liberals believe that normal Republicans do plenty of damage to the nation on their own, Trump or no Trump. But at least those
normal Republicans may respond to normal incentives, and moderate their positions if their ideal policies turn out to be unpopular.

Think about it. Is a distracted president such a bad thing after all?

If Trump starts a war in this scenario it would be a symbolic target, not a major one
Kinney 17 – intern at the Foreign Policy Research Institute, graduate student at Villanova University
completing his Masters in history (Brandon, 7/27. “In Search of a Trump Doctrine.”
https://www.fpri.org/article/2017/07/search-trump-doctrine/)

There may also be a fear of the president entering into a diversionary war – a war for the purpose of
distracting the public, whether to combat his low approval ratings, dominate the news cycle, or challenge any
investigation he perceives as threatening to his presidency. Without a clear doctrine to adhere to, the president has some
flexibility in entering into such a war not unlike President Clinton’s strikes in Afghanistan in 1998 while under the cloud of an investigation. By
definition, a diversionary war would require a highly symbolic target unlikely to put up much of a fight.
Doing so would provide action at a low risk, perhaps to serve some merit such as a humanitarian cause.
The hope for presidents who launch such a war would be to unify the American home front and galvanize the public behind
him. It would be a huge gamble, however, and if the president were desperate enough to consider a diversionary war, it would
axiomatically mean he had little domestic support.
 --at: nk war
North Korea is the one area where Trump won’t do anything unilaterally
Jones 17 – Vice President and Director - Foreign Policy and Senior Fellow - Foreign Policy, Project on
International Order and Strategy, Brookings (Bruce, with Jonathan Pollack, 3/7. “North Korea threat
brings out Trump’s serious side.” https://www.brookings.edu/blog/order-from-
chaos/2017/03/07/north-korea-threat-brings-out-trumps-serious-side/)

Amid the sound and fury of President Donald Trump’s first weeks in office, the new U.S. administration has
been widely
castigated for policy dysfunction, an insurgent view of international alliances and trade, and worrying
signals about its approach to core democratic institutions.
Numerous commentators argue that the president is leading by instinct and tweet, rather than through a deliberate policy process drawing
upon talented and experienced senior officials and the professional bureaucracies that exist to support them. The growing war of words
between the White House and the U.S. intelligence community looms as another major worry.

However, a very different dynamic has emerged on North Korea policy, arguably the most urgent national security
challenge the administration confronts. This is something of a surprise.

During the election, some of candidate Trump’s sharpest departures from traditional Republican foreign policy concerned his open questioning
of America’s Asian alliances, especially the suggestion that Japan and South Korea should acquire their own nuclear weapons, rather than
continue to rely on American security guarantees. This message roiled both Tokyo and Seoul and shook the stability of East Asian peace.

When the president-elect met with then-president Barack Obama two days after the election, the North Korean nuclear challenge was among
the lead items in the handover discussion. Obama warned Trump that Kim Jong Un’s accelerated pursuit of nuclear weapons and
missiles would preoccupy the new administration.

Trump’s response was soon apparent. Even before taking office, the president-elect and his team continued the North Korea discussion with
Obama and outgoing senior national security officials. Trump also reportedly requested and received intelligence briefings
on the country’s growing nuclear capabilities.

Equally important, Trump’s first foreign policy statement after the election sought to reassure South Korea about the continuing
American commitment. Before he resigned as national security adviser in February, Michael Flynn spoke with senior officials in Seoul and Tokyo
and stressed continuity in U.S. security guarantees. He also met in New York with South Korean counterpart Kim Kwan-jin.

Trump then sent Defense Secretary James Mattis to South Korea and Japan in the first overseas trip by any member of the new
cabinet. Mattis offered private and public reassurances in both countries while warning Pyongyang that the American response to any nuclear
provocation would be “effective and overwhelming.” These steps assumed particular significance in Seoul, still deeply enmeshed in the political
crisis over the impeachment of President Park Geun-hye.

These moves also elicited additional steps by Beijing. Although China continues to oppose the U.S. decision to deploy the Terminal High Altitude
Area Defense missile defense system on the peninsula, there is a renewed urgency in Chinese commentaries on the nuclear issue. An editorial
last week in Communist Party newspaper Global Times ominously characterized the Korean Peninsula as “probably at its most dangerous time
and as close to being out of control since the end of the Korean War.” China’s recent suspension of coal imports from North Korea for the
remainder of 2017 made a virtue of necessity in that Beijing was rapidly approaching the allowable annual levels permitted under a U.N.
Security Council resolution adopted last November.

The move however clearly signals that China sees the need for a coordinated strategy to impose additional costs on North
Korea. The decision imposes clear limits on the North’s export earnings, and has triggered unprecedented criticism of China in North Korean
media, including remarks about “a neighboring country dancing to the tune of the U.S.”

Engagement with China

Meanwhile, Trump and key cabinet secretaries, including Secretary of State Rex Tillerson and Treasury Secretary Steven Mnuchin,
have sought through meetings and phone calls with Chinese counterparts to repair damage from the
president’s earlier statements on the U.S. “One China” policy. Before his call to make amends with Chinese President Xi Jinping,
Trump had argued that the U.S. position on Taiwan should be in play to induce Beijing to make concessions on trade issues, but this was
unproductive. Even setting aside that feint, openly challenging China on economic issues while sustaining cooperation on North Korea
nevertheless remains a very tricky path for the Trump administration.

Trump however has clearly recognized the risks of a severe, quite possibly profound crisis on the Korean
Peninsula. He has adjusted his thinking in a quiet, careful fashion that has included repeated
consultations with the intelligence community.
With the exception of one tweet responding to an exaggerated North Korean claim that it can reach the continental U.S. with an
intercontinental ballistic missile, Trump has remained sober and focused. For those wondering whether the Trump White House
is capable of careful deliberation over complex, high-risk security issues, the Korean Peninsula provides a welcome example.

None of these developments makes the options in front of Trump any easier. Three previous presidents devoted substantial energy to
preventing the emergence of a North Korean nuclear weapons capability and all three largely failed. The near-simultaneous launching of four
ballistic missiles on Monday morning, with all landing within 200 miles of Japan’s coastline, underscored North Korea’s increased capacity to
target neighboring states. Although the latest tests did not fulfill Kim’s threat to test a missile able to reach the American mainland, they
demonstrated that North Korea has every intention to persist with weapons programs opposed by nearly all other states.

A genuine debate persists among experts about whether engagement, pressure or some combination of the two can alter North Korea’s
determination to sustain its unrelenting pursuit of nuclear weapons. Some in the expert community believe that there is no alternative to “soft”
regime change—the use of tougher sanctions, isolation and pressure from China and other surrounding powers to eventually induce a change
in leadership, not just a change of behavior. However, this presumes a long-term, high-risk process with no guarantee of success.

To address the full range of possibilities, the Trump administration has launched a review of policy options. In the aftermath
of the North’s brazen assassination of Kim Jong Nam, Kim Jong Un’s half-brother, with lethal chemical agents at Kuala Lumpur International
Airport, measures under consideration reportedly include restoring Pyongyang to a list of state sponsors of terrorism, reversing its 2008
removal. Additional steps purportedly include increasing restrictions on North Korean financial and commercial activities and heightened
military measures to address potential crisis contingencies.

Most of the scenarios in the Korean Peninsula range from dangerous to horrific. This process will continue to test the new administration. Given
projected timelines in Pyongyang’s nuclear and missile development, President Trump could face an early decision on whether to shoot down
or otherwise disable a North Korean long-range missile, very possibly triggering an even larger military crisis on the peninsula. His
administration also has an urgent need to fill out its ranks with senior appointments at the departments of state and defense. The president
and cabinet officers can set the policy framework, but policy coordination and implementation requires that the fully functioning machinery of
government stand behind the policy.

All policy options on the peninsula are bad. It

is nonetheless heartening that the president shows keen awareness of the
scale of the challenge and the need to approach North Korea with deliberation and resolve.
Misc Author Indicts
 Neg
Cut me!! Great indict of all the pro-immigration folks
https://www.law.berkeley.edu/wp-content/uploads/2018/04/Immigration-Economics-and-Immigration-
Policy.pdf

Employers want cheap labor—that’s why they’re funding these reports, biases
conclusions
Foster, lawyer specializing in civil RICO cases involving the employment of illegal immigrants, 14
(Howard, “Why More Immigration Is Bad for America”, The National Interest, 9-5-14,
http://nationalinterest.org/blog/the-buzz/why-more-immigration-bad-america-11210, accessed on 7-
13-18, JM)

Why do we have immigration when unemployment is high? Nobody in Washington will give the honest
answer. Employers want cheap labor. They benefit tremendously from legal and illegal immigration in
the current slow-growth economy. We have a million legal immigrants per year, and the vast majority of
them enter the labor market competing with Americans for scarce job opportunities. The result is wage
depression, though there are other factors that restrict wage growth, and persistently high
unemployment above the 5 percent level that most economists believe is unhealthy. Rather than have a
million legal immigrants plus more than three hundred thousand more job seekers coming over on
temporary work visas year in and year out without a pause, we should ask the simple question, do we
need any immigrants? The only constituency that claims there is such a need is employers. And they
have essentially written U.S. immigration law for a very long time. The primary type of immigration is for
“family reunification.” That means a U.S. citizen can sponsor their immediate relatives for permanent
residency and then citizenship. This sounds like a perfectly reasonable basis on which to base an
immigration policy. But it makes no economic sense and has disastrous consequences. Spouses, children
and parents of citizens may be unskilled, uneducated, and thus likely to become “public charges,” the
bane of immigration. Economists agree that the U.S. has ample unskilled labor. (The Department of
Labor, which is supposed to protect the interests of U.S. workers, has said this for more than twenty
years.) But the exception is companies that rely on this labor, particularly food processors, cleaning
companies and agriculture. They always want more because more means less pay. These companies
could care less about public benefits, unemployment rates and rest of the pathologies that an excess of
immigrants can bring. And they turn very nasty when criticized. Anyone who brings up the
unemployment is a racist. Or they roll their eyes and tell you American won’t do nasty jobs. Tell that to
the nation’s sewer workers who are mostly unionized, well-paid and American. There is currently no
numerical cap in the number of spouses and children that immigrants can bring over. There needs to be,
and that cap must reflect economic reality, the skill level of the immigrants, the unemployment rate in
the labor market where they will live, and the likelihood they will become a public charge. If it’s likely,
then the sponsors should be required to sign surety bonds to reimburse the government for any welfare
benefits the immigrants incur. It might seem callous to policy makers to restrict family reunification, but
the current system is callous to Americans at the bottom of the labor market. The only beneficiaries are
employers. Noncitizens should not be permitted to sponsor anyone. The idea that green card holders,
people in this country on a probationary basis, should be allowed to bring over their children and
parents is nonsensical as an initial proposition (if they want to be with their relatives, then why are they
here?), but in a tight labor market, without any justification except to employers. We currently allow
this.
 AT: Borjas Biased
Frum 16
(David Frum, former speechwriter for George W. Bush, “The Great Immigration-Data
Debate”, https://www.theatlantic.com/politics/archive/2016/01/the-great-immigration-data-
debate/424230/, Published January 19, 2016, Accessed June 24, 2018, njt)

In The Big Short, one of the characters explains how he discovered the worthlessness of the mortgages that supposedly undergirded Wall Street’s triple-A securities:
“I read them.” The political equivalent of Wall Street’s mortgage-backed securities are the economic models invoked to support this policy or that one. Everybody
cites them. Too few look inside them. And the results are the same: Trusted products turn out to be junk. Sign up for our daily afternoon newsletter. Each weekday
evening, get an overview of the day’s biggest news, along with fascinating ideas, images, and people. Email Address (required) Enter your email Sign Up Thanks for
signing up! One of the most influential such modeling exercises was a paper published by the University of California’s David Card in 1990. Card
studied the
economy of Miami after an influx of 125,000 Cuban migrants between April and October 1980, the
“Mariel boat lift.” Under American law, Cuban migrants become almost immediately eligible to work in the U.S. The result: In bare weeks, the greater
Miami workforce jumped by 8 percent—and the stock of workers without a high-school diploma spiked a startling 20 percent. Yet—according to David

Card—even this large and sudden supply shock had no negative effect on the wage trend for low-skilled workers. (Wages did decline, he finds, but
no more for those workers he regarded as competing with Marielitos than for those he regards as not
competing.) MORE STORIES Evangelical Fear Elected Trump JOHN FEA The Supreme Court Tells the Government to Get a Warrant GARRETT EPPS The Deep
Consistency of the Trump Administration VANN R. NEWKIRK II Why Trump Keeps Creating Crises DAVID A. GRAHAM This finding, if true, carried enormous
implications. The United States in the 1990s would experience a vast surge of very low-skilled migration, legal and illegal, from Mexico and Central America. Simple
economic logic predicted that competition from these migrants should depress the wages of native-born Americans. Card reassured policymakers that simple logic
was wrong: They could welcome the newcomers at no cost to the settled population. Here at last was the free lunch that Milton Friedman had so obstinately
insisted could not exist. How was it possible that immigration could stand as the sole exception to the usual laws of supply and demand? A 2010 paper by another
eminent California economist, Giovanni Peri, answered the question with—of course—another economic model. According to Peri, what happened was this: As new
workers arrived, wages did fall for the jobs they took. Declining wages for existing jobs prodded native-born workers to improve their skills and shift to better paid
work. So, while the wages for particular job categories might drop, the incomes of the people who formerly held jobs would paradoxically rise. Or, translated into
econo-speak: Large inflows of less-educated immigrants may reduce wages paid to comparably-educated, native-born workers. However, if less educated foreign-
and native-born workers specialize in different production tasks, because of different abilities, immigration will cause natives to reallocate their task supply, thereby
reducing downward wage pressure. Anyway, that was the theory. But was the theory true? I laid out the reasons for disbelieving it in a post for The Atlantic earlier
this year. What if natives respond to immigrant competition by shifting out of the labor market entirely, by qualifying for disability pensions? The proportion of the
population receiving disability pensions doubled between 1985 and 2005 and jumped by another 20 percent during the Great Recession. 14 million Americans now
receive disability pensions. The evidence is compelling that disability applications rise when the job market weakens. Why? Economists talk too blithely about
natives shifting to more skilled and remunerative work. Up-skilling costs time, effort, and money. It can oblige a worker to move away from family and friends. It
forces older workers to begin again at a time in their lives when they felt settled, to risk failure at a time in life when risk is not appreciated. It’s not highly surprising
that many displaced workers would opt to give up on work altogether instead. However, this reply to Peri is as theoretical as Peri’s own modeling. Over this whole
debate loomed the great fact of David Card’s work, seemingly proving that so long as migrants arrived into a reasonably healthy job market—South Florida in the
early 1980s, not the depressed U.S.A. of the Great Recession—native workers need fear no ill effect. But how good was that work? What went into David Card's
model? Over the past year, the economic profession has witnessed a series of autopsies and counter-autopsies upon Card’s data, sparking a debate that has rapidly
grown both intensely ideological and vituperatively personal. In October 2015, Harvard’s George Borjas—academia’s leading immigration skeptic—returned to the
Borjas redid the 1990
original data sets that supported David Card’s famous paper. Borjas insisted that Card had chosen his comparisons wrong.

paper’s math and hurled a defiant criticism: In fact, the absolute wage of high school dropouts in Miami
dropped dramatically, as did the wage of high school dropouts relative to that of either high school
graduates or college graduates. The drop in the low-skill wage between 1979 and 1985 was substantial,
perhaps as much as 30 percent. … At least in the short run, the labor market responded precisely in the way that the “textbook” model predicts:
an increase in the number of potential workers lowered the wage of those workers who faced the most competition from the new immigrants. Here’s where things
get testy. David Card’s 1990 paper has been unusually influential, cited again and again as a “classic” of immigration economics. It exerts its influence in large part
because it purports to be based on close study of real-world effects, not blackboard computations. As Princeton’s Alan Kreuger—formerly the chair of President
Obama’s Council of Economic Advisers—wrote in 2006: "Studies that claim to find a deleterious effect of immigration on natives’ wages are typically based on
theoretical predictions, not actual experience.” Card, by apparent contrast, had exited the ivory tower to discover facts in the marketplace. And now a critic dared
claim that Card had got his math wrong? Impossible. Intolerable. In short order, a rebuttal to Borjas’ criticism of Card was published by Giovanni Peri and a
University of California graduate student, Vasil Yasenov. Their answer in their winter 2015 paper was scorching: We point out that the very different conclusions in a
recent reappraisal by George Borjas (2015) stem from the use of a small sub-sample of high school dropouts in the already very small March-CPS sample. That
sample is subject to substantial measurement error and no other sample provides the same findings. Being imprecise about the timing of the data and the choice
and validation of the control sample further contribute to the impression of an effect from the boatlift in Borjas. In a December 18 op-ed at Bloomberg View, the
columnist Noah Smith cited the Peri-Yasenov paper to pour even more scorn on Borjas’s work and reputation.
Not only was Borjas’s sample too small, but—contended Smith—it was downright manipulated. Even more damning, Peri and Yasenov find that Borjas only got the
result that he did by choosing a very narrow, specific set of Miami workers. Borjas ignores young workers and non-Cuban Hispanics -- two groups of workers who
should have been among the most affected by competition from the Mariel immigrants. When these workers are added back in, the negative impact that Borjas
finds disappears. Smith’s column concluded by attempting to excommunicate Borjas from all future participation in immigration debates. All of this leaves Borjas’
result looking very fishy. He would have had to have searched hard to find the one small group of workers who seemed to suffer from the Mariel influx. Borjas could
well have been subject to heavy confirmation bias—he might have been so fundamentally certain that immigration was bad for native workers that he searched and
searched until he found one group that seemed to confirm his pre-existing beliefs. In science terms, that is called data mining; it's a big no-no. In debates about
immigration, the anti-immigrant side inevitably cites Borjas. He has gained fame and notoriety for being the most prestigious economist who thinks that
immigration is a disaster for native workers. All of Borjas’ papers seem to arrive at this same conclusion. Participants in immigration debates really should stop citing
Borjas’ research so much. As one of those who cites Borjas’s work often, I suppose I was supposed to share the burn of this hot take. Soon after it appeared, I called
Borjas for comment. He had just finished a reply, he said, and it would be a doozy. And so it is. To understand what the economists are arguing about, you need to
understand their methods. When economists compare wages, they must begin by deciding which wages to compare. You wouldn’t prove much, one way or the
other, by studying wages of Miami-area stockbrokers before and after the Mariel migration: The Marielitos did not compete with stockbrokers. Well, who

should the Marielitos be compared with? You want to compare them to similarly situated workers. But that
creates two statistical problems. The first is: How do you define a similarly situated worker? The second is: Remember, all this happened some time in the past. The
only way we know what anybody was making in 1980 is by looking at Department of Labor samples, often collected for other reasons. Suppose we wanted to say
something about Miami-area stockbrokers in 1980. The Department of Labor would have an average wage—but that average would be aggregated from a certain
number of persons chosen to answer a government questionnaire. If we wanted to know about women stockbrokers, the number of answers would be smaller, and
if we wanted to know about women stockbrokers in their 40s, it would be smaller again. Whe n Borjas did his work on the Mariel Cubans,
he defined a “similarly situated worker” quite precisely. He counted only men. He counted only native-born workers. And he
counted only workers who’d dropped out of high school. That meant he was looking at the wages of only about two dozen

people. He tried to compensate by looking at that small control group over three different year periods … but still, a small control group times three remains a
small control group. So that’s a problem. But now look at what Peri and Yasenov did to make their control groups bigger. They included women.

They included other recent Hispanic immigrants. And instead of counting only high school “dropouts,”
they included everyone in the Department of Labor samples who had not yet finished high school—
including people still currently enrolled in school! That generated a big sample all right, but a big,
worthless sample. Men and women have different labor-market experiences. Would you expect an influx of men without high-school diplomas to affect
the wages of nannies? Inserting other immigrants into the control group was also distorting, in work intended to

discern the effects of immigration on wages. It might, conceivably, have led to comparing some people
who are driving wages down to other people who are also driving wages down. And as for treating people who have
not yet completed high school as the equivalent of high-school dropouts—that’s the most intensely dubious comparison of all. Data mining is indeed

bad. But this kind of data dredging seems far, far worse. Yet data dredging on an industrial scale seems
to be the only way to rescue the Card paper from the withering criticism Borjas has offered. That’s not
very reassuring from an academic point of view. And if the most important immigration-doesn’t-hurt-
the-unskilled research of the past quarter-century must be rejected as hopelessly contaminated by its
own sampling errors, then what is left? It’s famously said that economic science represents the triumph of pure reason over common sense.
But in this case, what has triumphed over common sense is not reason, but massaged and manipulated data.
author indict core
 2ac author indict – FAIR
FAIR is a hate group
Nelson 12 Leah Nelson, Middle District of Alabama Federal Defender Program, Southern Poverty Law
Center, Judicial Reports Education Columbia University - Graduate School of Journalism HOW DO WE
KNOW FAIR IS A HATE GROUP? August 10, 2012 Leah Nelson
https://www.splcenter.org/hatewatch/2012/08/10/how-do-we-know-fair-hate-group

In the August 3 edition of the “John & Ken Show,” the duo took up for the Federation for American
Immigration Reform (FAIR), an anti-immigrant organization that the Southern Poverty Law Center has
called a hate group since 2008 because of its virulent and false attacks on non-white immigrants.

“The Federation for American Immigration Reform, I think, has been defined by some of these think
tank organizations as a hate group,” Chiampou said.

“Really? The Federation for American Immigration Reform, which just researches the facts concerning
America’s immigration policies, puts out reports concerning the amount of dollars spent on illegal
immigrants, goes up and through that. But because some of their stuff points out the truth, which the
other side doesn’t like, concerning how many illegals we have in this country, how much it costs this
country, our failing policies, politicians who don’t stand up for our laws, who don’t stand up for border
patrol, how they are suddenly labeled a hate group.”

OK, Ken, we’ll bite.

First, a quick factual correction. FAIR doesn’t “just” research “the facts” about immigration policy. It is a
lobbying organization. This is no secret. On its own website, under “Our Objectives,” FAIR said it seeks
“to influence public policy directly by lobbying (to the extent permitted by our tax status) and by
protecting the citizens' rights in the courts.” Its “mission,” in part, is to “advocate immigration policies
that will best serve American environmental, societal, and economic interests today and into the
future.”

So there’s that.

And then there’s the “facts” FAIR puts out there, the alleged “truth” that, you say, is so disliked by the
“other side.”

Sometimes FAIR’s “facts” are true. More often, they’re debatable, culled as they are from dubious
sources like FAIR’s sister organization, the Center for Immigration Studies.

The bottom line is, FAIR doesn’t peddle facts; it peddles hate. Its lobbying and legal efforts – such as the
campaign that led to Arizona’s SB 1070 and Alabama’s HB 56 – are based on fomenting fear, on
exploiting racial tensions and economic anxieties to convince people that they had better not let any
more “aliens” into their country.

FAIR founder John Tanton, a man with a lengthy record of friendly correspondence with Holocaust
deniers, a former Klan lawyer and leading white nationalist thinkers, has repeatedly suggested that
racial conflict will be the outcome of immigration. In 1998, he told a reporter that whites would
inevitably develop a racial consciousness because “most people don't want to disappear into the dustbin
of history,” and added that once whites did become racially conscious, the result would be “the war of
each against all.”

Dan Stein, FAIR’s president, is no better. “Immigrants don't come all church-loving, freedom-loving,
God-fearing,” he said in 1997. “Many of them hate America, hate everything that the United States
stands for. Talk to some of these Central Americans.”

Need more examples? Former Colorado Gov. Richard Lamm, a longtime member of FAIR's board of
advisors, once said that “new cultures” in America were “diluting what we are and who we are.” And
Joseph Turner, FAIR’s former Western field representative, once accused Mexican immigrants of turning
California into a "third world cesspool.”

Not to mention FAIR’s “suggested reading” on immigration, which includes white nationalist Peter
Brimelow’s Alien Nation, a book whose central thesis is that America should remain a country
dominated by whites.

FAIR also recommends Pat Buchanan’s State of Emergency: The Third World Invasion and Conquest of
America, which argues that America’s shift away from being white-dominated is "one of the greatest
tragedies in human history.”

So yes, John and Ken, FAIR is a hate group. Not because it promulgates “facts” and “truths” its
opponents would rather ignore but because it promotes hatred of immigrants, especially non-white
ones.

By defending racism, encouraging xenophobia and nativism, and giving its all to efforts to keep America
white, FAIR has more than earned its place in the pantheon of hate groups. That is where it belongs,
and that is where it will stay.

FAIR is an untrustworthy hate group

Media Bias Fact Check 17 The Federation for American Immigration Reform (FAIR)
https://mediabiasfactcheck.com/the-federation-for-american-immigration-reform-fair/

QUESTIONABLE SOURCE

A questionable source exhibits one or more of the following: extreme bias, overt propaganda, poor or
no sourcing to credible information and/or is fake news. Fake News is the deliberate attempt to publish
hoaxes and/or disinformation for the purpose of profit or influence (Learn More). Sources listed in the
Questionable Category may be very untrustworthy and should be fact checked on a per article basis.
Please note sources on this list are not considered fake news unless specifically written in the notes
section for that source. See all Questionable sources.

Bias: Extreme Right, Hate Group

Notes: The Federation for American Immigration Reform (FAIR) is a non-profit tax exempt organization
in the United States that advocates changes in U.S. immigration policy that they believe would result in
significant reductions in immigration, both legal and illegal. According to the Southern Poverty Law
Center The Federation for American Immigration Reform (FAIR) is a group with one mission: to severely
limit immigration into the United States. Although FAIR maintains a veneer of legitimacy that has
allowed its principals to testify in Congress and lobby the federal government, this veneer hides much
ugliness. FAIR has ties to white supremacist groups. Has made false claims according to fact checkers
here and here. (9/7/2016) Updated (7/20/2017)

Fair is a hate group

Media Matters 17 Refinery29 Properly Labels FAIR As An Anti-Immigrant Hate Group Refinery29 Gets
Right What Many Mainstream Outlets Get Wrong Blog ››› April 20, 2017 12:30 PM EDT ››› MEDIA
MATTERS STAFF https://www.mediamatters.org/blog/2017/04/20/refinery29-properly-labels-fair-anti-
immigrant-hate-group/216123

While reporting on the sponsored hashtag #BuildTheWall that trended on Twitter on April 19,
Refinery29 got right what many mainstream outlets get wrong: it properly labeled the group behind the
promotion, the Federation for American Immigration Reform (FAIR), as an anti-immigrant hate group
and showed evidence of the group’s white supremacist origins and nativist ties.

FAIR paid to promote the #BuildTheWall hashtag on Twitter as part of its agenda to push President
Donald Trump’s anti-immigrant policies -- many of which have been lifted straight from the group’s
wishlist and that of its sister organizations, the Center for Immigration Studies (CIS) and NumbersUSA.
When covering Trump’s anti-immigrant policies, mainstream media outlets often mischaracterize or
outright fail to disclose these groups’ nativist intent of “limiting the number of nonwhites who enter the
country,” thus helping hate groups sanitize their image. Media present these organizations merely as
favoring “stricter control on immigration” or as calling “for added immigration restrictions” while giving
them a platform to push their message. Trump has now tapped members of these groups for his
administration and granted them a seat at the table, adding further legitimization to what started with
media’s failure to properly identify “the nativist lobby” as hate groups.

Refinery29 broke from this pattern, noting that FAIR has been labeled “an anti-immigrant hate group by
the Southern Poverty Law Center (SPLC) and the Anti-Defamation League” and pointing out that the
group is "very close to promoting a 'white-America only' point of view, under the guise of limiting
illegal immigration." From the April 19 article:

On Wednesday, #BuildTheWall was the top trend on the social network, thanks to an ad
sponsored by the Federation for American Immigration Reform (FAIR).

On its Twitter account, the organization says it "fights for a stronger America with controlled
borders, reduced immigration and better enforcement. #NoAmnesty". The #BuildTheWall
hashtag in itself isn't really a problem. Neither is the text below, which reads: "Help FAIR Push
To Get President Trump's Wall Built." After all, people have the right to support the president's
immigration policies, and Twitter has had political advertisements for a long time.

The main issue for some social media users is that FAIR, the organization behind the trend, is
considered an anti-immigrant hate group by the Southern Poverty Law Center (SPLC) and the
Anti-Defamation League.

"FAIR leaders have ties to white supremacist groups and eugenicists and have made many
racist statements," the SPCL's description of the organization reads. "Its advertisements have
been rejected because of racist content. FAIR’s founder, John Tanton, has expressed his wish
that America remain a majority-white population: a goal to be achieved, presumably, by
limiting the number of nonwhites who enter the country."
It adds, "One of the group’s main goals is upending the Immigration and Nationality Act of 1965,
which ended a decades-long, racist quota system that limited immigration mostly to northern
Europeans. FAIR President Dan Stein has called the Act a 'mistake.'"

In other words, FAIR is very close to promoting a "white-America only" point of view, under
the guise of limiting illegal immigration.

According to the SPCL, Stein is the current executive director of FAIR. He has not disavowed the
statements made by Tanton, who was one step away from calling himself a white nationalist
and who wanted the U.S. to have "a European-American majority." In fact, Stein said in 2009
that his predecessor was "a Renaissance man."
 2ac author indict – CIS
CIS is racist and anti-Semitic
Piggott and Amend 17 Stephen Piggott, Senior Research Analyst with the Southern Poverty Law Center,
and Alex Amend, Director of Research, Intelligence Project at @ SPLC. Center for Immigration Studies
(CIS) More Than An Occasional Crank: 2,012 Times the Center for Immigration Studies Circulated White
Nationalist Content. https://www.splcenter.org/hatewatch/2017/05/23/more-occasional-crank-2012-
times-center-immigration-studies-circulated-white-nationalist

The Southern Poverty Law Center listed CIS as a hate group for the first time when our annual count was
published in February of this year. The designation resulted primarily from their move to start publishing
the work of discredited race scientist Jason Richwine (who was once forced to resign from the arch-
conservative Heritage Foundation) and their shocking circulation of an article from one of America’s
most prominent white nationalist websites and another written by a fringe Holocaust-denier in their
weekly newsletter.

On the question of the CIS newsletter, Krikorian attempted to play down its significance and the racists
included in it, arguing in the Washington Post that it is “trivial” for SPLC to criticize CIS for “occasionally
includ[ing] pieces by writers who turned out to be cranks.” In a May 3 appearance on NPR, Krikorian
doubled down, saying that “it doesn’t even pass the laugh test” for SPLC to criticize CIS for circulating
the work of a known Holocaust-denier like John Friend.

The SPLC decided to conduct a more thorough investigation into CIS’s weekly immigration commentary
email roundup, with the help of the civil rights group Center for New Community (CNC). Our findings
reveal that on far more than a few occasions CIS has circulated materials from white nationalists and
anti-Semites, prominent racist thinkers whose “crank” status is well known (in many cases for decades).
Rather than reflecting an interest in a range of debatable viewpoints, as Krikorian also likes to point out
that CIS circulates New York Times articles, CIS’ newsletter reveals an organization with a sophisticated
grasp of the nativist extremist and white nationalist movement. The evidence, from the ideology of CIS’
founder to its publishing of Richwine, shows that this fluency is because the group is cut from the same
cloth.

SPLC and CNC examined approximately 450 of CIS’s weekly emails dating back almost 10 years and
found that CIS circulated over 1,700 articles from VDARE.com, an average of over three VDARE articles
in every weekly immigration roundup it sends out.

VDARE is a blatantly racist website and a hub for white nationalists and anti-Semites who are opposed
to non-white immigration. VDARE’s founder is Peter Brimelow, one of the high priests of the “Alt-Right,”
the latest rebranding of white nationalism. Krikorian is quite familiar with Brimelow, and wrote a review
of Brimelow’s infamous anti-immigrant book Alien Nation, calling it a “flawed jewel.” CIS also published
Brimelow in a 1998 colloquy titled “What , Then, Is the American, This New Man?”

In total, CIS has circulated 51 articles penned by Brimelow, the majority of them republished from
VDARE.

A further 27 were authored by John Derbyshire, a white nationalist Brimelow hired after the former was
fired by the National Review in one of the magazine’s periodic purgings of racist contributors for a
screed he wrote titled, “The Talk: Non-Black Version.” The article included lines like, “A small cohort of
blacks — in my experience, around five percent — is ferociously hostile to whites and will go to great
lengths to inconvenience or harm us,” as well as handy tips like, “If planning a trip to a beach or
amusement park at some date, find out whether it is likely to be swamped with blacks on that date.”

Other white nationalist contributors to VDARE CIS has circulated include F. Roger Devlin, an author and
regular on the white nationalist speaking circuit, and Virginia Abernethy, a woman who describes herself
as an “ethnic separatist” who also once ran as a VP candidate for the white nationalist political party
American Freedom Party (AFP), then known as the American Third Position (A3P).

CIS also circulated three articles from the white nationalist website American Renaissance, headed by
Jared Taylor, one of the most prominent white nationalists of the past quarter century, and one Taylor
article published at VDARE. Taylor organizes a yearly conference, which is among the most well
attended white nationalist gatherings.

Following Hurricane Katrina in 2005, Taylor wrote, "Blacks and whites are different. When blacks are
left entirely to their own devices, Western civilization — any kind of civilization — disappears." This
sentiment resonates with one of Krikorian’s most infamous remarks made after the devastating 2010
earthquake in Haiti. In the ensuing debate around accepting Haitian refugees, Krikorian said, “My guess
is that Haiti’s so screwed up because it wasn’t colonized long enough” (his emphasis).

CIS distributed eight articles penned by Marcus Epstein, a white nationalist who pled guilty to drunkenly
assaulting a black woman in Washington, D.C. in 2007. Epstein was a key member of the now-defunct
white nationalist student group Youth for Western Civilization (YWC). CIS also circulated three articles
from the YWC website.

Six articles written by the notorious Norwegian anti-Muslim blogger Peder Are Nøstvold Jensen who
writes under the name “Fjordman,” were also circulated by CIS in its weekly emails. Fjordman was cited
over 100 times in the manifesto of racist mass murderer Anders Behring Breivik, who killed 77 people in
Norway in 2011.

In 2008, CIS circulated an article in Taki’s Magazine from white nationalist Richard Spencer — the face
of the alt-right movement — and two pieces from Spencer’s old white nationalist website
AlternativeRight.com. CIS also distributed one piece by William Regnery, the founder of the National
Policy Institute (NPI) the white nationalist think tank Spencer now runs. Regnery also founded the
Charles Martel Society, the publisher of the racist and anti-Semitic journal The Occidental Quarterly.

Our study further found that CIS shared material with its readers written by anti-Semites and Holocaust
deniers and published on some of the most prominent anti-Semitic websites. CIS circulated two articles
from the American Free Press (AFP), which carries stories on Zionism, secret "New World Order"
conspiracies, and thinly veiled vilification of American Jews and Israel.

CIS picked up four pieces authored by prominent anti-Semite Kevin MacDonald, a former psychology
professor at California State University, Long Beach who published a trilogy that supposedly "proves"
that Jews are genetically driven to destroy Western societies. MacDonald also serves as the editor to the
aforementioned Occidental Quarterly.

Yet another article authored by a white nationalist writer with anti-Semitic tendencies was circulated by
CIS. Peter Gemma spent years as the head of design, marketing, and advertising for the racist tabloid of
the Council of Conservative Citizens (CCC). Gemma once reviewed a book by British denier David Irving,
organized a 2005 speaking event for Irving and gave a speech at the denialist Institute for Historical
Review, according to the Institute for Research on Education & Human Rights. In 2000, Gemma
appeared with David Duke and Don Black, both former leaders of the Knights of the Ku Klux Klan, at an
event meant to raise money for the white nationalist British National Party, according to the same
report.

CIS also sent out a piece from Iran’s notoriously anti-Semitic Press TV. Holocaust-deniers and anti-
Semites including David Duke are regular guests on the Tehran based TV channel.

One article CIS circulated was authored by Holocaust-denier John Friend. Friend has described the
Holocaust as a “manufactured narrative, chock full of a wide variety of ridiculous claims and impossible
events, all to advance the Jewish agenda of world domination and subjugation.” Another piece CIS
circulated is from Rense.com, a site full of Holocaust-denial material which published a birthday ode to
Adolf Hitler in 2015 including lines like, “You NEVER built Jewish gas chambers,” and “You removed Jews
and their Zionist agenda from positions of power in banking, media and politics, but only after World
Zionism declared World War on Germany In 1933 and proved their hatred for the German people.” The
piece circulated by CIS refers to Jews as “predators” and includes lines like, “How come that the Jews
are so rich? Only Jews are offended by the question because they are too arrogant and insecure to
recognize [sic] that every stranger, not necessarily a Jew, is being asked from time to time who is he and
what makes him tick.”

As our analysis shows, CIS has a long track record of disseminating articles from white nationalist, and
anti-Semitic websites for a reason. That reason is that CIS, founded in part by white nationalist John
Tanton, is not some sober think tank pushing numbers, as Krikorian would very much like mainstream
press outlets to believe.
 2ac/1ar at: SPLC indict
Indicts of the SPLC are part of the far-right agenda to label all information they
disagree with as “fake news”
Coutts 17 Sharona Coutts was an investigative reporter, and Vice President of Investigations and
Research at Rewire. Coutts graduated with honors from Columbia University’s Graduate School of
Journalism, and worked for three years at ProPublica, the Pulitzer Prize-winning investigative newsroom
in Manhattan. Coutts holds a law degree, and clerked for a justice of the High Court of Australia. “Hate
Groups Attack Southern Poverty Law Center, and Some Journalists Pile On”
https://rewire.news/article/2017/09/19/hate-groups-attack-southern-poverty-law-center-journalists-
pile/

Late last Friday night, Greg Gutfeld, a presenter on Fox News, had to do something that made his face
crinkle with revulsion.

He had to apologize to the Southern Poverty Law Center (SPLC), the nation’s leading nonprofit tracking
hate groups and extremists. Most recently, the organization has also been the target of a concerted
campaign to discredit it by the very far-right groups it tracks. That campaign is being amplified by the
right-wing media, including Fox News.

“So, the lawyers here are telling me that I have to say this. I don’t really want to. But I will,” Gutfeld said,
in the one-minute spot that aired that evening —a classic time slot to broadcast news one wants to
bury.

“Last week I did a monologue on the Southern Poverty Law Center and they took issue, yes ‘issue,’ with
me, with some of the statements made on the show, including a joke, a joke, that they do virtually no
law,” Gutfeld said in a heavily sarcastic tone. “But in fact, they say they spent over $1.8 million in 2015
on out-of-pocket case costs for litigation on behalf of their clients. So we must make clear that SPLC
does in fact, quote, ‘do law,’ unquote.”

Gutfeld’s grimace-filled correction ended with another stab at the SPLC, saying that its practice of
labeling certain heroes of the far right as “extremists,” “sucks.”

As corrections go, it was grudging at best, and misleading at worst: No fair-minded viewer would have
thought Gutfeld was “joking” about the claims and innuendo that filled his earlier segment.

In it, he had repeated many of the claims that have become part of the standard line for far-right groups
attacking the SPLC: namely, that while the organization had admirable origins—fighting the Ku Klux
Klan—it has, they claim, recently lost its credibility because it has targeted groups such as the Family
Research Council (FRC) and others on the far right.

Far from being a joke, this campaign is coordinated and absolutely serious about discrediting SPLC, the
group’s president, Richard Cohen, told Rewire. He says it’s no coincidence that the attack comes at a
time when SPLC’s role as watchdog is increasingly important because of the surge in numbers and
activities of far-right hate groups, such as those that recently rallied in Charlottesville, Virginia.

“The cabal that is united against us is a combination of anti-LGBT hate groups, like the Family Research
Council, and anti-Muslim hate groups like ACT for America, and the Center for Security Policy,” Cohen
said in a phone interview. “These groups are coming after us because we’ve been effective in exposing
how they are polluting the mainstream with hate, and now they feel like they have new leverage
because they have friends in high places, both in the government and the media.”

Cohen said that the far right is using this campaign to sow the seeds of doubt about the SPLC’s
objectivity, in order to undermine the trust it has earned with the media and the public, and therefore,
to undermine its messages.

“This whole effort is part of the radical right agenda to label all information that they disagree with,
whether it be from CNN, the New York Times, or the Southern Poverty Law Center, as ‘fake news,’” he
said.

SPLC isn’t a hate group – that’s just propaganda

Snopes 17 Fact Checker, David Emery, Is SPLC a ‘Left-Wing Smear Group’ That Encourages Violent
Attacks? https://www.snopes.com/fact-check/splc-left-wing-smear-group/

CLAIM

The Southern Poverty Law Center is a "left-wing smear group" that incites hatred and violence against
conservatives.

RATING

FALSE

ORIGIN

In the wake of the shootings of U.S. House Minority Whip Steve Scalise (R-Louisiana) and three other
people at a GOP charity baseball practice session in Alexandria, Virginia on 14 June 2017, partisan news
and opinion outlets cited social media postings by the perpetrator, James T. Hodgkinson, to make the
case that he was incited to violence by the (in their words) “left-wing smear group” the Southern
Poverty Law Center (SPLC).

SPLC is a nonprofit organization headquartered in Montgomery, Alabama dedicated to “monitoring the

activities of domestic hate groups and other extremists” in the United States. SPLC publishes
investigative reports, conducts law enforcement training sessions, and provides expert analysis on hate
group activities to the media and public. A key feature of their web site is a “Hate Map” spotlighting
more than 900 groups that evince “beliefs or practices that attack or malign an entire class of people,
typically for their immutable characteristics.”

On the day of the Alexandria shootings, WorldNetDaily ran an article reporting that James Hodgkinson
“liked” SPLC on Facebook (a fact confirmed by multiple sources prior to Facebook’s deletion of
Hodgkinson’s page). The article further stated that SPLC had been “linked” to a domestic terror attack
against a conservative Christian group called the Family Research Council (FRC) five years earlier:

SPLC’s past targeting of FRC was cited in court as the impetus for an attack on the Christian
organization’s Washington, D.C., headquarters.
 The legal team at Liberty Counsel, criticizing SPLC for “falsely and recklessly labeling Christian
ministries as ‘hate groups,’” noted SPLC is “responsible for the first conviction of a man who
intended to commit mass murder targeted against a policy organization in Washington, D.C.”

“On August 15, 2012, Floyd Corkins went to the Family Research Council with a gun and a bag
filled with ammunition and Chick-fil-A sandwiches. His stated purpose was to kill as many
employees of the Family Research Council as possible and then to smear Chick-fil-A sandwiches
in their faces (because the founder of the food chain said he believed in marriage as a man and a
woman). Fortunately, Mr. Corkins was stopped by the security guard, who was shot in the
process. Corkins is now serving time in prison. Mr. Corkins admitted to the court that he learned
of the Family Research Council by reading the SPLC’s hate map.”

Similarly, the Washington Examiner ran an article stating that domestic terrorists Hodgkinson and Floyd
Corkins were “linked” by their support of SPLC:

The shooter blamed for Wednesday’s bloody attack on a Republican congressional baseball
team shared a tie with the 2012 gunman who attacked the conservative Family Research Council
in Washington.

Both were fans of the Southern Poverty Law Center.

And yet another right-leaning web site, Breitbart, claimed that in addition to labeling the Family
Research Council a hate group, SPLC “repeatedly implied” that Rep. Steve Scalise, one of the people shot
by James Hodgkinson in Alexandria, Virginia, is associated with white supremacists.

However, the implication that the Southern Poverty Law Center inspired or encouraged these acts of
violence has no discernible basis in fact. Far from being an instigator, SPLC has consistently condemned
the use of violence against any groups or persons for any reason, a stance reaffirmed in a public
statement on the Alexandria attack by the organization’s president, Richard Cohen:

The attack on members of Congress and their staffs today was a sickening and cowardly act of
terror that must be condemned by everyone across the political spectrum. Any violent attack on
our political leadership is an attack on our democracy.

We’re aware that the SPLC was among hundreds of groups that the man identified as the
shooter “liked” on Facebook. I want to be as clear as I can possibly be: The SPLC condemns all
forms of violence. We have worked for decades to combat domestic terrorism and violence
based on hate.

Our hearts are with those who were injured today and the families of all who have been
affected by this deplorable act. We hope and pray for their full recovery.

A “like” on Facebook, moreover, does not a link to violence make. We can conclude, based on his
Facebook page, that James Hodgkinson knew of the Southern Poverty Law Center and presumably
approved of the work they do, but beyond that there is no evidence to suggest he actively engaged with
SPLC, or even read its published materials. Nor, despite Breitbart’s implication of a connection between
Hodgkinson’s shooting rampage and comments SPLC previously made about Rep. Steve Scalise, is there
any evidence to support a link.
 2ac/1ar at: SPLC indict – lies/bias
SPLC information is highly factual and only moderately liberal
Media Bias Fact Check 17 Southern Poverty Law Center https://mediabiasfactcheck.com/southern-
poverty-law-center/

These media sources have a slight to moderate liberal bias. They often publish factual information that
utilizes loaded words (wording that attempts to influence an audience by using appeal to emotion or
stereotypes) to favor liberal causes. These sources are generally trustworthy for information, but may
require further investigation. See all Left-Center sources.

Factual Reporting: HIGH

Notes: The Southern Poverty Law Center is an American nonprofit legal advocacy organization
specializing in civil rights and public interest litigation. It is noted for its legal victories against white
supremacist groups and its legal representation for victims of hate groups. The SPLC also classifies and
lists hate groups—organizations that in its opinion “attack or malign an entire class of people, typically
for their immutable characteristics. The SPLC has been accused of having a far left bias by hate groups
and other questionable far right sources. We rate SPLC left-center in bias through reporting choices.
(8/23/2016) Updated (4/26/2017)
 2ac/1ar at: SPLC indict – transparency
SPLC has high accountability and transparency marks
Charity Navigator 17 “Southern Poverty Law Center”
https://www.charitynavigator.org/index.cfm?bay=search.summary&orgid=4482

Score (out of 100) Rating

Overall Score & Rating 85.50

Financial 79.72

Accountability & Transparency 97.00

This rating was published 10/01/2017 and includes data from FY2016, the most recent 990 received at
that time.

Why isn't this based on more recent data?

Back to Top ▲

Mission

The Southern Poverty Law Center (SPLC) was founded in 1971 as a small civil rights law firm. Today, SPLC
is internationally known for its tolerance education programs, its legal victories against white
supremacists and its tracking of hate groups. Throughout its history, SPLC has worked to make the
nation's Constitutional ideals a reality. The SPLC legal department fights all forms of discrimination and
works to protect society's most vulnerable members, handling innovative cases that few lawyers are
willing to take. The SPLC Intelligence Project monitors hate groups and tracks extremist activity
throughout the U.S. To combat the causes of hate, SPLC in 1991 established Teaching Tolerance, an
educational program to help K-12 teachers foster respect and understanding in the classroom.
 2ac/1ar at: SPLC indict – money
Their CEOs take in less money than most other nonprofits
Mattison 18 Lynne Mattison is a retired health care administrator who worked in Minnesota, Montana
and Idaho. She’s lived in Boise since 2000. Unfair criticism of Southern Poverty Law Center: Hate speech
often leads to violence. BY LYNNE MATTISON PRINT ORDER REPRINT OF THIS STORY April 27, 2018 08:55
AM http://www.idahostatesman.com/opinion/readers-opinion/article209974399.html

As a supporter of and donor to the Southern Poverty Law Center, I object to the tone and contents of
Sven Berg’s article in the April 22 Idaho Statesman. Berg takes issue with the SPLC’s designation of hate
groups; he suggests that “hate group” is synonymous with “violent.” A refutation of this is included in
the article. The director of SPLC’s Intelligence Project is quoted: “People are often critical of us and say,
‘You shouldn’t put nonviolent groups on the list.’ The problem for us is the ideology of the nonviolent
groups often ends up justifying violence, right?” Right. We have all seen that hate speech often leads to
violence.

Berg insinuates that there is something wrong with Morris Dees and Richard Cohen making salaries of
$350,000. First, both Dees and Cohen could make much more money as lawyers in the private sector.
Instead, they have chosen to work for a nonprofit which takes legal cases that private firms will not
accept. Second, if Berg were to check the top salaries of CEOs at nonprofits in the United States, he
would find that many CEOs earn significantly more than Dees or Cohen. For example, Wayne LaPierre,
CEO of the National Rifle Association, earned $1,422,339 in 2016. The CEO of the Shriners Hospitals for
Children earned $461,498 in salary; with additional benefits, his total compensation was $1,196,800.
Evaluating the appropriateness of CEO compensation needs to occur in context; Idaho has a per capita
income rank of 44 in the United States, so salaries outside of Idaho may be seen as excessive.

It was interesting to me that Berg omitted any mention of the “Teaching Tolerance Project” which
provides teachers throughout the United States with materials at no charge. Hundreds of Idaho teachers
use these materials. It should be noted that teachers everywhere are reporting increased incidences of
bullying and hate speech in classrooms since the election of Donald Trump.

Instead of criticizing SPLC for the size of its endowment and the compensation of its top executives, we
should be grateful that there is an organization working tirelessly (and often thanklessly) to improve
civil rights and social justice.
at: author indicts
 1nc at: hate groups
SPLCs claim that FAIR and other groups that write against immigration are “hate
groups” is false and derails merits-based debate
FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf

The debate about U.S. immigration policy is a difficult and often emotional one. In recent years, a new
component has been added. Shifting focus away from a debate based on the merits of various policy
options, some of those advocating higher levels of immigration and amnesty for illegal aliens have
resorted to attacking and impugning the motives of their opponents.

The largest and most prominent immigration reform group to come under attack is the Federation for
American Immigration Reform (FAIR). The basis for the attacks against FAIR is a report by the Southern
Poverty Law Center (SPLC) that designates FAIR as a “hate group.” This single report serves as the
cornerstone of a relentless assault by the mass immigration and amnesty lobby against FAIR and other
organizations that promote immigration reductions and enforcement of our immigration laws.

In the eyes of the law, there is no such thing as a “hate group.” 1 It does not exist in federal statutes. It
is a term entirely concocted by the SPLC. Moreover, the SPLC itself has no concrete definition. While
lacking any useful specificity, the SPLC nonetheless deliberately uses this highly charged term to achieve
political ends and to create an illusion that there is a surge of dangerous groups operating in America in
order to increase the SPLC fundraising. In the process, the truth gets lost, reputations are damaged,
and meaningful discourse on immigration policy is muted.

It is therefore essential that we thoroughly examine and respond to the charges and the motives of
those leveling the accusations. This publication is designed for the media, legislators and others who are
actively involved in writing about or formulating immigration policy. Its purpose is to provide:

• An overview of the unscrupulous tactics now being used in the immigration debate which distort
factual reporting and limit meaningful debate.

• A summary of FAIR’s 30-year record of advocacy on immigration.

• An examination into the SPLC’s motives, terminology and techniques used against FAIR and others.

• An objective third party analysis of the SPLC’s tactics and motivations.

• Conclusions and suggestions for fair reporting and open mindedness.

This publication also highlights the journalism profession’s own principles for reporting accusations
made against individuals or organizations, as the news media are the primary tool in the SPLC’s effort to
discredit FAIR. However, we believe these are excellent guidelines for anyone researching immigration
policy or evaluating FAIR.

FAIR is certified and accountable. The SPLC isn’t

FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf
FAIR is a nonpartisan organization supported by a broad based membership, a range of foundations, a
diversified funding base, and a strong, professional staff. Our Board of Directors and National Advisory
Board are comprised of highly respected and nationally-known Republicans, Democrats and
Independents. FAIR is also one of the very few charities in the United States certified by the Better
Business Bureau as meeting all of its giving standards for a charitable organization, highlighting
management, honesty and re-sponsibility. By contrast, the SPLC has been singled out as an organization
that fails virtually every standard for accountability as a charitable nonprofit corporation.

FAIR also has a reputation of transparency, objectivity, and credibility with the national news media.
The New York Times, Wall Street Journal, Washington Post, CNN, Fox News, MSNBC, and National Public
Radio are several examples of the elite news organizations that rely on FAIR for information,
commentary and analysis. These highly reputable news organizations, employing some of the
profession’s most experienced journalists, would have long ago turned up any nefarious agenda of
FAIR—if one truly existed. The reason FAIR’s views are widely sought all across America is because our
work is informed by facts and our approach to immigration policy is responsible and temperate.

Even the highest levels of government recognize and rely on FAIR’s work. Members of the Democratic
and Republican leadership, as well as committee and subcommittee chairmen have invited members of
FAIR to testify on the issue of immigration on nearly 100 occasions. The expertise of departments in our
organization has been repeatedly tapped by congressional offices of both parties. Among the many
members of Congress who have sought FAIR’s input and assistance is the current Senate Majority
Leader Harry Reid, who worked closely with FAIR to formulate legislation in the 1990s. Senator Reid has
since changed his stance on immigration policy, but he has never questioned FAIR’s motives or integrity.

Unlike many of the groups attacking us, FAIR is a membership organization that raises a considerable
share of its operating budget through voluntary membership dues. Currently, FAIR has over 250,000
members and supporters nationwide. Our membership base is made up of Americans of all ages, races,
religions, ethnic groups, income strata, and cuts across political ideological lines. In addition, FAIR has
received and continues to receive support from charitable foundations that are among the most
respected in the nation.

FAIR offers complete organizational transparency for any and all interested in knowing the full scope of
our operations, our publications, our staff and our mission. We stand by our record and invite the
media, scholars and the public to scrutinize it.

Even groups that oppose FAIR and CIS agree – SPLC’s hate group argument is just
political
Silverstein 10 Ken Silverstein, founder of CounterPunch and former journalist at the LA Times, AP,
Mother Jones, Washington Monthly, The Nation, Slate, and Salon. “Hate,” Immigration, and the
Southern Poverty Law Center https://harpers.org/blog/2010/03/hate-immigration-and-the-southern-
poverty-law-center/

I spoke at a panel last week sponsored by the Center for Immigration Studies (CIS), a conservative group,
about its new report on the Southern Poverty Law Center. The report examines the efforts by the Law
Center “to smear the Federation for American Immigration Reform and, by extension, the Center for
Immigration Studies.”
For the record, I am totally opposed to CIS’s stance on immigration, as I stated at the press conference.
I accepted the invitation to speak on the panel because it came from my friend Jerry Kammer, of whom I
am a big admirer.

I also agreed to the invitation because, much like CIS, I feel that the Law Center is essentially a fraud
and that it has a habit of casually labeling organizations as “hate groups.” (Which doesn’t mean that
some of the groups it criticizes aren’t reprehensible.) In doing so, the SPLC shuts down debate, stifles
free speech, and most of all, raises a pile of money, very little of which is used on behalf of poor people.
 2nc ext. FAIR doesn’t discriminate
FAIR doesn’t discriminate
FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf

FAIR condemns any individual or group that engages in hateful or violent behavior, and has done so
publicly on many occasions. While FAIR has been consistently critical of many aspects of U.S.
immigration policy and long-term failures to adequately enforce immigration laws. We have a
longstanding abiding policy of never advocating discriminatory immigration policies. If the record
proves anything at all, it is that FAIR draws a clear distinction between immigration policy and
immigrants. Immigration is an important public policy that can and must be debated openly; immigrants
are human beings who must always be treated with respect and dignity.
 2nc ext. politically motivative
Claims that FAIR is a hate group are politically motivated and unsubstantiated
FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf

Other left-leaning amnesty groups began echoing Muñoz’s allegation, at which point the SPLC
capitalized on the growing sentiment by claiming that FAIR was a “hate group.”2

This single SPLC claim has become the centerpiece of the amnesty lobby’s campaign against FAIR and
other immigration reform organizations. Despite being entirely opinion-based, politically motivated,
and driven by a need to make their mission appear more urgent, the SPLC “report” has become a
breeder document from which these unsubstantiated accusations recycle their way onto blogs and
sometimes even into the mainstream press under the guise of “news.”

Although FAIR was the target of this recent and particularly vicious attack by the SPLC, it was not the
first time the organization had used these tactics. While disavowing any position on immigration policy,
the SPLC has for nearly a decade targeted organizations and individuals who support immigration
enforcement and reductions in overall immigration to the United States. In countless articles and
“investigative reports,” the SPLC concluded that just about everyone actively opposed to amnesty and
mass immigration was a “nativist” a “white supremacist,” or had ties to such groups and individuals.
These claims, absurd and unsubstantiated as they were, became even more exaggerated when other
groups also began using them. Replicating the SPLC tactics, the National Council of La Raza, made the
ridiculous assertion recently that one in seven Americans (45 million people) belong to hate or
extremist groups.
 2nc ext. shuts down debate
There are issues with immigration – claiming anti-immigration arguments are hate
makes dialogue and debate impossible
FAIR 12 FAIR, the Federation for American Immigration Reform. Hate Crimes December 2012
https://www.fairus.org/issue/societal-impact/hate-crimes

Background

Special interest groups backing amnesty for illegal aliens under the guise of 'earned legalization,' or 'a
pathway to citizenship' have been frustrated in achieving their legislative goals in Congress. In response,
they have increased their attempts to discredit their opponents. Amnesty proponents have long tried to
brand their opponents as being 'anti-immigrant.' These politically motivated attacks ignore the fact that
illegal immigration is an entirely separate issue from legal immigration. The Washington Post, which
ordinarily sides editorially with defenders of illegal immigrants, has recognized that persons opposed to
that position are not against immigration. The newspaper's Ombudsman in a commentary in the March
2, 2008 issue chided the editors for failure to uphold their own policy against such references, stating,
"A few 'anti-immigrant' references have popped up in recent stories and shouldn't have." 1

The Southern Poverty Law Center has asserted that organizations that call attention to negative aspects
of illegal immigration are guilty of 'hate speech.' 2 That claim has been echoed by advocates for illegal
immigrants such as the National Council of La Raza. This is in effect a scolding that if you can't say
something nice about illegal aliens you shouldn't say anything at all. This campaign, which has recently
targeted major broadcast news media, is a veiled attempt to censor opposition to their policy
objectives. It also is an attack on the role of an informed citizenry in the operation of a democratic
society. Another assertion these organizations throw at their opponents is that drawing attention to the
problem of illegal immigration has led to a surge in 'hate crimes.' 3 That is a serious allegation and
merits a serious look at the facts.

Prevents real debate

FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf

Those who are committed to free and open debate about important policy matters must also deplore
the indiscriminate use of an inflammatory term such as “hate group” directed at FAIR or any other
responsible individual or organization committed to reforming our immigration policies for the public
good. In the absence of a clear definition, the SPLC has been free to engage in the odious habit of taking
legitimate organizations with which they disagree, calling them hate groups, and then mixing them in
with despicable and truly dangerous groups like the KKK, insinuating comparable status. This practice is
fundamentally unfair and unconscionable.
 2nc ext. SPLC indict
No one trusts SPLC anymore
C-Fam No Date The Truth About SPLC https://c-fam.org/home/the-truth-about-splc/

The good news is that many are waking up to the Southern Poverty Law Center. The FBI used to partner
with them in identifying hate groups. They no longer do. The Army used to have them lecture on
domestic terrorism. The Army has ended that relationship.

Below you will find a powerful video exposing the Southern Poverty Law Center and their stated goal of
destroying their political opponents. You will also find many essays and articles about this nefarious
group, including articles from left-wing groups who are also concerned about the tactics of the Southern
Poverty Law Center.

The SPLC has been discredited

FAIR 17 A Guide to Understanding the Tactics of the Southern Poverty Kaw Center in the Immigration
Debate. https://www.fairus.org/sites/default/files/2017-08/SPLCGuide_Final.pdf

Conclusions

The SPLC and its allies’ attacks against FAIR have no basis in fact. FAIR’s 30-year record speaks for itself.
That record is incontrovertible: FAIR’s views and advocacy on immigration matters are motivated by
legitimate concerns about the impact of mass immigration on the United States and nothing else. FAIR
represents mainstream views that are shared by the majority of Americans.

The attacks against FAIR’s reputation are politically motivated. The SPLC, upon whose designation the
attacks against FAIR are predicated, has a long and well-documented history of using baseless claims to
raise money. FAIR has long impeded the open borders and amnesty lobby from being able to achieve its
political goals. Having repeatedly failed to convince the American public that higher levels of
immigration and amnesty for illegal aliens will be beneficial to the nation, they have turned to the time-
tested tactic of smearing their opponents.

The source of the attacks against FAIR, the Southern Poverty Law Center, is a thoroughly discredited
organization. The operation and tactics of the SPLC have been investigated by independent journalists
working for established magazines or newspapers over the course of 13 years. All came to almost
identical conclusions:

1. The SPLC exaggerates and fabricates hate as a fundraising tactic.

2 The SPLC misrepresents itself as an advocate for victims of bigotry or racism. The organization
does little or nothing to help the victims and instead lines its own pockets with the money that it
raises or wins in legal settlements.

3. The most extensive investigation of the SPLC concluded that the organization itself is riddled
with institutional racism.

The SPLC offers no objective criteria for the “hate group” designation. The SPLC assigns the “hate
group” designation based on their own vague, subjective, and politically motivated criteria. The SPLC’s
accusation against FAIR is based entirely on its own inference of motive and casual, even incidental,
associations.