In short, here is the process. It is much alike to trade with high population, low capital spending per capita countries precisely because of the effects on the return to capital under an increasing working-age population. Like free trade, rapid immigration increases the working-age population. A rapidly increasing working-age population quickly leads to a lower true return on capital.
- Wages come from the return to capital.
- Wages set all other prices.
- Increasing the working-age population faster than the return to capital rate makes true wages fall (not current dollar wages).
- When real wages fall, true prices fall (not current dollar prices).
- When real prices fall, the true returns to capital fall.
- When the true returns to capital fall, future capital investment falls.
- When future capital investment falls, future returns will be lower and thus future wages will be lower.
- In order to maintain profits by maintaining productivity, firms must increase the working-age population.
- And with that, we return to Step 3.
This is where the USA has been for awhile now. This is why true wages continue to fall. Congress exacerbates the capitalism death whorl by importing over a million low-skill/no-skill immigrants a year and doing nothing about the millions of illegal alien low-skill/no-skill immigrants already in the USA.
Instead, excessive immigration, both legal and illegal, continues to suppress wages. Falling wages continue to fuel the capitalism death whorl. We have been experiencing it for awhile.
Housing bubbles and Internet bubbles can only hide the death spiral for so long. Those bubbles burst.
True wages and true capital spending flow in lockstep. True wages have been falling for years in lockstep with true capital spending per prime age worker, those between 25 and 54. And capital spending has been falling because of the flood of immigrants swelling the working-age population.
So What Should President Trump and Congress Do for Authentic U.S. Citizen Americans?
- Kick out the illegals.
- Restrict immigration so that foreign-born population never, ever should exceed 5% of total population.
- Never give a foreigner a resident visa unless that foreigner has an IQ of at least 115.
Neoliberalism / Globalization Kills
The neoliberals / globalizationists literally are destroying the USA and the livelihoods of Americans as well as future Americans by pursuing the folly of unfettered free trade with high-population, low per capita capital spending countries while simultaneously needlessly growing the USA working-age population.
It is one thing to have free trade with foreigners whose per capita capital spending is the same as your own country, but it is altogether something else to have a borderless country with unlimited welfare funded by taxes borne by those who can not escape paying taxes with offshore corporate headquarters in Ireland.
Why should you pay taxes to Congress if Congress is going to help foreigners who will become your job competitors and whose offspring will become your children's competitors?
If Americans do not stop this scam, working-class Americans will become as poor as Hindians or Chinamen. This scam is called globalization.
For more on how immigration contributes to the capitalism death whorl of the USA, see
- CURTAILING IMMIGRATION MAKES CAPITALISM WORK. ECONOMIC ILLITERATES VERSUS PRESIDENT TRUMP'S IMMIGRATION REFORM PLAN.
- THE H-1B ANTI-CAPITALISM MORON.
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