You could argue that these secondary effects do not outweigh the higher cost, and I'm sure sometimes that would be true, but this is a much weaker and less general argument.
The money will still be spent in your own economy. The choices are threefold:
My preferred scheme (1): Low income taxpayers keep $30k and spend it themselves. Government pays for $70k from lowest bidding software engineer (possibly an Indian).
Fergie's preferred scheme (2): Low income taxpayers don't get to spend $30k on themselves. Government pays $100k to a non-Indian software engineer.
My alternate scheme (3): Low income taxpayers don't get to spend $30k on themselves. Government pays $70k to some Indian software engineer and then gives $30k to some random high income non-Indian person.
Your argument does not distinguish between (2) and (3). In both cases, money is transferred from taxpayers to high income colocated workers who will presumably spend it in the economy.
Finally, I take issue with your characterization of software engineers as 'high income' - as I understand it, compared to the cost of living, they don't make that much on average. But I would welcome statistics on this matter.
I agree that this reduces wages of high income workers. That's exactly why it reduces income inequality.
There are essentially no statistics in the US which adjust income for cost of living. Do you criticize all income inequality arguments on this ground, or just this one?
The majority of the money saved from those wages would be transferred to the managerial classes (execs, etc.) and shareholders, making income inequality worse:
http://www.forbes.com/2004/08/31/cx_da_0831topnews.html
Income inequality isn't high because people who work for a living are earning too much.
Also, you're ignoring the national security implications of the thing. We cannot afford to be dependent on a foreign country for high tech skills. That's one reason why protectionism makes sense. As a country, we're willing to pay extra for certain basic manufacturing/services to stay in the county, such as aerospace repair and steel manufacturing, in case we ever become hostile with some other country.
You're describing a scenario where the relationship between the countries becomes so hostile that we have to worry about what happens if one of us cuts off the flow of talent. But what we should really care about is making the flow of talent so voluminous and indispensable to both nations that relations cannot deteriorate to that point. That's real national security.
Relying on other nations is the exact opposite of national security and it's naive to think that they will be by our side when shit hits the fan. We've seen too much in the last hundred years to leave our most critical industries to chance.
Only importing immigrants who have political views that agree with yours? A country has a particular culture and set of views. Why would we want to import people from countries with inferior living conditions and follow the way they do things? There's a reason they left.
As for why let people in from poor countries, because we are siphoning off the most educated and ambitions people from that country, who bring their drive and good genes to our country. It's the same reason Asians, who consist of the top people in their home countries who chose to came here, do better in the US than blacks, who were brought here by slavers.
What part of the point "let people in from poor countries, but don't let them keep doing things the way they were doing them" is not clear? Sure they want to move here, don't let them turn this place into the place they left by making them learn the language and culture.
>It's the same reason Asians, who consist of the top people in their home countries who chose to came here
That is an incorrect statement. Most asians who first came to america were imported as cheap labor to compete against Irish unskilled labor. The Polish, Irish, and Italian who came to the states were definitely not the best and brightest, but because they assimilated and learned the culture prospered.
That has not happened in the history of mankind. Talent moving around is rather high on Maslov's hierarchy of needs. If your country is out of arable farmland, clean water, or minerals, you will start looking around for places to get those materials.
If they will not trade for them, generally you invade.
What does this have to do with anything? We're talking about resource wars. You can kidnap talent. Look at the origin of the term "shanghaied" and the British impressing American seamen.
> Today, that sounds like a much better option than a war of conquest.
You're not getting the point. Most nations can do without talent. Talent is willing to cross borders, depending on who's winning.
What nations cannot do without is food, minerals and water. Those are definitely zero sum games. Unless you're able to defend your goods with force or there is an abundance of them, they will be taken away from you.
One distinction is that many immigrant workers will be sending money back to their family in their home country, resulting in a net drain on the economy in which they're working.
I'm not saying this is a good reason to make life harder for them, but I do think it's a fair point.
The problem is that most American exports are luxury goods (even in agriculture) and when you come from a poor country where a few hundred dollars makes a huge difference, those exports will account for a tiny amount of the capital sent there. There are many long tail benefits but I doubt they are quantifiable enough to say that the drain from remittances is anywhere near break even.
Edited to add: my family doesn't even need the money, despite having health conditions that would economically cripple someone in the US without the best insurance. Salary + pensions + free education and healthcare are enough to survive so most of the money I send them are to give them breathing room and spending money. I think half of what I send them gets spent on spoiling the younger family members and the rest goes into a rainy day account. The only time they "spend" on American products is when one of us in the US buys them iPads/iPhones (on top of the remittance) as gifts on one of our visits and they buy a $5 game twice a year for the kids to play.
That said, if Americans knew how much of the >$100 billion remittance market went to buying little kids books, candy bars, sports equipment, and board games, they'd think the money was worth all the happiness it brings.
In other words you are valuing the $128 billion US remittance market at $0.
It's not equivalent at all. All taxpayers would now be on the hook for that 30k rather than just the corporations who pay for that labor.
You can't hand-wave away where this money comes from.
“This is the United States government. First of all, you never have to default because you print the money, I hate to tell you, OK?”
You could break it. It's not immune to the hyperinflation that's hit other currencies.
Historically, the only other proposed option was the EU and much as been made about unsustainable financial policy there (many allege these issues are overblown to help discredit the notion of a strong Euro, but that's neither here nor there). But now we're starting to talk about creating to-order currencies with arbitrary properties, guaranteed supply limits and curiously popular ownership policies.
While governments will never give up the power to mint their own currency, it's not unimaginable that in 10 years some some countries will seriously consider participating in a digital reserve.
Foreign workers need full payment of competitive market rate wages as well as the ability to fully maneuver in the marketplace so that they can act in their own best interest. It's already hard enough for them coming to the US with less competitive skillsets, but if they could bargain freely, they could at least earn market-rate wages in their skill range and grow their careers organically.
Here's an alternate proposal. Suppose it would cost $70k for the wrong type of people to provide labor, and $100k for the right type of person to provide labor.
Lets continue having labor sold by the lowest cost provider. But then lets engage in direct wealth transfers; we'll have the government directly send $30k to the high income software engineers who might have been able to do the same job less efficiently.
This is a more or less equivalent scheme to transfer wealth from taxpayers to high income people. Do you have any objection to this scheme? If so, why does your objection not apply equally well to your protectionist scheme?