Foreign aid, it has been said, is the process of stealing money from poor people in rich countries, and giving it to rich people in poor countries. Something similar can be said about GOP presidential front-runner Donald Trump’s proposal to fund his border wall scheme. Reduced to its essence, Trump’s plan is to steal money legally earned by Mexicans living in the United States in order to blackmail the Mexican government into taxing its subjects to fund a public works boondoggle in the United States.
In effect, Trump wants to compel poor Mexicans to provide foreign aid to wealthy, well-connected U.S. corporations.
On countless occasions, Mr. Trump has called for the creation of a 1,000-mile, 80-foot-high, concrete and Rebar fence on the U.S.-Mexican border – and insisted that Mexico would pay for its construction. This proposal has become his signature issue, and mention of it by the candidate during campaign rallies will induce a rapturous response from the audience. When Mexican luminaries – such as former President Vincente Fox – have emphatically stated that their country will not pay for the construction of a border wall, Trump has smugly taunted them by insisting that “The wall just got ten feet higher.”
While it plays exceptionally well as political performance art, Trump’s proposal suffers from a host of practical difficulties, the most obvious of which is this: How would the government of the United States compel a nominally friendly neighboring country to pay for a border wall? He has often made reference to using Mexico’s trade surplus to pay for its construction, which would only make sense if that surplus actually existed in the form of an account or trust fund to which the United States has access – and it doesn’t.
After the Washington Post demanded specifics from Trump, his campaign sent a two-page document outlining an approach that should cause misgivings in even some of his most ardent supporters.
Section 326 of the so-called PATRIOT Act, also called the “know your customer” provision, requires financial institutions to obtain identity documents before opening accounts. Trump would use an executive order to expand that provision to apply to Western Union and similar wire-transfer businesses, and redefine “accounts” to include remittances to Mexico.
An estimated $25 billion in remittances are sent to Mexico each year. Trump insists, without providing evidence, that “the majority of that amount comes from illegal aliens.” An analysis by the Government Accounting Office in January acknowledged that it is impossible to determine how much of that amount is provided by illegal immigrants, as opposed to those working legally in this country.
In either case, money itself was honestly earned by Mexican employees of private businesses in the United States, and it accounts for a substantial portion of Mexico’s GDP: Last year, remittances from overseas eclipsed oil revenues. Tens of millions of Mexican families depend on that money for subsistence.
Within the first days of his presidency, Trump would present Mexico with what can only be described as an extortion demand: Make a “one-time payment” of $5-$10 billion to build the wall (given that reasonable cost estimates are much higher, that amount will probably grow, as well), or the US government will shut down remittances and Mexican citizens will starve.
The Trump Campaign’s position paper on this subject refers to remittances as “de facto welfare for poor families in Mexico.” But money earned through private employment is the opposite of welfare. The same cannot be said of the money that would be lavished on the corporate contractors who would be involved in the largest and most pointless government construction program since the Pharaohs conscripted slave labor to build the pyramids. The contractors involved in that boondoggle would be welfare parasites engaged in a Keynesian make-work project orders of magnitude greater than any of the “shovel-ready” stimulus initiatives that were mocked by the same Tea Party constituency now applauding Trump’s border wall proposal.
Trump’s policy positions are generally riven with internal contradictions and burdened with economic ignorance, and his take on immigration is no exception. To compel Mexico to pay for the border wall, Trump needs to use Mexican immigrant workers in this country as hostages – yet he has also promised to construct a vast new deportation force that would locate and expel all undocumented immigrants from the country.
Ironically, companies owned by the GOP frontrunner have sought at least 1,100 foreign worker visas since 2000. Many of the visas were from Mexico, meaning that this unscrupulous employer would steal from his own employees to construct this asinine wall.
“They have to go – they have to go,” Trump has bellowed on numerous occasions. If his border wall scheme is to work, however, they would have to stay – at least to give him blackmail leverage against Mexico. It is exceptionally unlikely that Mexico would comply with Trump’s demand, which would mean taxing Mexicans to fund a foreign construction project that, if ever completed, would offer little more than a symbolic gesture of contempt toward the people who funded it.
The entire discussion may be academic. Stuart Anderson, executive director for the National Foundation for American Policy, told the Washington Post that Trump’s proposal would expand executive power beyond the text of the statute, and that if implemented it would immediately be tied up in litigation. On the basis of his campaign behavior, Donald Trump as president might consider this to be the optimal outcome: He could claim credit for a significant accomplishment without actually making good on his extravagant promises, while directing resentment at those who impede his designs.