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Colleen Hroncich

“The more that I, as a parent, learned about Charlotte Mason principles, the more I realized that this woman was way ahead of her time,” says Andy Zawacki, Head of School at Arborbrook Christian Academy in Charlotte, North Carolina.

Arborbrook was founded in 2005 by four homeschooling families who wanted a Charlotte Mason-based education for their own children and others in the area. In the first year, it served 40 students K‑8, mostly homeschoolers. The school grew rapidly, both in enrollment and grades offered. By the fifth year there were 170 students in grades K‑11. “We’re at 270 students now without much room for more growth,” says Andy. “We currently have two sections of every grade in K‑7 and one section in the upper school, grades 8–12. But that trend is continuing, so K‑8 next year will have two sections. We’re looking to build a building to accommodate the growth.”

In the lower school, which includes grades K‑6, they have what they call Alpha and Omega time where they start and end their days with God. On Mondays and Wednesdays, they start with classroom devotions and prayer time. On Tuesdays and Thursdays they have assemblies. The classes rotate sharing about the chosen theme on Tuesdays and Andy generally shares a message building off that on Thursdays. Omega time at the end of each day for K‑6 is Bible class so they receive that right before they head home.

In between Alpha and Omega time, the day is full of short, fast-paced lessons. “We’re not rushing them, but we are moving them from subject to subject, special to special, ideal to ideal to give them a very robust feast throughout the school day that is all laced in the Charlotte Mason philosophy of education,” Andy explains. 

Arborbrook includes the academic coursework and enrichment classes that parents expect in a private school. But it’s the nature component that makes the school unique in the area. “As a Charlotte Mason school, this is part and parcel of her philosophies. Get children outside, get them learning, get them in the dirt, help them make observations,” says Andy. “We have a fantastic nature studies program where they’re growing their own gardens, they’re reaping the harvest from those, and having a salad party.”

The upper school, grades 7–12, follows a block schedule with Monday/​Wednesday classes and Tuesday/​Thursday classes that meet for 90 minutes. They have core subjects of math, English, history, science, and Bible. The other classes vary by grade. In junior high, they have a specials block and a writing workshop based on Charlotte Mason principles. High school juniors and seniors can take dual enrollment courses that give them high school and college credits.

There are also required classes meant to prepare students for life after high school. For example, freshmen take a special PE/​health class that combines practical, hands-on skills training and classroom instruction to provide basic foundational life skills in the area of fitness and health. Sophomores take a Christian leadership class with Andy. Juniors have a junior seminar class to walk them through the college application process. And seniors have an advanced apologetics class that Andy says includes “subjects not yet covered that they need before they launch out into the world.” 

On the dual enrollment front, Arborbrook has a rather unique program. Andy had a previous relationship with Ocean County College, a community college in New Jersey, so he asked them about partnering for dual enrollment. “We get certified as professors by the college, and we teach the courses embedded into our program here. So the students get college credit and high school credit while they’re here. They can graduate with 33 or 36 college credits just taking courses here. They also have online courses that they can take if they want,” Andy explains. The college already ran similar programs with local high schools, but Arborbrook is their only extension partner so far.

According to Andy, the North Carolina Opportunity Scholarship is helping Arborbrook families. Last year, the legislature made the program universal, meaning every North Carolina family is eligible to apply. Scholarship amounts are higher for lower-income families. However, under current funding levels, there is a waitlist of around 55,000 students who did not receive scholarships due to lack of funding. As funding increases, “that will be a big game changer for our school as a whole and I think every private school,” Andy says. “I never thought I’d see the day, but here we are on the precipice of it. That will be a tremendous blessing and change for our families.”

Andy is thankful that he found Charlotte Mason and has seen the fruits of the model in his own children. “I encourage parents to exercise your freedom to be able to find things that are out there that really resound with you as an educator or as a parent for your children’s education,” he says.

Marc Joffe

In recent posts, I have looked at costly light rail projects in Austin and Minneapolis whose sponsors are seeking federal funding. Not to be outdone, Los Angeles has its own high-cost LRT extension in the Federal Transit Administration’s (FTA) grant pipeline. A change of administration is a great time to reevaluate these projects because they usually don’t pencil out under reality-based cost-benefit analysis. And even if they did pencil out, we’re still left with the question of why local transit agencies should be able to access billions of dollars from federal taxpayers to fund their initiatives.

LA Metro’s proposed Southeast Gateway Line is projected to cost $8.7 billion of which $3.7 billion would come from federal taxpayers. Relative to some other recent rail projects, which are clocking in at over $1 billion per mile, Southeast Gateway is a bargain at “just” $600 million for each of its 14.5 miles.

But the benefits Angelinos will get for the $8.7 billion expenditure are questionable. A ridership study conducted for the project’s Environmental Impact Report estimates that the line will carry just 31,000 on weekdays in 2042.

But these estimates are based on a pre-COVID-19 model. At the time that model was run, state demographers expected Los Angeles County’s population to reach 11.1 million in 2042. But the county suffered a large population decline during the pandemic, and forecasters have become more bearish on population growth. Their 2042 population forecast for Los Angeles County is now only 9.7 million.

Further, the propensity to use transit has fallen since COVID-19 due to the rise of remote work and concerns about safety on buses and trains. Between lower population and less willingness to use transit, it is likely that an updated modeling exercise will yield a significantly lower ridership projection.

But even if the projection of 31,000 rides per day could be achieved, it would be well within the capacity of Bus Rapid Transit (BRT), a much less expensive alternative to light rail. According to an FTA brochure, BRT has an hourly capacity of 10,000–30,000 passengers—well above what LA Metro would expect for peak-hour service on the Southeast Gateway Line.

It appears that the last time LA Metro considered BRT for the new line was way back in 2012, when the agency concluded that the alternative would provide insufficient capacity. But now that the required capacity is lower and BRT has further evolved, this option should be reconsidered.

Not only is BRT far less expensive than rail, but it can also be completed more quickly, providing transit users a new option earlier than would be the case with LRT. Further, BRT may have less impact on motorists if cars share the bus lane at certain times of the day along some or all portions of the route.

Before moving forward with such an expensive transit project, local and federal officials should revisit the BRT alternative for the Southeast Gateway. And, more generally, the new Administration and Congress should ponder whether we should even have federal transit grants at all.

Joshua Shifrinson

Should seeking to prioritize threats to US national security disqualify officials from leading policy positions? The campaign underway to prevent former Assistant Secretary of Defense Elbridge Colby from gaining a senior position in the Trump administration certainly suggests so. Colby made his name in the first Trump administration working to reorient US defense policy toward competition with China, an effort that has since become widely embraced across the political spectrum. Since then, he’s continued to argue for rigorous prioritization of a US grand strategy to handle great power competition with Beijing.

All of which is to say that his views are anathema to those who would prefer the United States embrace the sort of neoconservative primacy that informed much of US foreign policy over the last three decades. Most directly, Colby has come under criticism over the previous 48 hours by unnamed sources for supposedly being soft on Iran (and insufficiently pro-Israel). The evidence behind this claim is weak: consistent with his calls to focus on China, Colby has argued that a nuclear Iran could be deterred and contained, and, thus, the United States need not threaten war with Iran for the sake of stopping Iran from going nuclear. Still, the pushback has been pronounced. As one unnamed source put it, “I don’t know how you how you put a man who says he’s OK [sic] with Iran having a nuclear weapon in charge of any serious defense or national security job.”

There is something amiss here. To be sure, Colby himself may be overstating the China threat; we should not take his views as writ. Still, after three decades of American adventurism in the Middle East, mounting budget deficits, demands for domestic investment in the US, and a growing recognition that—so far as the US faces external threats—China is the pacing candidate, it is telling that Colby is being attacked for…trying to integrate US ends and means. Once again, it reminds those of us calling for a prudent, sustainable, and—above all—realist strategy that neoconservative primacy will not go gentle into the good night. 

As importantly, suggesting that Colby is unreliable because he accepts that deterrence and containment can hold vis-à-vis Iran reveals a stunning inability by critics to reflect on the United States’ own experience. Not only did deterrence and containment thrive against adversaries such as the Soviet Union and Cold War-era China, but the alternative—risking war for the sake of Tehran’s denuclearization—echoes the sort of politicized analysis and strategic myopia that led to the Iraq War. 

If critics of a strategic course adjustment want to make the case for continued American adventurism, they should at least have to grapple with facts, evidence, and the failures of their own prior policies.

Ultimately, to commit to keeping war with Iran on the table the litmus test for senior positions amounts to a kind of McCarthyism that poorly serves US national interests. Colby may not be the right voice to lead on China. Still, to spike his suitability for office for trying to avoid US adventurism against a middling adversary when other options are on the table would be the height of folly. 

As the Trump administration staffs up, it should avoid filling its ranks with the same hawks and primacists that drove US strategy over the last three decades, at a time when the United States’ margin for error in world affairs is not what it was even ten years ago.

Clark Packard

Mustafa Akyol

Once in a while a new book in religious studies comes out with a bold thesis, challenging old assumptions and raising some eyebrows. The Islamic Secular, a thick, dense, and elaborate monograph by Sherman A. Jackson, distinguished professor of religion at the University of Southern California, is one such book that deserves attention—by both Muslims and others who are interested in the destiny of Islam.

For many people, including Muslims themselves, the terms “Islamic” and “secular” appear contradictory, and their amalgamation would coin only an oxymoron. But Jackson carefully makes sense of what he means by “the Islamic Secular”: that Islamic law, namely the Shari’ah, does not cover all the vast areas of human experience and knowledge, leaving many spaces that are “secular,” where Muslims can still act and think with a religious ethos.

Now, that is an important argument. But it still leaves us with many questions about the Shari’ah itself, such as religious coercion. Could this actually be a good thing, as Jackson seems to argue in a provocative chapter of his book? Or should we separate Islamic law from the state, so religion is based on free choices of individuals, as another scholar of Islamic studies, Abdullahi Ahmed An-Na’im, has argued?

I probed these questions in a book review I wrote for Religion & Liberty Online, a publication of the Acton Institute. I fully agree with An-Na’im that the best medium for practicing Islam is not an “Islamic state” but a secular state that grants religious liberty. And while I disagree with Jackson on that big question, I appreciate that his book points to some “seeds of freedom” that can help us make that argument. 

You can read the whole review here: “The Islamic Secular and the Seeds of Freedom”

David J. Bier

President-elect Trump is promising to slash both legal and illegal immigration during his second term in office. He also wants to deport millions of immigrants who have entered the country illegally, as well as those who have come legally in recent years (through a lawful process known as parole). In this post, I review the data on what we know about America’s new immigrants.

As of March 2024, the Current Population Survey Annual Social and Economic Supplement (ASEC) records that 7.6 million immigrants who entered since January 2020 were living in the United States (excluding those in “group quarters”). Although it is not possible to exclude the 2020 cohort, this group primarily includes immigrants who entered during the Biden administration. Nearly half of these immigrants, 3.7 million, were already employed by that time, while 4 percent were unemployed. Another 21 percent were children or in high school, and 6 percent were in college. The rest were split between homemakers (8 percent), elderly (4 percent), and other groups (8 percent).

Compared to US-born Americans, immigrants were slightly more likely to be employed and more likely to actively look for a job. They are significantly more likely to be enrolled in college and much more likely to be homemakers while being much less likely to be retired. Remember that for many new immigrants, working in the United States is actually illegal, so it is remarkable that they nonetheless find jobs at such a high rate.

The share of immigrants who find jobs grows over time. By March 2024, 54 percent of immigrants who arrived in 2020 and 2021 were employed, compared to 46 percent of those who arrived between 2022 and March 2024—which was the same as the employment rate for the US-born population. According to the survey, new immigrants accounted for 78 percent of all employment growth from 2019 to 2024. On average, new immigrants are about seven years younger than the US-born population, and a majority (53 percent) are between the ages of 25 and 54, compared to only 36 percent of the US-born population.

New immigrants over the age of 25 are somewhat more likely to have college degrees than the US-born population: 44 percent versus 39 percent—but they are also less likely to have a high school degree (81 percent versus 95 percent). This bifurcation means that they are even more likely to be complements rather than substitutes for US workers. Furthermore, employed immigrants had about the same average wage and salary income as their US-born counterparts.

New immigrants tend to work in different jobs compared to the US-born population. For instance, they are 511 percent more likely to work in production jobs and 95 percent less likely to work in legal jobs. Although they are equally likely to work in construction and extraction, they are 565 percent more likely to work as construction laborers rather than occupying more skilled positions within those fields. Again, this means more complementarity between immigrants and US-born workers. New immigrants are choosing to settle in the states and industries where there are job openings.

Immigrants are also moving to states where jobs are being created, so immigrant job growth is moving up alongside increased employment for Americans. Of course, a decline in US-born employment does not mean that immigrants have displaced US workers. Instead, it is more likely that fewer US workers were entering the labor force than were retiring, thanks to America’s low fertility rates and aging population. As of 2024, the US-born prime-age employment rate has risen to near all-time highs. Americans are not being displaced by other Americans.

Immigrants are working for the United States. According to the Congressional Budget Office (CBO), just the increase in immigration from the “illegal” or semi-legal population (like asylum seekers and parolees) will increase US gross domestic product by a cumulative $8.9 trillion over the 2024 to 2034 period. It will also reduce the US deficit by a considerable $897 billion over that period—with the reduction reaching $117 billion annually by the end of the period. Remember that this group is much less skilled and has lower earnings than the entire group of new immigrants. The CBO only estimated the economic impact of those entering the country without a visa; had it included all new immigrants, the overall effect would have been even greater.

I recently extended the CBO’s analysis in a paper published this week, showing that recent illegal immigrants will likely be a net fiscal benefit to the federal government of about $4.9 trillion over their lifetimes in net present value (meaning discounting costs and revenues in the future). The average immigrant—both legal and illegal—is likely to be positive over half a million dollars over their lives in net present value.

The United States would suffer if immigration were greatly restricted or if there was an effort to remove those immigrants who are already here. The United States is about 35 million workers short of what the Social Security Administration says it will need to fund its liabilities in the 2030s. Labor force growth has fallen by two-thirds since its highs in the 1960s. To return to the labor force growth rate of the 1980s, America would need a net increase of 50 million more workers. In contrast, the last decade saw a net increase of just 7 million—with almost all of this growth coming from immigrants.

The United States would benefit from more immigration, not less. 

Andrew Gillen

You can’t go long reading about higher education before coming across a lament about cuts in state funding for higher education, often called state disinvestment. There’s just one problem—as documented in a new Cato briefing paper, states have been increasing funding over the past few decades, not cutting it. The figure below shows inflation-adjusted state funding per student over the last 43 years (the black line) as well as the long-term trend as given by the regression line (the blue line). The long-term trend line shows that state funding increases by $48 (±$18) per student per year. This increase in funding over time means that state disinvestment is a myth.

But while state disinvestment at the national level is a myth, there is some variation by state. The figure below shows the estimate of the long-term trend by state. There is statistically significant evidence that 24 states have increased funding over time (green), that 6 have decreased funding over time (red), and that there is no convincing upward or downward trend in 20 states (grey). So while there are six states for which state disinvestment is real, for each one of those, there are four states that have increased funding and more than three states that have seen essentially no change in funding over time.

The main damage caused by the myth of state disinvestment is a misdiagnosis of why tuition has increased. State disinvestment provides a plausible reason for higher tuition—as states cut funding for colleges, the colleges have no choice but to raise tuition to fill the financing hole.

But there are two main problems with this argument. First, there is no state disinvestment since states have been increasing funding, not cutting it. This implies that colleges should have been cutting tuition, not raising it.

The second problem is that it assumes a $1‑to-$1 relationship between changes in state funding and changes in tuition with tuition rising by $1 for every $1 cut in state funding. But the data contradict this assumption. The figure below shows the change in state funding and change in tuition revenue per student by year. If the 1‑for‑1 relationship were true, then each year should fall along the red line, but most years do not. The actual relationship is given by the blue regression line and shows that a $1 cut in state funding is correlated with an increase in tuition from $0.03 to $0.29, not $1.

The new briefing paper goes into more detail on these and related topics (including a possible beneficial change in the trends in tuition). Remember, state disinvestment in higher education is a myth, and it doesn’t explain increases in tuition. 

Adam N. Michel

The goal of the 2025 tax extensions should be to keep tax rates low and meet calls for additional pro-growth tax cuts, such as a lower corporate tax rate and permanent investment expensing. To do this within the constraints of the reconciliation budget process, Congress will also need to cut spending and find additional tax offsets.

The Tax Cuts and Jobs Act of 2017 (TCJA) increased revenue by approximately $4 trillion through base broadening and other one-time changes. These changes allowed Congress to cut taxes by $5.5 trillion, for a net tax cut of about $1.5 trillion over 10 years. This model of pairing base broadeners with tax cuts should be a road map for 2025.

By offsetting more of the 2025 package, Congress can make a larger share of the tax cuts permanent, improving on one of the TCJA’s biggest weaknesses. The following are 12 revenue-raising reforms that would improve the tax base, close loopholes, and cut special-interest subsidies.

Green energy subsidies. The Inflation Reduction Act (IRA) of 2022 dramatically expanded tax subsidies for politically popular energy sources. Congress should repeal the entire IRA and end the many failed pre-IRA energy tax programs. A clean break with these programs could raise more than $1 trillion over 10 years, allowing consumers to drive the energy sector forward.
Corporate SALT deduction. In 2017, Congress put a $10,000 cap on the state and local tax (SALT) deduction for individual and pass-through businesses. Repealing the deduction for corporations and cracking down on state workarounds would help level the playing between business types and eliminate an inefficient federal subsidy for state and local governments. Zeroing out the individual SALT deduction could, combined with other SALT changes, raise as much as $2 trillion over 10 years. Whatever size Congress decides the deduction should be, the cap should be evenly applied to all business types.
Muni bond interest. The interest income on state and local government bonds issued to finance infrastructure investments is generally tax-free for the lender. As described by Cato’s Chris Edwards, this exemption encourages excessive government borrowing, stacks the deck against private infrastructure alternatives, and fuels special interest lobbying. Scott Greenberg also notes that the subsidy primarily benefits high-income taxpayers and delivers a highly inefficient subsidy to state and local governments. Repealing the exemption could raise more than $350 billion over 10 years.
CHIPS and Science Act. The CHIPS and Science Act combines direct subsidies, tax incentives, and research grants to support domestic semiconductor manufacturing. Acknowledging the bill’s failures, both President-elect Donald Trump and House Speaker Mike Johnson have indicated they are open to repealing or reforming the $79 billion bill, which includes $24 billion in tax credit spending. Congress should repeal the entire CHIPS Act.
Education tax subsidies. The tax code includes hundreds of billions of dollars in subsidies for post-secondary education, which contribute to inefficiently high spending levels, significant student debt burdens, and, in turn, demand for additional government subsidies. To reign in the out-of-control US university system, Congress should repeal—or shrink and consolidate—the American opportunity tax credit, lifetime learning credit, student loan interest deduction, and parental benefits for full-time students younger than 24.
State tax subsidies. The TCJA required the inclusion of state and local government subsidies in gross corporate income. This change ensures direct taxpayer support for private industry is treated like private investments. Congress could raise billions of dollars and improve the TCJAs reform by expanding the definition of state contributions to include indirect subsidies, such as tax abatements, tax credits, tax increment financing, and other in-kind contributions.
Fringe benefits. Many employers compensate employees with health insurance, meals, parking, transportation, education assistance, and childcare because fringe benefits are often not subject to the income tax. This creates an incentive to compensate employees with tax-free benefits, which tend to help higher-income workers. While limiting the employer exclusion for health insurance may be beyond the scope of 2025 tax reform, including other fringe benefits in taxable income could raise tens of billions of dollars.
Tax-exempt economy. As Scott Hodge recently detailed, the “majority of tax-exempt organizations today are business-like in form and function, including credit unions, hospitals, utilities, insurance companies, universities, professional athletic associations, golf clubs, and consulting firms.” As I also described earlier this year, reining in these abuses could raise as much as $400 billion over 10 years.
Rum cover-over program. A little-known program sends approximately $700 million a year in excise tax revenue from the US Treasury to Puerto Rico and the US Virgin Islands. In addition to subsidizing a large share of the rum consumed in the United States and worldwide, it is fiscally destabilizing for the US territories. Congress should end the rum cover-over program.
Employer tip reporting credit. Congress should repeal the restaurant industry’s employer-tipped income reporting tax credit. At a cost of $26 billion over 10 years, the Obama administration recommended repealing the credit because it “costs far more than any positive effect on tax compliance.”
Itemized deductions. Only about 10 percent of Americans itemize their deductions instead of taking the simple standard deduction. Congress should expand the TCJAs limits on itemized deductions, such as the mortgage interest deduction (MID), or repeal them entirely. Most itemized deductions are poorly targeted to meet their policy goals. For example, as I’ve written before, the MID “is not associated with additional homeownership. Instead, it tends to subsidize larger houses for older, higher-income taxpayers.”
Low-income housing tax credit. The low-income housing tax credit is a lucrative subsidy awarded with political discretion, making it overly complex and corruption-prone. Due to the credit’s design and supply constraints, it is ineffective at inducing additional low-income housing, and the benefits are primarily captured by financial companies and developers. Repealing the credit could raise $150 billion over 10 years.

Many of these reforms are also included in the Cato tax reform plan, which outlines more than $14 trillion of tax loopholes and subsidies that Congress should repeal to offset lower tax rates. The 12 highlighted here represent about a quarter of the tax expenditures that should be on Congress’ chopping block.

Congress can and should also cut spending. Chris Edwards lists 10 spending cuts for President-elect Trump that should also be part of a congressional agenda to lower inflation and streamline government. 

Nicholas Anthony

After President Joe Biden signed an executive order instructing the government to research and develop central bank digital currency (CBDC), nearly every agency responded with public reports. The one outlier was the Department of Justice (DOJ), which opted to withhold its legislative analysis from the public eye.

I’ve had a Freedom of Information Act request pending for two years now in hopes of making the DOJ’s analysis public, and I’m not the only one seeking answers. Members of Congress have noticed the missing analysis as well. Representative French Hill (R‑AR) and ten other members of Congress wrote to Attorney General Merrick Garland in October 2022 when it became clear that the information had been withheld.

In the two years that have passed since our initial queries, neither my Freedom of Information Act request nor Representative Hill’s letter have been answered. When we discussed the matter, Representative Hill said, “I have pressed the DOJ for two years to receive a copy of their memo on CBDCs yet have received nothing but silence.” He further said,

The House was clear when it passed the Emmer-Hill CBDC Anti-Surveillance State Act to prohibit the Federal Reserve from issuing a CBDC and Chair Powell has publicly stated the Fed would not proceed on a CBDC without Congress—it should not be so difficult for the White House and DOJ to say they agree. The Biden-Harris Administration’s efforts to exert broad and untested executive authority by forgiving student loans give Americans every right to fear the same expansive executive power being abused once more with the creation of a CBDC. I applaud Cato’s FOIA request to obtain this information. If the White House and DOJ have nothing to hide, they should make this memo public and respect Congress’ constitutional authority to coin and regulate the value of money.

Representative Hill is right: it should not be difficult for the DOJ to make this information available. At the end of the day, the information in question is not on the location of witnesses in ongoing cases or the details of undercover agents. Rather, the DOJ was only asked to explain “whether legislative changes would be necessary to issue a United States CBDC” and to provide “a corresponding legislative proposal.” That’s it.

Yet despite the efforts of myself and Representative Hill, the only publicly available information about the DOJ’s analysis appears to be in the footnote of a press release announcing the publication of other reports related to President Biden’s executive order.

Perhaps it’s notable that out of the many reports required by executive order, the question of CBDC legislation was the only one that went to the Assistant to the President for National Security Affairs (APNSA) and the Assistant to the President for Economic Policy (APEP) instead of to the president directly. Still, this information should have been made publicly available once it became clear the public was interested in it.

Given how the rise of CBDCs has increasingly become a public concern, the American people deserve to know what the DOJ and the White House think needs to be done to create a CBDC. 

David J. Bier

Just before the election, the Manhattan Institute (MI) released a report titled: “Lifetime Fiscal Impact of Immigrants.” MI claims that the recent surge in immigration under President Biden will cost the federal government $1.15 trillion over the lifetimes of these new immigrants and that “mass deportations would significantly reduce the national debt.” Expect this analysis to be cited by the incoming Trump administration.

Today, the Cato Institute has published my response as a working paper, detailing serious errors that, when corrected, reverse MI’s central conclusion. In fact, after corrections, MI’s model predicts enormous fiscal benefits from the recent influx of illegal immigrants: a deficit reduction of $4.9 trillion over the immigrants’ lives. This is consistent with the recent findings of the Congressional Budget Office (CBO). 

Here are the nine major issues my paper identifies:

MI assumes that immigrants cause large, immediate increases in military spending;
It excludes significant tax revenues from corporations employing the immigrants;
It inaccurately attributes the costs of the child tax credit solely to parents;
It assumes that low-skilled immigrants are just as unlikely to leave the US before retirement as high-skilled immigrants;
It doesn’t account for how immigrants reduce interest payments on the debt;
It assumes new illegal immigrants are as uneducated as those from a decade ago;
It assumes recent illegal immigrants are as old as other immigrants;
It assumes illegal immigrants are just as likely to use entitlements as other groups; and
It fails to account for interest costs on deportation spending.

Even if you correct only the last item on this list, MI’s estimated deportation costs jump to $1.6 trillion, which exceeds the supposed benefits of mass deportation. The report’s author helpfully shared the model so I could reevaluate its results precisely. 

#1 Military spending: MI states that military spending will increase because more people will mean more military personnel, but military personnel has actually halved since the 1950s. Moreover, defense spending has decreased both per capita and per US-born person since the 1950s. MI’s assumption about defense spending is also bizarre when applied to deportation because it implies that Congress will cut defense spending by $40 billion if the recent immigrants are deported—which is unrealistic, to put it mildly.

#2 Tax revenues: MI excludes about $771 billion in tax revenues from its analysis, primarily from corporate income taxes. It is well-established that wage earners create a proportional increase in corporate income (which is why they are hired), yet MI simply leaves out all this revenue. MI claims that it cannot determine the exact percentage of corporate income taxes that should be credited to employers versus workers. The Tax Foundation assesses that most should be credited to workers. Instead of making its own estimate, MI takes the extreme position that all new immigrants generate no additional corporate tax revenue, which is not true.

#3 Emigration: MI assumes that immigrants without a high school degree are as likely to stay in the United States permanently as those with a college degree. This assumption is wrong and critically skews the analysis because most costs accrue during retirement. My suggested adjustment is really an understatement for illegal entrants because many illegal entrants are deported, leading to even higher emigration rates.

#4 Interest costs: To calculate the cost of interest, MI projects future interest costs from new debt and distributes these costs among the fiscally negative people. Two problems here: 1) some new debt is from public goods (like military spending), which immigrants don’t cause; and 2) immigrants who are fiscally positive throughout their working lives accrue a fiscal surplus that reduces the debt in their retirement. Handling this issue correctly flips some immigrants from a fiscal net negative to a net positive. 

#5 Tax credits: MI allocates 100 percent of the cost of the child tax credit and the earned income tax credit to the tax filer. This is legally and factually inaccurate and inconsistent with MI’s stated methodology, which apportions all other government benefits for children to the child and distributes household benefits to the whole household. MI could have expanded to calculate the costs and benefits of immigrants’ descendants. But it is biased to include some costs and no tax revenues, especially when the 2nd generation workers are the highest-earning Americans. Finally, MI’s choice here implies that deporting the immigrant tax filer head will zero out these payments when, in reality, it may just shift them to a different tax filer because the US citizen child or spouse cannot be deported and is entitled to these benefits.

Here are how these adjustments affect the results for young, low-skilled immigrants. MI’s results aren’t plausible if any of these changes are made.

These first five issues are all things that affect immigrants in general. But then MI takes the results of its profile of the average immigrant—legal and illegal—and tries to apply them to the recent illegal entrants to the United States. 

#6 Immigrant education: The report cites an estimate of the educational attainment of illegal immigrants from 2015, even though we now know that recent illegal immigrants are much more highly educated than the cohort a decade ago. Since education is an important predictor of income, this decision decisively reduces tax revenues from new immigrants.

#7 Immigrant ages: MI inaccurately estimates the age profile of recent illegal immigrants by failing to use the publicly available data that come directly from the Border Patrol. It overstates the number of retirees crossing the border, inflating the share of border-crossing retirees (65+) by a factor of 13. Retirees are much more costly than young immigrants. 

#8 Immigrant welfare use: MI assumes that recent illegal entrants will be just as likely as any other immigrants with their demographics to use welfare and entitlement programs like Social Security and Medicare—even though they are legally prohibited from accessing those benefits. Of course, some will receive asylum, but it’s a small minority. This assumption is perhaps the least understandable. MI admits that this inaccurate assumption biases the result, but still uses the $1.1 trillion cost in its headline results.

#9 Deportation interest costs: MI accounts for the interest costs on debt incurred by fiscally negative immigrants over 100 years. But when it is estimating how much cheaper it would supposedly be to deport them, it doesn’t account for the interest costs on that spending, which implicitly assumes a “deportation tax” is used to pay for roughly $500 billion in spending (imagine that!). Once interest costs are accounted for, deportation costs $1.5 trillion, which is more costly than even MI’s fatally flawed $1.1 trillion estimated cost from the immigration surge.

Altogether, MI’s revised analysis shows that mass deportation would cost the US government about $6.4 trillion—$1.5 trillion from the deportations themselves and $4.9 trillion from the lost tax revenue. My paper provides more detail and explanation behind these numbers, and people with an interest in this subject should read the whole report. However, unlike CBO’s results, MI’s results (even after my corrections) do not account for the indirect economic growth effects of immigration, so they should be seen as the minimum possible benefit. 

If the purpose of the paper was really to produce the most economically efficient immigration policy, MI should suggest letting immigrants come or stay without benefits. Indeed, restricting welfare benefits makes many low-skilled immigrants more fiscally positive than high-skilled immigrants with benefits. But MI never suggests this policy, focusing more on deportations and exclusions. That doesn’t make sense. Immigrants would happily trade benefits for the right to stay here without fear of deportation, and Americans would benefit from their presence. It is a clear win-win. 

MI did take the time to produce an interesting model, but because it incorporates many inaccurate assumptions, its results are flawed. MI’s model—after corrections—reveals significant fiscal upside to immigration—legal and illegal, low-skilled and high-skilled. It should accept these corrections, implementing a more accurate fiscal effects model in the future.