New Biden Private Sponsorship Refugee Program Could Tackle Inflation

Could America’s inflation problem be solved through increasing immigration to the country? That is what billionaire William Ackman, the CEO of Pershing Square Capital Management, suggests. As he sees it, the annual inflation rate for the United States, currently running at 8.3% annually according to the Department of Labor, feeds into the debate about what should be done with immigration. In that debate, the United States seems incapable of coming up with a coherent plan. Republicans call for shoring up the southern border and deporting illegal immigrants, while Democrats argue the priority should be sorting out the problem of undocumented immigrants by creating a legal path to citizenship. Neither party appears to be sufficiently tuned into the overwhelming problem of refugee immigration growing outside the United States, which is part of the point Ackman is making.

An Interesting Question

Ackman makes the case that immigration, not the Fed, could be the solution to inflation. “Inflation can be mitigated by reducing demand and/or by increasing supply. The Federal Reserve can only reduce demand by raising rates, a very blunt tool,” Ackman tweeted. “Doesn’t it make more sense to moderate wage inflation with increased immigration than by raising rates, destroying demand, putting people out of work, and causing a recession?” That’s an interesting question. Ackman specifically points to the exodus of tens of thousands of Russians fleeing potential conscription into the country’s army as a pool of talent that could be drawn on as a “brain drain” from that country.

Counterintuitive But Right?

Considering Ackman’s point, Fortune commented, “While it may sound counterintuitive for economists and investors to advocate for more immigration to slow wage growth, their fear is that a wage-price spiral—where inflation-induced wage increases contribute to company costs, which then raise prices even more—will ultimately make inflation impossible to control.” Fortune quoted Olivier Blanchard, the IMF’s former chief economist, who said just last week that he believes, “the U.S. is already experiencing a wage-price spiral, and warned that stopping the trend will likely require significant job losses.”

A New Refugee Sponsorship Program

Meanwhile, President Biden announced a new plan to launch a private refugee sponsorship program in the coming months, an effort that could accelerate lagging refugee admissions in the United States. According to a recent article in Roll Call, “the private refugee sponsorship program will effectively expand the “sponsor circle” system created last year when the U.S. was searching for ways to resettle roughly 80,000 Afghan evacuees.”

According to the article, “Under the initial program, groups of Americans could apply to sponsor Afghans who had arrived in the U.S. under humanitarian parole and assist them with housing, medical care, finding employment, and enrolling their children in school. Later, after Russia’s invasion of Ukraine, the Biden administration created similar opportunities for those wishing to help Ukrainians fleeing the war.”

Remedying Poor Performance So Far

The plan promises to shore up the weak performance of America’s asylum program in landing refugees in the United States at the moment. According to Roll Call, “in fiscal 2021, the Biden administration resettled 11,411 refugees through the traditional resettlement program, short of its goal of 62,500. So far in fiscal 2022, which ends this month, the government has resettled 19,919 refugees through the traditional program despite a goal of 125,000.” While it is true that tens of thousands of displaced persons have been allowed to enter the United States under humanitarian parole programs, even that number has fallen far short of what America could do to help those displaced abroad in search of new homes, and that remedy is not nearly sufficient.

Proper Implementation Is Key

Moving to a private sponsorship system is definitely more on point since it could serve both to alleviate serious external refugee needs while addressing internal American problems such as manpower shortages and inflation, as Ackman pointed out. However, it is important to make sure the program is implemented properly.

We Did This Before

Following World War II America brought some 425,000 new immigrants to the United States as permanent residents using a similar program. In that case, private sponsorships helped thousands of migrants resettle in the U.S. in circumstances where, in many cases, the new arrivals repaid the sponsors in the course of the following years. There were few if any welfare or health care programs that the new arrivals could access. The migrants contributed to and almost invariably did not become a burden on American society. A kind of social contract served as the basis of the success of the program binding the sponsor, the immigrant, and the country to implement the program successfully. The proposed new Biden program ought to follow a similar outline.

The Best Answer For America

Ackman’s proposal is constructive in that it proposes to address America’s inflation problem by bringing in outside skilled workers who are the kind of immigrants that are likely to contribute to, rather than burden, American society. However, it misses the mark in focusing just on Russian talent, since it overlooks the almost 75,000 Afghans still looking to come to the U.S. and the several million refugees that have left Ukraine since the outset of the war, not to mention many other migrants from elsewhere who also have talents to contribute to America. While America is not the answer for every foreign refugee, legally bringing in more of the best and the brightest foreign migrants is definitely the right answer for America.

Let’s Hope Reason Prevails

What is most important, however, is that America is far behind on its promises and on its responsibilities when it comes to dealing with refugees and displaced persons worldwide. A private refugee sponsorship program offering permanent residence to the best and the brightest will help the country catch up. Let’s hope that reason prevails and that as polls consistently show, Americans want to help in this way. If so, maybe indeed such a program can help set off the high-interest rates America is facing at the moment and prove Ackman’s point to be true.