One of the bizarre elements of our immigrant investor (EB-5) program is that we sell visas for a sum that is less than the net worth of the average American household.
In general terms, no matter how many in the alien's immediate family, they all get conditional green cards if one of the parents chips in half a million to a more or less government-selected, but certainly not government-insured, investment scheme. These are, by the very nature of the program, as we have shown in a recent CIS Backgrounder, below-par investments, and they are made by aliens who could not get into the United States in any other legal way.
If the investment stays in place, the family does not engage in crime, and they still are interested in living in the United States, the conditional green cards become regular green cards after the passage of two years and the submission of another application.
My point today is that the sum — $500,000 — is less than the mean average financial worth of American families. (The average net worth of the American family in 2007 was $556,300; that is the mean, not the median, and it can be seen on p. 461 of the ever-reliable Statistical Abstract of the United States: 2010.)
So, the United States, in order to increase the wealth of the United States, is enlisting people to buy visas at a sum below the average wealth of U.S. families.
Only in America.
Other nations, incidentally, have somewhat similar programs, but virtually all demand much more money for their visas.
Frankly, I think that selling our visas for cash is pretty tacky, but if we are desperate enough to do so, we probably should raise the price. The half-million figure was set 20 years ago when it might have been enough to generate the 10 jobs that are part of the visa requirement, but it certainly is not today.
But don't those half-million-dollar investments give our economy a boost? Yes, if you are watching the whole process with a very powerful microscope. Using government figures for the nationwide increase in foreign investment, we find $1.9 trillion dollars in 2009, for example; depending on whose numbers you use, the increase in that investment related to the EB-5 program was either $191 million that year or $1.2 billion. This works out to be either one or six cents for every $100 in increased foreign investment in the United States that year.
Given the administration's active promotion of the program, that number may even be heading toward 10 cents of every $100 in additional foreign investment.
One penny or maybe even a dime out of $100. Why bother?