2008 October 12 Sunday
Sydney Australia Can Not Afford Immigration
The state government can not afford to build the infrastructure needed to support a large population increase.
SYDNEY has grossly under-estimated the population explosion that will squeeze its resources over the next 20 years, but the cash-strapped Premier admits it is "pointless" to promise the billions of dollars in extra spending the city will need.
Nathan Rees yesterday signalled deep cuts in the capital spending program and a radical departure from the $140 billion infrastructure strategy of the former premier, Morris Iemma.
On the same day that it emerged Sydney will need almost 900,000 extra homes by 2031 - a third more than estimated three years ago - Mr Rees told a news conference: "Governments can boast about capital works programs extending out five, 10, 15 years. But essentially what you're boasting about is the level of debt you have."
Mr Rees said income or revenue was needed to service the debt.
"If we can't, it's pointless boasting about a capital works program," he said.
One of the problems: medical costs are going up 8% a year and threaten to eat all the state's budget.
When Peak Oil hits infrastructure will become even less affordable. Tax revenues will decline while the costs of construction rise. Better to have a constant population level at that point. So stop the immigration.
"Better to have a constant population level at that point. So stop the immigration."
Well duh. Using mass immigration to goose the economy is like using meth to boost your energy levels (that is what meth does, right? I wouldn't know). It's an artificial stimulus, and your body pays the price for it in the end.
I always thought that the price of immigration would hit the economy, but I thought it would be a slow, often barely perceptible decline in quality of life, income, etc. I never thought that the debt, speculation, and increased strain on infrastructure would hit all at once.
But an increased population of people with low human capital caused greedy politicians to debase lending standards. Lenders went crazy with the lower lending standards for EVERYONE, because Fannie and Freddie were willing to buy them up. Home prices soared as a result of that. People thought housign prices would grow ad infinitum. One reason: because the population was booming, thanks to immigration. Another reason: lots of Americans wanted t escape neighborhoods with those immigrants. But the new immigrants' earning ability didn't justify thehigher home prices banks had lent money on. Banks didn't get their money back, and the squeeze was on.
Just like businesses need to expand their facilities to accomodate a growing clientele, governments need to add infrastructure to accomodate huge inflows of immigrants: they need to use DEBT to finance new roads, new schools, new prisons, and all sorts of other stuff. Even they will find it harder to get in a tighter lending market.
The lesson from all of this: growing your economy by simply increasing the population is a pyramid scheme. The only way you can grow the economy that matters is by increasing the skills and productivity of your native population.
The era of using mass immigration to goose the economy and impoversih and politically weaken the natives is almost over. Now all we need to do is find a way to get those wo came to return home. Quickly.