No Immigrants & Negative Growth = Canada’s Economic Tipping Point

Man holding a small canadian flag against a misty background

Canada sharply restricted immigration and scored itself a 0.2% population decline. This flips the script on a long-running strategy of lax immigration to offset low birth rates and prevent pension/workforce collapse.

Slamming the door shut quickly has triggered demographic decline; should the door remain shut for too long, they risk restarting a long-term economic hollowing-out. However, the severe housing shortages, affordability crises, social backlash, and rise of nationalist politics make a good case for curbing inflows.

Canada is facing a rough economic outlook in the coming decades, unless it can figure out the people problem or negotiate more favorable trade integration with the US.

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Transcript

Hey, all Peterson here coming to you from not Canada, but Colorado. But we’re gonna talk about Canada anyway because, you know, it’s snowing. Okay, so the big news in Canada is that they have had population drop this year, 8.2%, their first drop in cheese quite sometime. So a few decades at least. What does this mean for them? 

Why did it happen? Where is it going to take them? So if you dial back to 15 to 20 years ago. Canada was in a population bomb situation that is very similar to what’s going on in Germany and Italy. They basically the birth rate had dropped, for decades, and they hadn’t had, rising birth rates since really almost World War two. 

And it was really starting to cause some problems for them. They knew that in the next ten years, which would bring us to, you know, five years ago, that they would be facing pension collapses, more people in their 70s and 60s and 50s and 40s and 30s and so on. And there was really no hope. 

Very little hope, anyway, that they would ever have a domestic regeneration of their population structure because there just weren’t enough people under 30 to have kids in the first place. So under the previous, previous, previous, Prime Minister Stephen Harper, who was a conservative from the province of Alberta, which is basically the Texas of Canada, started opening the doors to immigration. 

Now, Canada had always had a relatively egalitarian view towards immigration compared to everybody else in the world. But it was always, an issue of a race. The problem is, is when the migrants come to the United States back in the pioneer days, they could go out and become small, hold farmers and be exporting grain to the wider world in a matter of months. 

And the wealth came really easy in Canada. Not so much. The prairie provinces did have that option, but they were drier and they were colder and they were less reliable. And if you start going into interior, say, Quebec and, Ontario, you’re on a chunk of geography called the Canadian Shield, which is a bunch of uplift that had been scraped, cleared by the, glaciers. 

And so there just wasn’t much soil to work with. And the soil was very poor. And of course, it gets a little cold for most of the year. So they never had the pioneer experience that the United States had. And that took Canada in a different direction, and means that most of the population isn’t just massed on the southern border for warmth, but clustered into cities for warmth. 

About 85% of the population of Canada lives in the major cities. It’s a very different dynamic economically and socially than what we have in the United States. Socially. It makes it really easy to bring in other groups because it’s already a polyglot. Economically it means and unless you keep that cycle of people coming in, you start to age out really quickly. 

And that’s what happened back in the 1990s. So Harper opens the doors, immigration doubles, triples, quadruples, and they bring in enough people who are in the age bloc of roughly 30 to 45 that they can pay into the system enough in taxes, before they retire, that it doesn’t break the bank. The downside of that plan is that once you start that policy, you can never stop, because if you bring in someone who’s 40, ten years later, they’re 50, ten years later, they’re 60, and all of a sudden they’re, retiring. 

So where is the United States? People can walk here from the South. And so we tend to get migrants that are under 25 in Canada, they typically have to fly there. And so they tend to get migrants that are over 40. So once you open the door, you have to leave it open and you bring in hundreds of thousands of people every single year. 

You do that for 20 years, and you start to change the political and the ethnic makeup of the country. Now, in large parts of Canada, that’s not a problem. I mean, if you’re in Toronto, it’s a polyglot. If you’re in Montreal, as long as the people are coming in are French, it’s fine. And, you know, a lot of French ethnics from France came to Montreal in the aftermath of the European financial crisis and never left. 

But they were close enough ethnic mix that it wasn’t too much of an integration. I mean, people from Montreal eventually discovered that the French can be kind of pricks. But, you know, that’s a French inter French problem for the rest of Canada. 

It was a much more diverse crowd, a lot of South Asians, but really people from everywhere and eventually it reached the point that Canadians who had been born in Canada, regardless of their ethnic affiliation, were starting to lose connection with the place that they were consider themselves to be from. So there’s a cultural issue, but the bigger one was much more economic. 

Everybody has to have a place to live and so when you bring in a half a million or more people a year into a country that only has about 30 million people, you start changing the dynamics of the housing market very, very, very quickly. And many cities in Canada, most notably Vancouver and Toronto and Montréal, but also the secondary cities like Regina, and Saskatoon, suddenly became unaffordable for people who had lived there all their lives. 

And I’m not talking like the bottom 10% on the socio dynamics. I’m talking like 80% of the population. It hit a break point two years ago in calendar year 2023. Back then, Justin Trudeau was still premier, and he realized that it was shifting the entire country, not necessarily on the left or right spectrum economically, but on the left right spectrum socially and the far right. If we were in the United States, we would call them MAGA. 

Started to rise up and agitate and became very politically potent. And so he realized that unless his great centrist liberal experience was going to be threatened, that he needed to dial it back. And in the course of about 12 months, the TRO government basically shut almost all possibilities for illegal migration to Canada. And since the borders between Canada and the rest of the world, aren’t really the walkable type. 

That pretty much it was it. And so this last calendar year calendar 2025, we actually had a population decline. Now, under normal circumstances, that wouldn’t have been enough. And under normal circumstances, Justin Trudeau’s Liberals would have lost horribly in the general election that they had last year. But enter Donald Trump, who started agitating against all things Canadian, started calling Canadians nasty. 

And we got this big nationalist upwelling for whatever candidate it looked like Trump was not supporting. And so the liberals were able to eke by with a new government once Trudeau resigned. 

Where does that leave us now? Well, Canada has now closed the door, and with that door closed, the demographic time bomb starts ticking again. And if they leave it closed for any more than five years, we’re going to be looking at a hollowing out of the entire economic fabric of what’s left of the country. 

What I wrote 15 years ago when this was just starting up was that without a massive change in demographic structures, we were within just ten years of the country going to a position where Alberta was basically paying for everything, because that’s where the oil is. We’re back in that situation again. The difference this time is that globalization has failed, and is now basically going through the process of dying and Canada, luckily, was never really globalized. 

They basically traded with the United States and very few other places, over 80% of their trade. If I remember correctly. Gum South, that hasn’t changed. What has changed is that today there is an impulse in North America for a massive re industrialization program to build up the manufacturing plant that we need here to replace what we used to depend on from the Eastern Hemisphere. 

There is definitely a role for Canada play in that. Now they have aging infrastructure, they have an aging workforce. They’re heavy regulators. nowhere near going to benefit as much as Mexico has and will. But via the existing connections between Auto Alley and Detroit and the province of Ontario. They’re far more integrated into American automotive manufacturing, the really other part of the world, except for the possibility of Mexico versus Texas. So there’s plenty to work from. 

There’s plenty to work with. And since we’re only talking about a country here of 35 million people, of whom like a third are already retired, you don’t have to have a lot of breakthroughs for Canada to really benefit on the aggregate, but it does require a very different approach to policymaking, not just in Ottawa, but also in Washington. 

And we’re probably not going to get that in the next three years. Now, NAFTA negotiations renegotiations happen in calendar year 2026. How those talks go will determine what is possible for Canada for the next 15 to 20 years. And if they’re not going to allow large scale immigration, that is really the only game in town. So it’s going to be very interesting to see how the Canadians come to terms with higher nationalism versus the Trump administration, versus the need to just suck it down and put up with the Trump administration in order to get what they need on trade, because they can only do one of the two. 

Whoops. I said that backwards. They have to do one of the two.

Immigration and Tariff Policies Stunt US Economy

Immigrants standing in line in front of an American flag | Licensed by Envato Elements

The Trump-era policies are going full Darth Vader and have the US economy in a chokehold (or force choke for the nerds out there). Today, we’ll be focusing on the policies covering immigration and tariffs.

Nearly all legal (and illegal) forms of immigration have been closed or drastically restricted. This includes high-skilled H-1B visas, which now have six figures in fees; most startups can’t go dropping that kind of dough. Once you mix in all the costly deportations and the retiring baby boomers, the US labor force is drying up quickly.

Tariffs are only adding to the problem. With 10-60% tariffs on imported goods (the Chinese sitting near the top with 50%), we’re beginning to see rapid price increases. Walmart and other retailers are reporting hikes that are only going to get worse.

Fewer workers, higher costs, and not enough domestic investment, all the things you don’t want to hear about an economy. The Fed warns that the only reason a recession hasn’t formally set in yet is because labor demand and the workforce are shrinking at similar rates. That has left the US economy dazed, confused, and highly vulnerable.

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Transcript

Hey, all Peter Zeihan here come from Colorado. Today we’re going to, look at the American economic situation, how a number of Trump policies are coming together in the current environment and where we should expect that to take us during the rest of the year. Short version is the picture doesn’t look great. Let’s start with immigration. 

There’s basically four paths to immigration that the Trump administration has, put the crimps on first. You’ve got your illegal, irregular migrants, who cross the border and then try to slip into the system somehow. Number two, you’ve got your people who try to follow the rules and do it legally. Third, you’ve got your folks who come in on a high skilled visa, something like H-1b, to get a specific job sponsored by a specific company. 

And then finally, you got your rich folk that just come because they went to all four of these routes are in collapse. We now have the Trump administration going into churches during services in order to round up Hispanics and kick them out, as well as intervening in courtrooms and going, where they’re having their hearing on things like asylum or even just to see if they’ve done the paperwork. 

Right. And, before the hearing can happen, escorting them out of the country comes out to about 17 grand per person to do extraditions this way. And it strongly preferences people who do not have criminal records because they’re more likely to be out in public. So the original promise of just going after criminals that has long in the past, and we’re basically going against the rank and file of people who came for jobs or to be with families. 

Regardless of what you think about this, from a legal point of view or an ethical point of view, it it has an absolute impact on the job market. We’ll get to that in a minute. Legal pathways, those are pretty much all been closed down. And that is not simply a Trump two thing. That’s also a trump one thing that is also a Biden thing. 

Most of restrictions that Trump won put on legal migration were actually codified by the Biden administration and now than doubled down on. So you wanna come to United States, there’s only two paths left. 

Number one is you get an H-1b visa. That is the visa that like, say, the tech industry uses to bring high skilled people in to help populate their workforces. The number of those being granted is being reduced by about three quarters. And the fee for it is going up to something between $100,000 and $2 million. What that means is not only are far fewer companies going to do it, but the companies that will do it are only going to be the really big ones. 

So your apple, your meta, things like that. And so if you’re a small startup, you’re now stuck with local labor. And as anyone who’s in the tech space will tell you, there is not enough local labor for a tech industry in any country of the world. There’s a global supply, but there’s only enough to man tech sectors in maybe one quarter of the world’s countries, of which the United States has always been the largest market. 

And by severing the United States from that labor pool, you’re basically guaranteeing that the pace of technological change, will arrest, significantly. And we’ll see impacts of that within a month. And then finally, the only other way to get in is a gold visa. Now, Trump’s original idea was a $5 million gold visa that would get you into the country and basically give you residency. 

There were no takers. None. That’s put too fine a point on it. But if you’ve got $5 million to spend for a green card, you don’t need a green card. So they’ve dropped the price now to $1 million. We’ll see if they get any takers from that. It’s pretty steep. Still has to be approved by Congress. 

So basically, almost every path, for bringing migrants, immigrants, vacationers, whatever you want to call it, you know, have to have a bond to travel the United States for tourism, has been severely crimped, if not closed down completely. And it’s leading to the first population reduction in American history. And, from an economic point of view, we’ve got two issues going on that are both really bad. 

Number one, for the first time since Vietnam, the workforce is shrinking. And for the first time in American history, the labor pool is shrinking. What companies are doing is in this sort of environment, they’re letting go their older employees as they retire the baby boomers, and they’re not hiring replacements. Now, that has happened before. But for that to show up in the data this time as a reduction in overall employment numbers, you’ve got to remember the scale here. 

The boomers were, until very recently the largest generation in American history. And the Zoomers at the bottom of the pyramid right now are the smallest generation in history. So for that to register as a collapse in jobs, the numbers is immense. And it’s the opinion of the Federal Reserve that the only reason we haven’t seen a formal recession yet is that the job market and the labor pool are shrinking at the same rate, and that it’s the fastest we’ve ever seen in any era of American history. 

Now, macroeconomic theory tells us that this will generate and, not particularly long order, a very, very crushing recession. But I’m not ready to say that yet. Jerome Powell, the Federal Reserve is not ready to say that yet because there’s so many things in motion. What we do know for certain is it makes the United States much more vulnerable to any sort of shock, because there’s just simply fewer pillars holding up the system. 

Well, we’re getting that shock because of the tariff policy. We’ve got tariffs ranging from 10 to 60% on various countries in the world. The tariffs are on China at 50%, which is where we get a lot of our consumer goods. And so just since September 1st, just in the last two, three weeks, we’ve now seen price increases across the board that will show up in statistics next month most likely. 

But we’re seeing in corporate earnings already, remind you’re that we went in and out and in and out and in and out of these tariffs from when they were, initially applied in April. There were extensions. There were there were holidays, and most of them are now in place. So we’ve really only had them now for about six weeks, but that’s an long enough time to burn through some inventories and jack up prices on shelves. 

So Walmart, writ large, is looking at a 30% increase in prices across the board, with some items being more than double that. Keep in mind that this is when people are still pulling inventory that they built up during those holidays in preparation, so that 30% increase is going to absolutely increase month on month unless and until these tariffs go away. 

So we have a far weaker employment situation. We have far smaller labor force. We have a far less skilled labor force. We are not seeing the industrial investment that would be necessary to replace the manufactured goods that we’re losing access to, and we have tariffs that are making everything more expensive. This will generate an economic adjustment, in the not too distant future. 

The question is how soon, how bad in which sector? If I were a betting man. Usually not, but here we are. I would say the manufacturing is a sector to look at first, because more blanket the tariff structure, the easier it is to relocate manufacturing supply chain steps outside of the country with the tariff structure and just do it somewhere else, because instead of having product going back and forth across borders, which is how we say produce cars, you then have to pay that tariff multiple times per vehicle, whereas if you build the car completely beyond your shores and then bring in the finished vehicle, you only have to pay it once. And we’re seeing that in the investment decisions of companies that will manifest as employment problems next year. I think we’ll have our economic correction far before that, though.

Half A Million Immigrants Get the Boot + Auto Tariffs and the Art of Routine Vehicle Maintenance

Photo of an Audi dealership

Half A Million Immigrants Get the Boot

The Trump administration has decided to rescind legal status for over half a million immigrants from Venezuela, Nicaragua, and Haiti. If you’ve listened to any of my videos, you’ll know there are some glaring holes in this decision.

First, the labor impact. The US is already facing a labor crunch, and the problem will only be exacerbated as we shift away from manufacturing in China. These immigrants had already been vetted and were ready to contribute to the workforce…there goes that.

There are legal and social consequences as well. Since these immigrants were fully integrated in the US system, stripping them of their legal status forces them into the cash economy and makes them targets for crime and exploitation. This also signals to future migrants that following legal pathways is futile, leading to more illegal crossings.

It’s just another notch in the undermining of trust by the Trump administration.

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Auto Tariffs and the Art of Routine Vehicle Maintenance

The Trump administration announced a 25% tariff on imported cars and car parts. While this tariff isn’t as severe as the others expected on April 2, it will still increase the cost of vehicles in the US by $2-3k on average.

There are some NAFTA exemptions for this tariff, but any vehicle containing 50% imported parts will still face a 12.5% tariff. This will impact all the manufacturers across the industry a bit differently, with the European manufacturers feeling the most heat.

Prices start to get spooky when you begin stacking tariffs. Between the 25% tariff on steel and aluminum and the reciprocal tariffs coming soon, I would keep driving your vehicle for as long as you can.

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Transcript #1

Hey, Peter Zeihan here. Coming to you from a hotel room. I don’t have a lot of time today, so packing up while I do this. Okay, so, the issue is, I see today is the 25th of March, and yesterday, the Trump administration rescinded legal, status for about 530,000 immigrants, specifically from Venezuela and Nicaragua, some from Haiti. 

Two big problems here. The first is that we are in a labor crunch. We have record low unemployment in poorly and a half a million people who are participating in the labor force. The kind of problem, you see, these were not your normal people who cross the border. These are people who got legal ization from the Biden administration not just to come here, but for them to come here. 

They had to register with authorities, have an interview with Department of Immigration, have a financial sponsor. And so they were integrated to the system. They had passed checks. So we’ve basically done all the work necessary to make them citizens. And then at the last segment, like say so, unless they’ve already proceeded on to the next step, they now have to go home. 

That’s problem one. Remember, we need to double the size of the industrial plant if we’re going to be ready for the Chinese collapse. That means a lot of construction. That means a lot of people building things. And as a rule, construction is a sector where most American citizens don’t want to work. So this is a real problem for the labor force. 

So to invest all of this time and effort and money and man hours in making these people ready and then kicking them at the last second, that’s just a waste. Second problem is legalities. And not the legalities of doing this. President obviously has the authority. The problem is on the other side, you see, when you’re legal, when you’re in the system, you can get a bank account, you can own property, you can register for health care. 

You can send your kids to school without having to worry about pulling them out the next day. And when you’re in that sort of environment, law enforcement is a resource you can draw upon. So, for example, if you’re a legal, illegal, you’re in the cash economy. And that means that everyone in your area who knows you’re not a legal migrant knows that you basically deal with cash. 

And as a result, you’ve identified yourself as someone to rob. And if you are Rob, you don’t go to law enforcement because you’re afraid you might get deported. So for these 530,000 people, we weren’t in that category. They were, for as far as we can tell, law abiding immigrants. 

And that means that now the Trump administration has basically penalized a half a million people for following the law, which means that the next half a million that come will probably not make the same mistake. 

This is an issue that we have had pretty chronically, since the 1980s, when the Reagan administration was the last administration to go through and change the legal structures for migration. We haven’t really given would be migrants an incentive to participate with the system? And this sort of thing is definitely going to accentuate that problem. 

Keep in mind that within the last month, the Trump administration has, started arresting, would be migrants that have also participated with the system through the, the, CBCp, arresting them on their way to their court hearings where they were supposed to be ruled upon, whether or not they were legal or not, and just grabbing them and send them home. 

So the next wave is definitely going to cross illegally and form an underclass in American society. And as we’ve seen with the phase one of the Trump administration. And, you know, four years ago, the wall did wonders for encouraging illegal migration, made it a lot easier because the Sonoran and the Chihuahuan Desert are the greatest natural barriers in the hemisphere. 

And by building 50 construction roads across the desert to build the wall, we basically obviated half of the barrier. This is definitely going to take advantage of that when we get our next big wave, which will probably happen as soon as the migrants can figure out how to navigate the new system, which, historically speaking, takes about a year or two, so we won’t have to wait too long.

Transcript #2

Hey all, Peter Zeihan here. Coming to you from Colorado. It is the 27th of March and late yesterday. Donald Trump initiated yet another tariff. I think this is the 87th tariff policy that we’ve had in the last six weeks. Oh my God. Seven weeks. Seven weeks. Anyway, 25% tariff on all imported cars and car parts. This is not the one that I was dreading. 

This one is actually not too bad, considering the scope of all of the others. Because if the car or the car part is produced within Canada, Mexico, in the United States, and is registered as a NAFTA product to import lifts, then it gets a bypass. So if your car is made out of one half content that comes from somewhere else. 

You now have a 12.5% tariff on the vehicle. It’s still going to drive up the cost of vehicles in the United States on average by about 2000, maybe $3,000 in some cases. But, because most of these imported parts don’t go back and forth across borders, in the NAFTA system. It’s not nearly as bad as what a NAFTA tariff would have been, which is what Donald Trump is threatening for April 2nd anyway. 

This will kick in on April 2nd as well. Not all vehicles are made equal. And just because it’s in a U.S. company does not necessarily mean that they don’t use a lot of import content. Automotive is unique among the world’s manufacturing sectors in that everyone produces some of everything because almost everybody needs cars at some level. 

So the Germans make the good transmissions, the Mexicans make the mediocre transmissions, and the, Chinese make the crap transmissions. Just to pick one. So just because it’s a Ford or a Chevy doesn’t mean it doesn’t have a lot of imported content. As a rule, the Big Three American automakers do have more. The the changes model by model. 

And as a rule, the Japanese, most notably Toyota, also have a lot of North American content because they have this concept of build where you sell and they put their money where their mouth is, and they’re trying to get on the right side of tariff and political issues. Once you get into Korean cars, it drops quite a bit. 

And once you get into the European cars, it really drops. Most of the European and manufacturing centers that are in North America actually use almost 100%, in some cases, 100%, imported content from Europe. And then, of course, if you’re getting a Beamer that comes from Bavaria, it’s probably 100%, European content as well. Anyway, we’re putting up this handy little chart so you can see of the top 25 models, which ones or which. 

Generally, the closer you are down into the red towards zero, the more your vehicle is going to cost. And a quick reminder that this is just one of the tariffs that is hitting automotive. We’ve got another one that’s in place already. And that’s the 25% tax on imported aluminum and steel, which you know every vehicle has a lot of both of those. 

And then once we get to April 2nd, that’s when Donald Trump is going to be announcing a lot more tariffs, something he calls reciprocal tariffs, probably NAFTA tariffs and then additional tariffs on everybody on the outside that he doesn’t like. He calls them the dirty 15. And they’re really just our 15 largest trading partners. So you put those three together. 

Remember these all stack up with one another. They’re cumulative and could easily see the cost of automobiles in the United States going up by $10,000 a vehicle, or maybe even a lot more based on where they come from. 

Now the data in this graphic is from 2021. There is more recent data available from the Department of Transportation. Unfortunately, because of the bonfire of staffing that is occurring in the federal government right now, it is not in an easily absorbable format. So it’s going to take us a couple days to process it. And we will get that out as soon as is feasible. 

Which reminds me. We’ll be covering all of this and all of its, and to severe effects when we do our quarterly briefing, our question time when people can ask me questions in real time on April 9th. 

It is for our Patreon subscribers at the top tier. So sign up now and learn about all these tariffs as they happen. And then we’ll pull it all together for you and show where it’s going to take the American and the global economy over the long run. See you soon.

Trump Takes on Illegal Immigration

Photo of the US-Mexico border

Trump’s immigration policies have caused quite the stir, specifically his hardline stance on illegal migration. So, how will these policies impact the US economy?

The US is in the midst of needing to double its industrial capacity, which will require a large labor force. Losing the population of 10-15 million undocumented immigrants would dig that hole even deeper. Trump isn’t approaching this from an economic or security perspective, his migration policies are being shaped by ideology.

By making the conditions for migrants worse and cutting off certain paths to legally enter the US, it will inadvertently encourage illegal border crossings and create enforcement inefficiencies. Practices like mass deportations are pulling resources from other important tasks and making future cooperation between the law and migrants less likely.

The better approach would be providing legal pathways for migrants to integrate into the economy, but Trump’s path is creating a permanent underclass.

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Transcript

Hey, everybody. Peter Zeihan here. Coming to you from a chilly Colorado. Today we’re near the most recent in Trump taking on the world. We’re talking about, Trump policies on illegal migration and where they are going to lead. First a little backdrop and, scene setting. A couple things. Keeping in mind, number one, the United States has somewhere between 10 and 15 million under documented people in the United States. 

So that’s a substantial number of folks. And the United States is in the process of doubling the size of its industrial plant. As we prepare for the end of China as a meaningful participant in the trade system, that means a lot of blue collar jobs, and Ford loaded with construction jobs. So, anything that inhibits the labor force is definitely going to inhibit our ability to prepare for a post Chinese world. 

So put that in the back of your mind as we go through the rest of this. There has always been a mixed view of immigration in general on illegal migration, in particular in the United States. As a rule, we go through ebbs and flows. We’re definitely at an ebb right now. And as a rule, the business community has been in favor of larger flows of migration in any form. 

In order to access workforce, that has not changed. What has changed is that with the reshuffling of the American political deck, the business community is no longer in the Republican Party. Other swing voters now. And so they don’t have a say in immigration policy in the way they might have before. So as the United States goes through this transition, as we have a nativist moment and as, the Make America Great Again, movement has basically decided to take a very, very hard line on things like the border and migration. 

Those are the folks that are making policy decisions at the national government. There will be an economic cost for that. The question is whether or not what Michael wants can be achieved. And in doing so, how does that reshape the world? And especially, of course, the United States, another little piece of backdrop, any policy that ignores why people are doing what they are and ascribe somebody else’s motives to them, generally doesn’t work. 

This is one of the reasons why Maoist China was such a disaster. Same with Brezhnev’s, Soviet Union and Chavez’s Venezuela. People used ideology, their own ideology, to ascribe motives to other people and made policy based on that. And that’s a lot of what we’re seeing in Washington right now with the migration question. The official story is that these are a lot of illegal people who are doing a lot of bad things and a lot of crime. 

There’s nothing in government statistics or private sector statistics that supports that. As a rule, migrants are less than one third as likely to commit a crime as an American citizen, largely because they know that the consequences are deportation. For the most part, well over 90%. The people who are crossing the border are coming in, searching of the American dream, a safer place to raise their children, a place where they can work and earn more money. 

And above all, a place where rule of law works better than where they’re from. But by ascribing false motives, the enforcement system is really causing some problems in the short and ultimately the long term. So let’s start with the border, as was introduced under the Bush administration and really built up by size by the time we get to the Obama years, the tendency of illegals crossing north shifted. 

It used to be that you tried to avoid the Border Patrol, but then people discovered things like asylum laws where you could apply for asylum and get into the court system. And after a certain amount of time, get a court case that could rule, a lot of criticism of system where people just to the system. But, you know, you’ve got, people waiting two and three years for court date. 

And it turns out that the vast majority of people do show up, because they do get a relatively favorable reading. What has happened most recently is that the Trump administration has basically shut that down. They’re not even accepting applications. So if you show up to the border, you turn yourself over the border Patrol, they simply turn you around and walk you right back. 

What that has done is encourage people to go back to the old system that we had before the 2000s, and basically just trying to sneak around the Border Patrol. And in doing that, Donald Trump in his first term made it very, very, very easy to cross the border undetected. You remember the border wall? Well, the border wall cuts through the middle of the Sonoran and the Chihuahuan Desert, which are the greatest natural barriers in the Western Hemisphere. 

Fantastic for stopping illegal migrants from flowing. A lot of them just die on the trip. But if you build a border wall, that means you need to build 50 odd construction roads across half of that natural barrier. So all you have to do if you’re an illegal is use a ladder once to quadruple your income, and then you’re on a road. 

And whether you’re working with a coyote or on your own with a dirt bike, all of a sudden it’s gotten much, much easier to cross. So I have no doubt that 20, 30 years from now, when we looked at back of this period, Donald Trump will go down in history as the greatest supporter of illegal migration in American history. 

And that’s before some of these other changes. Ultimately, because most of the people crossing the border north want a better life, they are looking for avenues to cooperate with local government because living in the shadows isn’t great. If you’re an illegal in the United States and you have no chance of getting documentation, you probably only work for cash, which means you’re never going to buy a house. 

You’re only going to rent. And if you pay for everything with cash, robbers tend to identify that and target you. And if you can’t go to law enforcement after you get robbed because you don’t have documentation, you may get deported, you then don’t cooperate with law enforcement, which makes it a lot easier for gangs and cartels to recruit on both sides of the border. 

Or you can provide the illegals with a way to become legal. What’s going on now is that the Trump administration is taking the sharply opposite tact. And that’s going to hurt us in two ways. Number one, he really, really, really wants to have some showy, mass deportations. So he’s redirected other law enforcement to cooperate with Immigration and Customs Enforcement and the Border Patrol, taking people off of other law enforcement duties to send them against illegal migrants. 

He’s been hit very hard by this. But really, there’s none of the three letter agencies that haven’t seen a direction. And that means we’re not looking at things like money laundering or child porn. And there was a really a scary moment when people were starting to be pulled off of active monitoring of terrorist groups internationally, to be put in Chicago to round up illegals. 

Luckily, the Trump administration backed down from that. But we’re seeing basically a hollowing out of the law enforcement capacity at a federal level to focus on this one thing. That’s a problem. Number two, Trump wasn’t happy with the numbers. So instead of going after the criminals, which means you go after people one at a time and you have to investigate to make sure they’re a criminal and you have to do a sting operation to get them. 

They started going after groups of illegals who had shown no propensity for engaging in illegal behavior. So you started just to go to where those people were. So to use the stereotypical ones that had been proven true in the last couple of weeks, they’ve been going to churches on Sunday morning when people are with their families and basically arresting Hispanics in mass. 

They’ve been going to food banks for people who are having problems. They’ve been going to Home Depot where there’s day workers, any place where you’re going to get a concentration of people with a tan have basically been, been targeted by law enforcement in order to generate the numbers that are necessary to meet Trump’s quotas, which he’s handed out to everybody. 

And then once those people are grabbed, Trump tries to make it a very, very showy deportation, mostly using military jets. Well, here’s the fun thing about military jets, the globe masters that they’re using because they’ve got the reach. They’re designed to move like helicopters and tanks and equipment, but not really designed to move people. So you have to put seats in them and they can’t operate nearly as efficiently as, say, as a commercial airliner. 

So it costs about $6,000 a person just to fly them to the country. You’re going to dump them off. And so it’s turned out to be this incredibly expensive operation that has netted very few criminals, but has also introduced a lot of fear into the community because the most recent one, just in the last week, is law enforcement is now going to the asylum hearings for the people who have kept their nose clean and cooperated with the system from the very beginning, and arresting them before they can even go in to get their hearing. 

Or then, of course, if they get their hearing and denied immediately hauling them off in chains. And this is dissuading anyone who is an illegal migrant from ever cooperating with the system. Now go back to what we need to do as a country, double the size of the industrial plant. That’s going to be concentrated in certain areas, which means these illegal migrants are going to be clustered in places where the job opportunities are. 

And now if they can’t cooperate with the federal government, they’re going to live as a permanent underclass, which is going to build up crime possibilities on all sides in all of those cities, and in no particular order, those cities are Salt Lake City, Denver, Phoenix, Albuquerque, El Paso, San Antonio, Dallas, Fort Worth, Austin, Houston, New Orleans, Birmingham, Montgomery, mobile, Atlanta, Richmond, Norfolk, Charlotte, and all of the other major cities of the North Carolina cluster. These are the places where the industrial activity and construction has been concentrated. This is going to be where the Hispanic migrant community is most likely to relocate. And now these are the cities that are most likely to have a starkly increased crime wave, because there is no point in migrants now cooperating with the system. 

We’re going back to the system we had before the 2000s where migrants really were an underclass. I mean, the smart play here is to provide avenues towards legal migration, even if that doesn’t lead towards citizenship, so that the people can be part of the system so they can have a bank account so they don’t get robbed, so they can participate with law enforcement, and to shut the cartels out of our communities. 

But what do I know?

Trump, Cartels, Terrorism and…Increasing Migration

Photo of man in gloves opening cocaine package

Trump had a fat stack of executive orders waiting to be slammed down onto his desk as soon as he took office. One of those was his designation of Mexican cartels as terrorist groups, which will have some unintended consequences.

This new designation does little to address the networks which smuggle drugs into the US, and is largely irrelevant to the deepening fentanyl crisis. But perhaps the biggest hmmm of Trump’s order is that certain victims of terrorism can qualify for asylum in the US, which means millions of Mexicans and Central Americans could now immigrate. Legally.

This kind of “oopsie” is nothing new for Trump, as his border wall inadvertently facilitated illegal immigration by creating new routes to access the US. While Trump claims one thing, his actions may be doing the exact opposite of what he intended (TBD whether it’s deliberate ignorance or incompetence). As we all expected, Trump’s time in office will be nothing short of a wild ride…and I’m going to need some more popcorn.

Prefer to read the transcript? Click here

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Transcript

Hey, all. Peter Zeihan here, coming to you from a Lake Wakatipu in Queenstown, New Zealand. It’s a 21st locally, which means it’s the 20th in the United States, which means that Donald Trump was just inaugurated. And we’ve had several dozen, executive actions, quickly thrown in there. There’s a lifetime of material for me to work with in there, but I’m going to focus on the one that I think is actually most significant to how most Donald Trump supporters view the world. 

And it has with, designating the Mexican cartels who traffic illegal narcotics into the United States as terror groups. 

Okay. Let’s talk about what it does. Let’s talk about what it doesn’t do, and let’s talk about where it’s going to lead us. So what it doesn’t do is strictly loosen the tools of the US military can use on foreign soil, because Mexico is not a country that we are at war with. 

So designating the cartels, sponsors of terror doesn’t really do much unless you also designate the Mexican government as a sponsor of terror. What it does is allows the US government to very easily move against any entities who are associated in any way with the cartels, especially from a financial point of view, especially if they’re victims. So, like if there’s a 

Taqueria in Mexico City that pays protection money to the cartels, this action would target them because of the financial transfers, but it’s not actually going to encourage us Apache helicopters to be flying south of the border and blowing shit up. Keep in mind that, the number one drug that is of concern from my point of view is no longer cocaine. 

It is fentanyl. And fentanyl as a synthetic has a very different supply chain. What happens with cocaine is it starts in Colombia. It’s turned into a leaf. It’s pressed into a brick, it’s refined with gasoline. It’s turned into the white powder that we all recognize. Well, hopefully we don’t. All cocaine is bad. Don’t do cocaine. Anyway, it is smuggled by plane, train or automobile north and eventually makes the jump by water or air to Central America, where it gets on land and it goes into Mexico and up north. 

So interrupting cocaine flows. This is a good thing. We like this. That is not what we’re dealing with. We’re dealing with fentanyl. Fentanyl is a synthetic. And what happens is in China, you get a chemicals company that makes a precursor, which is then processed into another precursor. That precursor is put in the mail and is mailed to the United States. 

And then it is smuggled south across the border to a mom and pop shop that processes a few kilos of this stuff a month, and then that stuff comes north. That is where the money is. That is where the danger is. And this does nothing for that, because the mom and pops aren’t big enough to justify classification as terror groups, because there’s literally thousands of them, as opposed to just a few, cartels anyway, so it’s going after the wrong thing. 

More importantly, when you identify a group as a terror group, you have also identified the people that they prey upon as victims of terrorism. Right? We all agree with this, right? Well, if you identify someone as a victim of terrorism, then they automatically qualify for asylum status within the United States. So what Trump has done with this designation is designate 130 million Mexicans and 50 million Central Americans as automatically qualifying for U.S. immigration protection. 

Now, if you dial back 4 or 5 years ago, I said that Donald Trump will long go down in history as the most pro illegal migrant, president in American history because by building a wall, what he has done is built 50 roads, construction roads that bypass the most robust natural barrier on the North American continent, the Chihuahuan and Sonoran Deserts. 

And lo and behold, it came to be true. And we eventually got 2 million illegal migrants a year. What he has done now is generated the largest inflows of illegal migration of the asylum clause of any American president in American history. Now, normally I would argue that this would mean the end of him, because his supporters will immediately abandon him because he’s done exactly the opposite, or achieved exactly the opposite of what he said he was going to do. 

 But this is Donald Trump, and he defies convention all the time. But it will set the stage for a very different conversation in the United States. And I can’t wait to see how that comes out. 

Oh, one more thing that I would be remiss and saying, this is my last day in New Zealand. I have been drinking, I’ve been doing some wine tastings, and this is not what I would call great analysis. There’s nothing that I just communicated with you that would be any sort of secret to the national security community, the law enforcement community, the folks who are interested in immigration at Pro or Con, or anyone interested in generally security of the border in general. 

But clearly the new president, the president is unaware, otherwise he would not have done it. Because this is going to generate exactly the sort of crisis that he says he wants to solve. The reason for this is very simple. Donald Trump has made sure that there is no one in his inner circle who is capable and competent in the issues that really matter. 

And his cabinet nominations reflect that, the only other two leaders in modern history that I can think of that kind of fall into this category of deliberate blinders, reshaping of China, who is rapidly leading his country into a full out national collapse, and Barack Obama, who hated having conversations with other people to such a degree that he basically hermetically sealed himself into the white House for his eight years. 

Donald Trump now joins those other two as one of the three most deliberately unaware leaders in modern history, which means that of the dozens of executive orders that were just handed down, there is undoubtedly more that fond of his general category of going directly against what Donald Trump says that he stands for, which means that we are in for an incredibly interesting period over the next four years, as, Donald Trump’s leadership or more accurately, the lack of competence in his circle leads to some wildly interesting outcomes. 

And I am here for it.

Can Immigration Solve China’s People Problem?

Photo of Chinese men and women in a town square

China is facing a demographic crisis, but can immigration be used to counter it?

Countries like Canada and Germany have used immigration to bolster their shrinking workforces…with mixed success. China’s demographic problem is a degree of magnitude worse; the rapid industrialization, urban migration and one-child policy all led them down this path (and that birthrate is getting scary low). Immigration isn’t going to save the Chinese…unless they find a way to bring in 30 million young people annually.

So, China can expect a collapse in their workforce and societal coherence within a decade. Everyone else should get out their pen and paper and take notes on how this plays out, and start to prepare for what is to come.

Prefer to read the transcript? Click here

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For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

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Transcript

Hey, everybody. Peter Zeihan here. Coming to you from a snowy Colorado where we’re in the calm between the storms. Two feet behind us, one foot in front of us. Lots of shoveling yet to be done. Today we’re taking an entry from the Patreon forum. The question specifically is: can China use immigration to solve some of its problems?

The scale of the challenge, of course, is huge. And what China has done isn’t really technically immigration. They send their people out to attend universities and pick up technical skills that they can’t get within China, and then they try to bring them back. That has been at least moderately successful. I’d say probably a third to half of the students they send abroad come back. And considering that’s better than zero, you know, take the win where you can get it.

But moving the demographic pendulum is really hard and takes decades, even with immigration. So let me give you a quick three examples.

Canada decided about 15–17 years ago that they were facing a European-style demographic collapse. And so they opened up the doors and, over the course of the next 15 or 17 years, brought in about 4 million people, mostly under age 40. That did stabilize their tax base and their workforce, but it generated 4 million people who needed a place to live. And if you need a place to live, you’re not very price-sensitive. So it caused a housing shortage across the system in the places where there was actually work.

They’re now dealing with the political outcomes of that, which is part of the reason why the Justin Trudeau government is likely to fall in elections next year.

The second example would be Germany, where the birth rate has been dropping for 130 years, ever since industrialization began. But it really fell off the cliff after reunification in 1990.

Now, you would think that you’d have a big optimistic moment like reunification, and the birth rate would go up. The problem is that the East German territories, former East Germany, were economic basket cases, and the Germans collectively spent over €1 trillion trying to rehabilitate the industrial plant and infrastructure. And it was just a waste of money.

So if you’re in the East German system, you saw all this money coming in to try to make your system better, and it all failed. In the meantime, all your young people left, and so your birth rate almost went to zero.

In the West German system, you were paying and paying and paying and paying and paying, and you basically had a 12-year period with negligible economic growth because you were shoveling money into the furnace. So the birth rate dropped there, too.

Of course, it’s a heavily industrialized, urbanized country. When you live in condos, there’s no room for the kids, as opposed to when you live on a farm where there’s all kinds of room for them—not to mention their free labor. So the economic case went away, the emotional case went away, and the birth rate in Germany kept falling.

Probably within the next 7–8 years, we’re looking at about a one-third reduction in the size of the German workforce, and it will only shrink thereafter, with all the implications it has for consumption, tax base, and state coherence.

A few years ago, the Germans let in about a million people from Syria—refugees. And people are like, oh, sorry, demographics? No, they just did that because they were trying to do the morally correct thing. Of the million people, something like 850,000 of them were men. That really doesn’t help the demographic situation in the long run, and that’s before you consider things like language, cultural, and skills barriers.

If the Germans really wanted to solve their demographic problem with immigration, they would need to bring in about 2 million people a year under age 25, every year from now on, just to hold the line. After 20 years, it’s not Germany anymore.

If you’re going to use immigration to stave off a demographic problem, you need to do two things. One, you need to start early before you have much of a problem. And two, you have to have some assimilative capacity so you don’t generate big culture clashes. You want it to be a trickle, not a flood.

Which brings us to China.

Chinese data is getting updated bit by bit by bit. They’re trying to get a grip on their demographic problem. With a population of what they thought was 1.3 billion now looking like it’s closer to 1.1 billion, it may even be less than 1 billion. The scale of what they would need to do is immense.

Also, the trajectory of the Chinese is far worse than the Germans. The Germans industrialized over 130 years. The Chinese did it in about 45.

If you just go back to like 1960, the Chinese birth rate was so high that each woman was having 4–6 kids. Mao was concerned that the young generation was going to eat the country alive—perhaps literally.

So they instituted a two-child policy, which shortly thereafter became a one-child policy. Then the country went through the fastest industrialization process ever. So everyone moved off the farm and into condos and stopped having kids.

We’re now in a situation where officially the birth rate is about 1.2 children per woman. The reality is probably below 1. We already know by official data that in most of the major cities, places like Shanghai or Beijing, it’s already below 0.4 or 0.5.

So you’re talking about one-fourth or one-fifth replacement levels. That means we’re looking at a complete demographic collapse of the Chinese system within ten years. The Germans are practically a slow fade-out compared to what’s happening in China.

Numerically, if you wanted to use immigration, you’d probably be talking about needing to get 30 million people under age 25 every year just to sustain the numbers where they are today. I’m not sure there are that many potential migrants in the world at any given time.

We’re looking at a workforce collapse, a financial collapse, and a state coherence collapse in the not-too-distant future.

The real challenge isn’t how do you save China? It’s gone. We’re just basically marking time.

The challenge in the short term is preparing for its fall because when that industrial plant goes away, we’re going to feel it.

The second challenge, a few years from now, is how do you manage a post-China Asia, where China is in degradation and civilization is in chaos?

Then the longer-term challenge for the latter half of this century will be: what do you do when what was the world’s largest ethnic group vanishes from this world?

When you break down the industrial base—and we’re already in a country where there’s more people over age 50 than under age 50—and they age out to the point that they can’t even maintain their infrastructure, we have a sort of international crisis that we have never seen before.

The Chinese are leading the way. Hopefully, in their fall and dissolution, we can find some lessons that will help us manage other parts of the world that are experiencing extreme demographic decline because they’re not alone.

Undocumented Immigrants’ Impact on US Labor and Economy

Photo of an immigrant in a strawberry field

As of late, the topic of illegal immigration is getting as much airtime as Brittney Spears did in the early 2000s. And I hate to burst your bubble, but all those undocumented immigrants are probably doing more good than harm.

Without the influx of ~2 million undocumented immigrants in 2023, labor shortages would have likely caused higher inflation. As the baby boomers retire and the US needs to re-industrialize, labor needs are skyrocketing; this will be putting a heavy strain on industries like healthcare, construction and agriculture, areas where these undocumented workers are heavily employed. Simply put, without these workers, the US economy would be hurting.

Policymakers have obstructed and neglected meaningful immigration reform since the 80s. However, if we could modernize this system (which would take some political creativity currently lacking in DC), we could realize the full benefits of these immigrants minus the constant political bickering.

Prefer to read the transcript? Click here

Here at Zeihan on Geopolitics, our chosen charity partner is MedShare. They provide emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it, so we can be sure that every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence.

For those who would like to donate directly to MedShare or to learn more about their efforts, you can click this link.

Learn about medshare here

Transcript

Hey, everybody. Peter Zeihan here. Coming to you from Austin, Texas. And today we’re going to talk about everyone’s favorite topic this election season: illegal migration. I’ve no doubt on record saying that if the United States hadn’t had the wave of illegal migration that it had in calendar year 2023—about 2 million people—we’d probably be dealing with inflation north of 8% by now.

So I figured that’s worth a bit of an explanation. In most labor markets, you’ve got a degree of liquidity where workers can move from one subsector to another based on the economic moves and remuneration of the day. But for that to work, you can’t be headed states. You see, here in the United States, the baby boomers are in the process of retiring.

Two-thirds of them have already gone. So we have a labor shortage. In addition, the United States is in the midst of a massive re-industrialization wave as we prepare for the end of the Chinese system. Basically, if we want manufactured products, we have to build it ourselves. So demand has never been higher, and supply has been curtailed. We no longer have that pool of labor that can shift from one thing to the other or be tapped and tracked in terms of building booms.

And so anyone who is removed from the system immediately generates a pulse that goes through the entire network, driving prices higher. So yes, there are 2 million people who crossed illegally last year. Most of them are in the workforce, most here in Texas. As for the folks that are residing here illegally, which, based on whose numbers you’re using, are somewhere between 7 and 14 million.

That’s another huge chunk of the labor force that actually outnumbers the number of folks the United States has who might theoretically be looking for jobs. Unemployment in the United States is below 4%; we’re at historic lows right now. So if you were to remove some of the people who are working, we’d feel it immediately. Now, not all jobs are equal.

These illegal migrants do tend to cluster in three general categories. The first one is health care, particularly when you’re talking about something that’s on the edge of a janitorial job, you know, moving people, clearing bedpans, that sort of thing. The second is in construction, especially industrial construction, because, remember, the United States needs to double the industrial plant.

That doesn’t happen without building a lot of stuff. And third, and finally, agriculture, particularly in fresh foods, whether it’s vegetables or tree fruit. These last two are jobs that Americans just don’t want to do, won’t do, or can’t do. They’re hot. They’re heavy, outdoorsy work—certainly not the sort of stuff that today’s youth, especially Gen Z, is really interested in.

And so that just leaves us with the illegal labor pool. If you were to remove that labor pool, we wouldn’t be able to harvest any of our fruits and vegetables. So say goodbye to most of the produce in grocery stores. We certainly wouldn’t be able to build new homes or new industrial plants, so say hello to dependence on China until China is gone—and then you just don’t have stuff.

And if you don’t want to clean your own bedpan when you go into the hospital or retire, well, then, by all means, be against migration. The question, of course, is whether we can amend our legal structure so that we actually have an updated immigration system to process these people in a way that we find a.

At the moment, we haven’t had meaningful immigration reform in this country since the 1980s, and folks on both sides of the political aisle have taken steps at multiple points to prevent that from happening. So if

you were to wave a magic wand to make this all work better, you’d find a way to induce the would-be illegal migrants to actually collaborate with the system.

And that’s a very different sort of legal structure and enforcement and would require a degree of policy creativity we just have not seen in the White House or in Congress for quite some time

Immigration: Social Costs vs. Economic Benefits

Its easy to sit up in an ivory tower and say immigration is always good because of the economic benefits; however, turning a blind eye to the social implications of immigration would be irresponsible in a well-rounded discussion. Here’s what Canada and Germany have going on:

Canada jumped on the immigration train fairly early in order to counteract their demographic decline. This influx of young immigrants helped stabilize the population, boosted labor productivity, and brought in more taxes than it cost in benefits. Butttt Canada’s social fabric is rapidly changing due to this new (and growing) population of immigrants.

On the other end of the spectrum, we have Germany and they’re not exactly known for their history of immigration. Over the past few years, the Germans have brought in large numbers of refugees from places like Bosnia, Syria and Ukraine. That has created some hefty social challenges, which will only continue to grow as Germany must bring in millions of young immigrants annually to balance its demographics.

While there is a strong economic case for immigration, we must also consider the social and political costs that it comes with. No amount of money can make a round peg fit in a square hole…

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Transcript

Hey, everybody. Peter Zeihan here, coming to you from the top of the Grand Canyon of the 12. I’m in Yosemite, just below Glen Allen. This is where I’m going to be hiking for the next couple of days. Not bad!

Today, we are taking an entry from the Ask Peter Forum, and the question is: Could you go through the numbers on the pros and cons of mass immigration into countries, specifically like Canada and Germany?

People always talk about the economic upside and the tax benefits, but they rarely mention the downsides, like crime and social identity. It’s a reasonable question, especially as we see more and more countries aging. Since we have more nations basically aging out, immigration is often brought up as one of the few, if not the only, possible patches or even solutions.

Let’s start by saying Canada is a special case. Canada knew 30 years ago that they were headed for a German-style demographic implosion. Under the Harper government and later under the Trudeau government, they made the decision to open the floodgates and become an immigrant country. You’ve probably had, I mean, they didn’t count the statistics the same way we do in the United States, but roughly 3 to 4 million immigrants have come in and become Canadians during that period.

Most of these immigrants were in their 20s and 30s, as Canada specifically targeted younger people, unlike the migrants they had received in earlier years. This managed to stabilize the numbers, but only so long as they keep those inflows coming, because native Canadians, to use a church term, still have a very, very low birth rate. There’s no replacement coming from within the population, so a new social fabric is developing.

The numbers, which I don’t have top of mind, I apologize, are unequivocal: the new migrants, especially those under age 40, generate far more in tax payments than they take out over their lifetime. It’s a definite net fiscal benefit. In terms of jobs, as a rule, the people who migrate tend to be the more aggressive, skilled, and educated of their countrymen. This gives you a boost in labor productivity. Not everyone is an Elon Musk, but you get the idea.

Third is crime. Unequivocal data shows that in every country that tracks these statistics, crime committed by immigrants is significantly lower—typically at least a third lower—than crime committed by the native-born population.

Fourth, there’s something people usually don’t think about: education. In the United States, it costs over $150,000 to graduate a kid from high school. That’s just the government cost for education, not the societal cost of raising the child from birth to age 18, including healthcare. One of the benefits of migrants is that, you know, another country has already paid those costs, and now you’re benefiting from their labor. Economically, it’s a very easy case to make.

Two things to keep in mind. Number one: not all migrants are the same. Take the United Kingdom, for example. Indian migrants and family reunification—basically, the UK would bring in one person from India who meets all of these criteria we’ve discussed. But then they bring in their extended family, and all of a sudden you’ve got 60 Indian Brits, half of whom are over 60. It’s a different story if you’re bringing in new retirees; the cost to society can be very, very high.

Also, in the German case, the migrants from Syria—about a million of them—were 80–90% male. So, you’re not getting much of a demographic boost there because there weren’t enough women to have more children.

The second complicating factor is social cohesion. If immigration has been a part of your social fabric for decades or even centuries, absorbing people from different places is relatively easy. Countries like the United States, Australia, New Zealand, and Canada have done this in phases for a long time, so if someone says their parents are from a different country, most Americans won’t even blink. People in the U.S. assimilate very quickly.

But if your country doesn’t have that culture, like Germany, and you suddenly open the floodgates, things start to look very different. The first real wave of migration into Germany happened during the Bosnian wars in the 1990s. Germany did the right thing for the right reason by taking in refugees, but it changed the social character of the country. They did it again in the 2000s with Syrians, and now they’re doing it with Ukrainians. If you wait too long, until there are more people in their 40s than in their 30s, 20s, 10s, or even newborns, you’ll end up with a very different place.

This is the situation that Canada will face—not right now, but in 20 or 30 years. They waited until late in the day to start bringing in millions of people. If it happens over a long enough period, society can adapt. But in Germany’s case, this has all happened relatively quickly. To maintain their demographic standing, Germany may have to bring in 2 to 2.5 million people under age 30 every year for the next 20 years, just to stay where they are. By then, those people will form the majority of the country, which will make it a very different place.

If you look at immigration purely as a numbers game, a fiscal issue, or an economic growth issue, it’s a slam-dunk case. But we don’t live in that world. And you know what we call the gap between the ideal and reality? Politics.