Billing Programs - Research Paper Example

$500,000 (Resident Visa) FOR USA! I. Introduction Recently there is a co ed by Senator Schumer (D-NY) and Mike Lee (R-UT), US VISA offering a three year residential visa to foreigners who will spend at least $500,000 on a residential house, be it a single family house, a townhouse or condominium. The breakdowns were as follows, the $250,000 must be spent on a residential house and the other $250,000 can be invested in other residential properties that can be rented out for profit. This proposed bill may be a novel attempt by our legislators to solve our housing problem without using taxpayer’s money (Wang) but this proposed bill is no longer new. It is similar to an existing program that fast track a foreigner’s green card if they will invest at least $500,000 in American business that creates at least 10 jobs. What are these bills all about? The proposed bill is entitled The Visa Improvements to Stimulate International Tourism to the United States of America Act (or VISIT-USA Act). The pending bill proposes a three year residential visa for foreigners before renewing it who will be investing at least $500,000 in residential properties in the U.S. “A minimum of $250,000 must be spent on a primary residence where the visa holder is required to reside for at least 180 days each year while faithfully paying U.S. taxes. The balance—or more—can be spent on other residential properties, which can be rented out. Moreover, buyers must pay in cash; thus placing no additional burden on our already stressed-out financial system” (Nadelson). The other similar program that already exists and offer similar residency to foreigners is the EB-5 Visa program. The EB-5 visa is created by the Immigration Act of 1990 and provides an easier way for foreigners to get a green card in the United States. The EB-5 visa requires a foreigner to invest $1,000,000 or $500,000 in areas where there is a high unemployment rate. In addition, the business must also employ at least 10 workers for a foreigner to become eligible for the program. There is also another bill that is awaiting consideration in the Senate Judiciary Committee which is the EB-6 visa of the StartUp Visa. EB-6 Visa is sponsored by U.S. Senators John Kerry, District of Massachusette and Dick Lugar, District of Indiana. The proposed visa would give foreign investors and their families a path to permanent residence in the U.S. if they invest at least $250,000. In the proposed StartUp Visa, investors would be given an initial two year visa and when its business had employed at least five workders after two years in business, the said investor would be given a green card. II. Concerns about the bill Indeed, the housing problem in the United States needs to be addressed. Unless the housing industry recovers, US economy cannot be considered as being out of economic crisis. At the onset, the bill looks novel and positive because it intends to solve the housing problem without any cost to the Federal Government. This however comes with a price of citizenship to foreigners whom we do not know and being such, might bring in unintended problems (Sarner). This necessitates a close scrutiny of the proposed bill if its intended benefits outweigh its projected issues. In addition, there is already a similar program in placed and one cannot help but ask, “what is really new with this bill?” Cost benefit analysis of the proposed bill under the lens of economics The first question that needs to be addressed is whether such bill will solve the housing problem in the US without first considering other factors such as security and social service. Scrutinizing it strictly under the lens of economics, the bill seems to be promising. The rest of the world especially China has performed relatively well compared to the United States (2% GDP compared to China’s 9.7% in the first half of 2011) in terms of combating the economic crisis and being such, it has the economic capability to make such purchase. Economically, it seems to be a win-win solution because it is beneficial to the foreigner who is going to buy the house for he or she also gains an extended stay. It is also beneficial to the US economy as it stimulates demands to the slumping housing industry. Anxiety against terror and the safeguard mechanism of the bill The bill will surely invite the influx of foreigners into the United States. We cannot help but worry that this sudden influx of foreigners might cause us security problems. It is already a given that there are terrorist and criminal elements that would like to harm the United States and this raises the question on how to prevent these undesirable elements from getting into the country by cashing on the bill (Jones). If those undesirable elements cannot be prevented from entering into the United States, the proposed bill might be bringing in more problems than what it intends to solve. Safeguard mechanism of the proposed bill It is a good thing that the proponents of the bill has anticipated these security issues and have incorporated security mechanism against the possible security drawbacks of the bill. While the offered extended stay to prospective foreign buyers of $500,000 real estate is available, it does not automatically mean that any foreigner can avail it. “Applicants will remain subject to the rigorous criminal and national security background checks” and those with criminal records, suspected ties to terrorist organizations or drug cartels and other troublesome activities will be barred from qualifying. Once approved, applicants will not also be eligible for such government benefits as Medicare, Medicaid, and Social Security. In effect, the proposed bill functions just as an extended travel visa for three years “subject to a strict renewal process; and not allow its recipients to obtain an American job or enter the path to citizenship” (Nadelson 2011). This mechanism in the bill provides a comfort of relief from our worries. It addresses two of our biggest concern which is security and the bludgeoning of our social services. The bill does not offer path to citizenship but only a convenient way of extending a foreigner’s visit to the United States. It is also wise to incorporate a mechanism of expiration of a foreigner’s stay and subject it to renewal process to provide the US government a leeway to scrutinize and review if the foreigner who availed the benefit of such law maintained a good standing during its stay in the US. Such renewal process empowers the US government to rebuke the visa extended to any foreigners who abuses such privilege or poses a threat not only to the US society but the Federal government as well. This feature of the law is critical because for sure, there will undesirable elements that could sneak in despite the rigor screening process. This mechanism provides the government to review and empowers it to rebuke those who proved to be a liability or a threat to the US government and community. In effect, the law is really just an extended tourist visa only that instead of renewing the visa every six months, foreigners can stay longer (three years) before renewal providing them the convenience of an extended stay. It is not also permanent and is not a path to citizenship. What the bill really offers is just an extended tourist visa with a price tag of $500,000. It is not however unfair to a foreign visitor. In exchange of shelling out $500,000, he or she will have a US property that can be used and rented out for profit. If the foreigner decides to leave the US, such property can be resold where the initial cash outlay to purchase can be recovered. Worries about burdening the Social Service The proposed bill has also an effect of increasing US population because foreigners who are able to afford a $500,000 house and decides to cash on the proposed bill could come in the country. It leads us to worry that it might burden our already bludgeoned social services. Additional population also requires more social services that include more hospital, more schools, more policemen etch that could take toll on the finances of the Federal Government. Mechanism against burdening our social service With regard to the pressing concern that the bill might bludgeon or exert pressure on our security services, the bill has a mechanism that will protect the Federal government from the social cost of an increased population. Foreigners who will avail of the $500,000 resident visa will automatically be excluded from the state funded medical service Medicaid, Medicare and Social Security. In effect, foreigners will not burden our already bludgeoned medical system. In addition, those who can afford a $500,000 real estate property in cash can certainly afford to take care of themselves. Or they can go back home to their country of origin if they get sick to be taken cared of better by the foreigners family members. The only social security cost associated to this bill is in terms of providing these added foreigners security and maintaining peace and order. These costs are however minimal compared to the benefit that will be derived from foreigners who will be buying real estate properties that has almost no domestic demand. The benefit of stimulating the demand of our slumping housing industry far outweighs these associated costs and being such, does not pose much of an issue Worry of selling our birthright to foreigners The worry that United States might be sold off to the foreigners to the point that we will not already own our country when we sell real estate property is really a baseless anxiety. First, it is already happening. Even without the law, foreigners can already buy property in the US. What the law intends to achieve is to sell properties which is generally unwanted to create demand and increase its price. As of today, the housing industry is still tremendously depreciated and the demand has to be stimulated to increase its price. So as of today, selling US property can in fact be beneficial to us and the economy. Besides, United States land coverage is just so big for us to worry that all of it will be sold off. Advantage and disadvantage Advantage a. The obvious advantage of the proposed bill is that it has the potential of stimulating demand in the housing industry which could lead to its recovery. b. When money starts pouring in the housing industry, it will create what economist call “ripple effect”, meaning other people will have more money to spend which will reinvigorate domestic consumption which is needed for the whole US economy to recover. c. When demand in the housing industry increases, it will also lead to the increase of its price and the industry will no longer be in a slump. d. It will be convenient for the foreigner because he or she no longer has to renew visa every six months but instead only once in every three years. Disadvantage a. Opening the border to many people can render the US vulnerable to the threat of undesirable elements who wants to inflict harm among the citizens of America. Terrorist and criminal elements may be able to pass through the screening process and be among us. b. The influx of too many people in the United States also means that there will be too many people to look after and that could strain the federal budget. Effects on the job market and housing market The net effect of the proposed visa in the job market will be reduced unemployment. Since there will be more money that will be circulating in the economy, it will increase domestic demand and encourage producers to expand to meet the increasing demand. Expansion meant hiring more employees and as such, it will decrease domestic unemployment. When there is a stimulated and increased demand in the housing market, prices will tend to go up. When it does, housing will no longer be in a slump because they will no longer have to be sold below their actual value. The EB-5 visa and the proposed EB-6 In addition, this proposed bill is not really that new. There is also an existing program which is EB-5 visa that even provides permanent residency to investors and their dependents who will invest $1,000,000 and $500,000 who would maintain at least 10 employees in areas which has high unemployment rate. The only difference about this proposed bill with the existing EB-5 visa is that the risk associated to the foreigner is minimal because the foreigner does not have to engage in business which has a potential of losing money if the business will not click. It is intended to stimulate the demand in the housing industry by providing foreigners the incentive of an extended stay. There is even another bill that is proposed called the EB-6 or StartUp visa which in effect reduces the capital requirement of setting up a business to obtain a permanent resident visa. Compared to Eb-5 program which requires $1,000,000 and $500,000 capitalization in areas of high employment with 10 employees requirement, the StartUp visa only requires $250,000 capital outlay with only a 5 employee requirement. III. Conclusion After considering the costs associated to the intended benefit of the The Visa Improvements to Stimulate International Tourism to the United States of America Act (or VISIT-USA Act), I conclude that the benefits far outweigh the costs. In addition, the unintended consequences of the law are minimal because the main features of the law are already practiced and have not affected the US negatively. In principle, this is already being implemented in EB-5 program and so far, the existing program has been beneficial that it even encouraged the filing of a similar bill called EB-6. So there is really no reason to worry about the ill effects of the VISIT-USA Act. Basically, the bill just extends the stay of foreigners before renewal and we have been accommodating or even encouraging foreigners to visit the US to stimulate our economy. This bill specifically intends to stimulate the housing industry. Foreigners also have been buying and selling properties in the US. What the proposed bill wanted to achieve is to make foreigners purchase real estate property today to stimulate the demand in the housing industry so that the industry will recover which will ultimately redound to the recovery of the entire economy. Security wise, the proposed bill has integrated mechanisms to empower the US government to rebuke the visa of undesirable foreigners who were able to get in through the bill. It will not also burden our social services and foreigners will not compete with Americans in availing the state funded medical and social security services. If they can afford a $500,000 real estate property in cash, they can surely afford to take care of themselves. The real cost of this proposed bill is just the increased resources needed to maintain peace and order with an increased population. But considering the benefits that can be reaped from a recovered housing industry and stimulated economy, this associated costs can easily be cancelled out by these benefits. While having an increased population will have an added cost to the government in some measure in maintaining peace and order, this increase in population will become desirable because the added population are those who can afford, who could bring business and put in money in the economy through their expenditures. Basically, the bill just intends to keep tourists who can spend longer in the US to stimulate the economy. This bill may be unusual and to some extent novel, but according to Senator Lee in summary, this proposed bill is a just a “support to a free market method of increasing demand for housing at a time when so many working-class Americans are underwater on their homes, are desperate for prices to rise again, and big-government programs have failed to work.” Such, these foreigners who are going to avail of the bill should not be viewed as a threat that would compete with Americans for social services and opportunities. Rather, as a help who would not compete with opportunities but who would help create more needed opportunities by stimulating the housing industry that has long been dead. My own take on the bill is that it helps to be nice to foreigners. It can drive the prices of the housing industry up and help the economy recover while creating jobs along the way. All the worries and anxiety about the unintended consequences about the proposed bill has been adequately anticipated, responded and had instituted mechanisms that will guard against unintended consequences. In addition, the projected benefit from the bill far outweighs than the anticipated costs. The proposed bill should be supported to be passed into law. Works Cited Wang, Jim. “Your take: Residence Visa to foreigners who buy $500,000+ homes. Online. October 28, 2011.http://www.bargaineering.com/articles/residence-visa-foreigners-buy-500000-homes.html Jamie Sarner. “US Residential Visas for Buying a House?” online. November 8, 2011. Retrieved at http://jamiesarner.com/toronto-real-estate/2011/11/us-residential-visas-for-house/ Nadelson, Ja. “$500,000 home purchase comes with residency visa”. Online. November 1, 2011. Retrieved at http://www.realtown.com/nadelson/blog/home-purchase-visa Jones, Ronald. “Buy a home, get a US visa, Senators propose”. Online. October 2011. 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