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The Cowering Giant (NPG Footnote)

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An NPG Forum Paper
(NPG Footnote) 
by Lindsey Grant
October 1995


I think I have found a job for the U.S. Army.

Last December, the Mexican peso collapsed, losing 40% of its value against the dollar. The Clinton administration reacted by calling upon Congress to authorize $40 billion in loan guarantees to prop up the peso. The President said that it “would help us better protect our borders.” The Treasury Department put out a projection showing a potential influx of some 460,000 illegal immigrants if the Mexican Government should default on its international obligations.

A $40 billion commitment to stop 460,000 refugees works out to $87,000 per potential entrant deterred. A pretty costly bill. In fact, the number was largely mythological, an unwarranted projection from a speculative study of past correlations between Mexican economic conditions and migration, which itself had concluded that most of the influx would be temporary. (In defense of the Mexicans, no Mexican is on record as making the threat.)

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