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For those HD readers that want to know about the future of two of our biggest entitlement programs.
A new study from the Cato Institute about who pays more in Social Security and Medicare taxes than actually receives in benefits that has resulted in a $1.7 trillion benefit to those two programs. Listen or read the piece on Markeplace.
https://www.marketplace.org/story/2026/02/23/immigrants-reduce-deficits-study-shows
I had a 401(k) plan customer about 25 years ago who called me with an unusual question. It was a company in NJ that hired immigrants from Haiti and Puerto Rico. They provided burlap products to the landscaping industry. It was backbreaking work. She told me that a long-time employee approached her to say he had become an American citizen after being here over 20 years. When he gave her his paperwork and SS number she realized he had been using someone else’s name and number for all that time. She asked what to do. I referred her question and ultimately all they told her to do was sign him up as a new employee with the correct name and SS number and ignore the past 20 years. She complied and never heard from any government agency while I was involved. Crazy, right?
Pretty unfortunate for the worker too who will get no credit for those 20 years of taxes paid. Although it may be possible to link the records of earnings. Frankly, I think that would be fair.
According to the piece, “the biggest finding is that immigrants have generated a cumulative $14.5 trillion, in real 2024 dollars, in deficit reductions over the last 30 years. If you look at just illegal immigrants, their net benefit, it’s about $1.7 trillion. And what’s really going on there is that illegal immigrants are largely excluded from the biggest public benefits programs — and those are Social Security and Medicare.”
So one can come to the conclusion that without immigration, legal or illegal, our national debt would be over $50 trillion.
And our SS and Medicare would be in worse shape too. The effort to remove the undocumented will have many economic consequences we don’t seem to talk about.
A former boss (when I was working in the Middle East) told me that when he was in university, he and a number of his fellow Irish countrymen would take summer jobs on the New Jersey shore. They were aware of the format for Social Security numbers and when the job application asked for their number, they filled in any 9-digit sequence. The employer(s) apparently didn’t care or didn’t bother to do any kind of check.
I have been writing here for years that one of the solutions to the funding of both Medicare and Social Security is to INCREASE immigration. The ratio of earners to beneficiaries has been a major driver of the drawdown of reserves. Even if, God forbid, we get to the point where Social Security benefits are cut due to payments in being the only source of income for paying out benefits some of the damage could be mitigated by increase income from working immigrants.
Also the claim that undocumented immigrants take jobs from Americans is a straw man argument as they more times than not take jobs Americans don’t want. A recent study I heard about showed the vast majority of Americans prefer desk jobs working on computers, not manual labor.
Family farms, restaurants and building contractors are already seeing their livelihoods not only threatened but destroyed by the current immigration crackdown. Farmers are losing permanent picking crews en masse, partly because even where farmworkers themselves are legal and authorized, they have family members who aren’t, and the raids are driving them away from longtime employers.
I just read an article on CNN about how difficult it is for a major developer in Minnesota to get subcontractors to complete homes because both undocumented and Latino US citizens are afraid to go to construction sites.
Thanks, Nick. This is certainly an inconvenient truth.
It has been well know that illegals immigrants pay FICA taxes totaling billions of dollars a year using false SS numbers given to employers who don’t check or care. Those workers are ineligible for benefits so are subsidizing both programs. It is estimated that such workers are about 5% of the US workforce.
How can you pay taxes into SS using a “false” SSN, but then not receive benefits under that same SSN? I think it’s been conclusively demonstrated that the federal government doesn’t know who is getting benefits. I don’t believe that the SS Administration suddenly and magically figures out who is a citizen when it comes time to pay, but they were completely oblivious at the time of collecting the money.
I will link a couple of government commentary’s on how they discover and deal with earnings reported incorrectly using a social security number. I will put the second link in a separate post so this post is not held pending review.
In a nutshell after the reported W-2 earnings are electronically filed with the SSA (where employers initially file the W-3 & W-2) the earning information (the W-2) is forwarded to the IRS. Read this SSA post.
If the reported earnings are not on your 1040 or if a 1040 is not filed for the reported earnings then the IRS sends you a notice.
It is unlikely you are unwilling to pay income tax on earnings that are not yours to get a SS benefit at some point in the distant future.
Additional, the quarterly unemployment reports filed with the states have similar safeguards.
See my following post to a relevant link to the IRS.
IRS – Understanding your CP01E notice.
You need more than a number to claim SS or get a valid card. No, it hasn’t been demonstrated govt doesn’t know who is getting benefits. It has been demonstrated that record keeping systems are not adequate or accurate, but that is very different from actually paying benefits.
If you were here illegally and never got a work permit, would you risk trying to claim benefits, especially when the number you used was fake or for another person or deceased person?
To apply for benefits you need
• Your Social Security card or a record of your SSN.
• Proof of age/birth: Original birth certificate (or certified copy from the issuing agency), or other proof like a religious record. They must see originals/certified copies—no photocopies or notarized versions accepted for this.
• If not born in the U.S.: Proof of U.S. citizenship or lawful alien status (e.g., passport, naturalization certificate, permanent resident card). Must be original/certified and unexpired.
• Military service records: Copy of discharge papers (e.g., DD-214) if you served before 1968 (photocopy OK).
• Recent earnings proof: Copy of W-2 forms and/or self-employment tax returns for the last year (photocopy OK).
• If applying for family benefits (spouse/child): Their birth certificates, SSNs, marriage/divorce/death certificates as needed.
• Bank info for direct deposit: Routing number, account number (or opt for Direct Express card if no bank account).
Institute that loves mass immigration says immigration is good, more news at 11.