Billionaire Elon Musk has never been a stranger to controversy, but some recent comments he made about immigrants, Medicare and Social Security elicited a thoughtful response from a research fellow at the Center for Retirement Research.
Geoffrey Sanzenbacher, who is also an economics professor at Boston College, explained that as a general rule he would rather stay out of day-to-day news cycle drama, but those words got his attention.
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Discussing his perception of waste and fraud in entitlement spending on Fox Business Network, Musk suggested that if it were eliminated, there was $600 billion to $700 billion annually that could be saved.
“That’s also the mechanism by which Democrats attract and retain illegal immigrants, by essentially paying them to come here and then turning them into voters,” Musk said. “This is why the Democrats are so upset about the situation. If we turn off this gigantic money magnet for illegal immigrants, then they will leave and they will lose voters.”
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Sanzenbacher wrote about why he decided to publish a formal response to Musk’s words.
“When a prominent car manufacturer and space enthusiast currently in the Trump Administration claimed that entitlements are a way to attract unauthorized immigrants to the country to vote for Democrats, I’ll admit that it caught my eye,” he wrote.
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Economist reacts to Elon Musk’s words on Medicare, Social Security
Sanzenbacher explained his reasoning on how he decided what specific subjects to write about in his response.
“Let’s ignore the fact that unauthorized immigrants can’t vote (and no one has turned up evidence that they fraudulently do in any large number),” he wrote. “Instead, let’s focus on two reasonable questions.” Â
First, Sanzenberger examined whether these programs serve as an incentive for unauthorized immigrants to come to the U.S.
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His findings indicate that unauthorized immigrants are not eligible for Medicare or Social Security retirement benefits, and there is no substantial evidence that they receive these benefits fraudulently in large numbers.Â
In fact, many contribute to these programs through payroll taxes without being able to claim benefits, which actually strengthens the financial health of the two federal programs.
“To the extent that unauthorized immigrants ‘participate’ in these programs, they do so on the revenue side,” Sanzenbacher wrote. “In short, mass deportations will hurt the programs’ trust funds, not help them.”
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Musk’s claim that Medicare, Social Security incentivize illegal immigration is examined
The second question Sanzenbacher addressed was whether expanding authorized immigration would negatively impact the financial stability of Social Security and Medicare.Â
While the long-term effects are complex, research suggests that immigrants tend to be net contributors rather than financial burdens. They pay into the system, receive benefits, and have children who continue the cycle.
“On the Medicare side, the potential for positive impact exists largely because immigrants spend less on health care than those born in the United States,” Sanzenbacher wrote.
“On the Social Security side, the potential for positive impact stems from this same feature – immigrants are often younger people who work,” he continued. “This fact means that new immigrants contribute to the system at exactly the time we need it – as the baby boomers age.”
Sanzenbacher is careful to explain that he does not support unrestricted immigration, recognizing important concerns. For example, increased immigration could affect wages, especially in specific industries.Â
Policies might need to target labor shortages in key professions. While immigrants contribute to long-term economic growth, short-term costs like education and infrastructure require fair distribution. These discussions are essential to shaping immigration policy.
“However, we can never get to these sorts of questions if we start with the complete fiction that immigrants are coming here to take advantage of entitlements,” Sanzenbacher wrote.
“If anything, these programs take advantage of them.”
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