Mexico has never fully recovered from the Mexican-American War, where in the post-war treaty they conceded half their territory including California, Texas and additional land that now makes up 7 other U.S. states in whole or in part. Still, for a country that remains a fourth the size of the contiguous United States and has 120 million people, they hit far below their weight and are plagued by a perpetual drug war with Mexican cartels that has killed over 120,000 people as of 2013; violence whose consequences spill into the U.S. Recently the U.S. Department of Agriculture released its projections for the worlds top 20 economies in 2030 and placed Mexico below 7 other countries with fewer people. What Mexico truly needs is a massive infusion of investment capital and a firm set of governmental laws and institutions which instill investor faith and further drive down the risk and cost of capital.
The United States meanwhile faces its own challenges as the 21st Century continues on. The economic dominance we have enjoyed since World War II is destined to end as China and India further develop. It comes down to sheer population, we have 320 million people, and China and India each have a billion more people than that. The European Union already has over 500 million people with many potential countries still awaiting membership. The United Nations even projects Nigeria to have over 800 million people by 2100.
Economic power is more than just bragging rights, there is a reason why Japanese Prime Minister Shinzō Abe recently apologized before the U.S. Congress for World War II atrocities while offering nothing for his smaller Asian neighbors, and there is a reason why the U.S. continues to set preferential terms for trade deals like the Trans-Pacific Partnership. The larger and stronger our economy the better our bargaining position is, and countries like the Philippines are more likely to give the U.S. favorable treatment when were able to delivery timely aid on an aircraft carrier after disasters like Typhoon Hainan. Also, the ability to exert painful economic sanctions and attach conditions to aid packages is a fundamental part of American soft power. Economic size matters, and without intervention by 2050 the U.S. will have to transition into a multipolar world where the balance of power is shared between the United States, China, India, and the European Union.
The Big Idea: American corporations and individuals have trillions of dollars parked overseas that will never be repatriated home because of tax evasion. The United States should offer Mexico admission into the U.S. with the stipulation that if they accept, all offshore American money will be granted an indefinite tax holiday provided it is invested into the Mexican states. Combined with the Mexican states now being under United States law and governmental institutions, the risk on normal non-offshore capital will be substantially lowered and Mexico would be flooded with investment capital. The Mexican states could rapidly achieve sufficient parity with the rest of the United States within a few decades. Asian tigers such as Japan, South Korea, and Taiwan modernized in a similar time frame without the benefit of such an extreme injection of capital.
By 2050, a new, much larger and more populous United States of America would easily be able to remain at the global forefront. The new, bilingual nation would be given a strong competitive advantage in doing business with an increasingly prosperous Central and South America and help steer our focus away from the Middle East and closer to home. Tens of millions of Mexicans could be brought from near poverty to first world standards in little more than a generation. Geographically, the new United States would trump competitors China, India, and the European Union by having more coastline, more navigable rivers, more deep water harbors, more renewable resources, and more space with a lower population density. Mexico isnt even opposed to the idea, as a Mexican University survey in 2013 showed 60% of respondents in favor of joining the United States.
Synergistic benefits to Mexican admission:
1. Quell drug violence The U.S. military and intelligence organizations could do what Mexico couldnt, and quickly destroy the Mexican cartels. Tens of thousands of lives could be saved, and the violence that plagues the Southwestern United States could be eradicated with American resources put to the task.
2. Demographics The United States as it is now is relatively blessed to not have a declining and stagnant population, like Europe or soon even China, but Mexico's median age is more than a decade younger than the United States, and Mexican admission into the Union would make the United States' demographics younger still, and provide more young able-bodied workers to support and offset Americas elderly.
3. Elimination of Trade Barriers and Economies of Agglomeration The United States is Mexicos largest trading partner, and Mexico is Americas third largest. Admission into the Union would erase the trade tariffs between the two former neighbors and the new United States would become richer as more gains from trade are to be kept, and more economic production is now profitable (tariffs increase cost of production, dissuading economic activity). As more economic activity such as manufacturing is diverted into the Mexican States away from Asia this would weaken China, our primary strategic foe going forward, as well as reduce transportation costs and produce cheaper goods. Also, when Mexican and American industries previously separated by tariffs and borders converge in the marketplace economies of scale, conglomeration, and network effects would inevitably result that would increase the overall aggregate output by pushing the costs of production down.
4. Free up factors of production Borders create inefficiencies in distributing land, labor, and capital to their most efficient use, no matter how well constructed the best free trade agreements are. With Mexican admission into the United States these resources can flow more efficiently to where theyre needed. Laborers from America can move into Mexican manufacturing plants, farm workers in Mexico can move to California and the southeastern U.S. where theyre needed, and previous capital from American corporations which had no further use in growing the corporation (such as dividends paid out by AT&T) can move into Mexico where theyll have newfound use.
5. Increased domestic market Mexican states that have been brought to parity with the rest of the United States would increase the American domestic market by at least 30%, resulting in more jobs to cater to that demand, and an increase in portfolio returns for retirement and savings.
6. Border patrol savings and increased homeland security The new U.S. southern border with Guatemala and Belize would be much smaller and thus much easier to defend, saving money and resources, and making the country more secure.
7. Military spending reduction The Mexican military would be largely redundant. The United States military as it exists now is too large given our population size and lack of threats by nation-states such the old Soviet Union, but it could be kept the same size or even reduced after Mexican admission and still be easily sufficient for the new, larger United States. Military spending as a percentage of the budget would thus be reduced, freeing money for other uses.
8. Reunification Mexico would be reunited with its lost territories under the new United States, and Mexicans would be free to become Californians or Texans again. Conversely, Americans seeking a more perpetually warm climate would have more than Florida and Southern California to turn to.
9. Seat at the table Any idea such as this could be construed as an American advocating American imperialism and an attempt to swallow up Mexico. At 120 million people, swallowing up Mexico would not be remotely possible. The Mexican States would have roughly 30% of the seats at the table of the new United States, if divided proportionally by population, and it is very probable they would have more than that as the decades roll on, given Mexicos lower median age and higher birth rate. The Mexican States would be well-represented after admission and be an integral voice in the new United States. Mexico would no sooner lose its identity than Vermont and Texas have become homogenized and indistinguishable from each other by being parts of the same country.
10. Hegemonic Stability A well known theory in the field of International Relations is that the world is more peaceful when there's a world hegemon to set and enforce the norms of relations between nations. There's evidence that this is true, as during Pax Britannica (1814 - 1914) and Pax Americana (1945 - present day) the world has seen relative peace, and during the interwar period (1919 - 1939) when there was no clear world hegemon global trade broke down and the world devolved into regionalism, conflict, and ultimately world war. Will a multipolar world remain as peaceful as the post-WWII order has been? The simmering territorial disputes in the South China Sea as China attempts to steal the territorial waters from its smaller neighbors may provide the answer.
11. Human Achievement Small nations such as the Solomon Islands dont have a Center for Disease Control or NASA. Europe has a space agency only by combining the efforts of 22 member nations. Such endeavors to further human achievement are only capable with large scale collusion in nations such as the United States where the economic tax-base, educational institutions, and a large educated populace come together. A few decades after Mexican admission into the Union, the new United States will have far greater capacity to achieve such dreams as exploring Europa, ending Alzheimers Disease, or curing cancer. The ultimate goal of Mexican admission into the United States is to create something greater than themselves.
TL;DR Summary: American corporations and its wealthy elite have trillions of dollars parked overseas that wont ever be brought back home. The United States could offer Mexico admission into the Union with the stipulation that all American offshore capital will be granted an indefinite tax holiday on any money invested into Mexico. The Mexican states under American laws and with this capital infusion could then rapidly equalize with the rest of the U.S. to make a new, stronger United States that could effectively hold off coming challenges from China, India, the European Union, and even Nigeria later in this century.
The United States meanwhile faces its own challenges as the 21st Century continues on. The economic dominance we have enjoyed since World War II is destined to end as China and India further develop. It comes down to sheer population, we have 320 million people, and China and India each have a billion more people than that. The European Union already has over 500 million people with many potential countries still awaiting membership. The United Nations even projects Nigeria to have over 800 million people by 2100.
Economic power is more than just bragging rights, there is a reason why Japanese Prime Minister Shinzō Abe recently apologized before the U.S. Congress for World War II atrocities while offering nothing for his smaller Asian neighbors, and there is a reason why the U.S. continues to set preferential terms for trade deals like the Trans-Pacific Partnership. The larger and stronger our economy the better our bargaining position is, and countries like the Philippines are more likely to give the U.S. favorable treatment when were able to delivery timely aid on an aircraft carrier after disasters like Typhoon Hainan. Also, the ability to exert painful economic sanctions and attach conditions to aid packages is a fundamental part of American soft power. Economic size matters, and without intervention by 2050 the U.S. will have to transition into a multipolar world where the balance of power is shared between the United States, China, India, and the European Union.
The Big Idea: American corporations and individuals have trillions of dollars parked overseas that will never be repatriated home because of tax evasion. The United States should offer Mexico admission into the U.S. with the stipulation that if they accept, all offshore American money will be granted an indefinite tax holiday provided it is invested into the Mexican states. Combined with the Mexican states now being under United States law and governmental institutions, the risk on normal non-offshore capital will be substantially lowered and Mexico would be flooded with investment capital. The Mexican states could rapidly achieve sufficient parity with the rest of the United States within a few decades. Asian tigers such as Japan, South Korea, and Taiwan modernized in a similar time frame without the benefit of such an extreme injection of capital.
By 2050, a new, much larger and more populous United States of America would easily be able to remain at the global forefront. The new, bilingual nation would be given a strong competitive advantage in doing business with an increasingly prosperous Central and South America and help steer our focus away from the Middle East and closer to home. Tens of millions of Mexicans could be brought from near poverty to first world standards in little more than a generation. Geographically, the new United States would trump competitors China, India, and the European Union by having more coastline, more navigable rivers, more deep water harbors, more renewable resources, and more space with a lower population density. Mexico isnt even opposed to the idea, as a Mexican University survey in 2013 showed 60% of respondents in favor of joining the United States.
Synergistic benefits to Mexican admission:
1. Quell drug violence The U.S. military and intelligence organizations could do what Mexico couldnt, and quickly destroy the Mexican cartels. Tens of thousands of lives could be saved, and the violence that plagues the Southwestern United States could be eradicated with American resources put to the task.
2. Demographics The United States as it is now is relatively blessed to not have a declining and stagnant population, like Europe or soon even China, but Mexico's median age is more than a decade younger than the United States, and Mexican admission into the Union would make the United States' demographics younger still, and provide more young able-bodied workers to support and offset Americas elderly.
3. Elimination of Trade Barriers and Economies of Agglomeration The United States is Mexicos largest trading partner, and Mexico is Americas third largest. Admission into the Union would erase the trade tariffs between the two former neighbors and the new United States would become richer as more gains from trade are to be kept, and more economic production is now profitable (tariffs increase cost of production, dissuading economic activity). As more economic activity such as manufacturing is diverted into the Mexican States away from Asia this would weaken China, our primary strategic foe going forward, as well as reduce transportation costs and produce cheaper goods. Also, when Mexican and American industries previously separated by tariffs and borders converge in the marketplace economies of scale, conglomeration, and network effects would inevitably result that would increase the overall aggregate output by pushing the costs of production down.
4. Free up factors of production Borders create inefficiencies in distributing land, labor, and capital to their most efficient use, no matter how well constructed the best free trade agreements are. With Mexican admission into the United States these resources can flow more efficiently to where theyre needed. Laborers from America can move into Mexican manufacturing plants, farm workers in Mexico can move to California and the southeastern U.S. where theyre needed, and previous capital from American corporations which had no further use in growing the corporation (such as dividends paid out by AT&T) can move into Mexico where theyll have newfound use.
5. Increased domestic market Mexican states that have been brought to parity with the rest of the United States would increase the American domestic market by at least 30%, resulting in more jobs to cater to that demand, and an increase in portfolio returns for retirement and savings.
6. Border patrol savings and increased homeland security The new U.S. southern border with Guatemala and Belize would be much smaller and thus much easier to defend, saving money and resources, and making the country more secure.
7. Military spending reduction The Mexican military would be largely redundant. The United States military as it exists now is too large given our population size and lack of threats by nation-states such the old Soviet Union, but it could be kept the same size or even reduced after Mexican admission and still be easily sufficient for the new, larger United States. Military spending as a percentage of the budget would thus be reduced, freeing money for other uses.
8. Reunification Mexico would be reunited with its lost territories under the new United States, and Mexicans would be free to become Californians or Texans again. Conversely, Americans seeking a more perpetually warm climate would have more than Florida and Southern California to turn to.
9. Seat at the table Any idea such as this could be construed as an American advocating American imperialism and an attempt to swallow up Mexico. At 120 million people, swallowing up Mexico would not be remotely possible. The Mexican States would have roughly 30% of the seats at the table of the new United States, if divided proportionally by population, and it is very probable they would have more than that as the decades roll on, given Mexicos lower median age and higher birth rate. The Mexican States would be well-represented after admission and be an integral voice in the new United States. Mexico would no sooner lose its identity than Vermont and Texas have become homogenized and indistinguishable from each other by being parts of the same country.
10. Hegemonic Stability A well known theory in the field of International Relations is that the world is more peaceful when there's a world hegemon to set and enforce the norms of relations between nations. There's evidence that this is true, as during Pax Britannica (1814 - 1914) and Pax Americana (1945 - present day) the world has seen relative peace, and during the interwar period (1919 - 1939) when there was no clear world hegemon global trade broke down and the world devolved into regionalism, conflict, and ultimately world war. Will a multipolar world remain as peaceful as the post-WWII order has been? The simmering territorial disputes in the South China Sea as China attempts to steal the territorial waters from its smaller neighbors may provide the answer.
11. Human Achievement Small nations such as the Solomon Islands dont have a Center for Disease Control or NASA. Europe has a space agency only by combining the efforts of 22 member nations. Such endeavors to further human achievement are only capable with large scale collusion in nations such as the United States where the economic tax-base, educational institutions, and a large educated populace come together. A few decades after Mexican admission into the Union, the new United States will have far greater capacity to achieve such dreams as exploring Europa, ending Alzheimers Disease, or curing cancer. The ultimate goal of Mexican admission into the United States is to create something greater than themselves.
TL;DR Summary: American corporations and its wealthy elite have trillions of dollars parked overseas that wont ever be brought back home. The United States could offer Mexico admission into the Union with the stipulation that all American offshore capital will be granted an indefinite tax holiday on any money invested into Mexico. The Mexican states under American laws and with this capital infusion could then rapidly equalize with the rest of the U.S. to make a new, stronger United States that could effectively hold off coming challenges from China, India, the European Union, and even Nigeria later in this century.
