A heated exchange between prominent economist Justin Wolfers and Sen. J.D. Vance (R-Ohio) has reignited the debate over immigration’s economic impact, highlighting conflicting interpretations of federal data and academic research.
The dispute began when Vance, former President Donald Trump’s running mate, cited studies suggesting immigration increases housing costs and strains local budgets. Wolfers, a professor at the University of Michigan, swiftly countered, accusing the senator of misleading the public by selectively quoting from a Congressional Budget Office (CBO) report.
“Senator, you’re misleading folks again,” Wolfers wrote on X, formerly Twitter. “I just read the CBO report you recommend. It actually says that an immigration surge boosts federal revenues quite dramatically, and has only a small effect on mandatory spending and interest.”
At the heart of the disagreement is a CBO study on immigration’s fiscal effects. Vance highlighted a portion suggesting increased state and local government spending due to immigration. However, Wolfers argued this quote was taken out of context, emphasizing that the report primarily focused on federal budget impacts.
“The CBO study @JDVance cites analyzes how immigration improves the federal budget,” Wolfers explained. “Yet he pulls a misleading quote, talking about the effects of state and local budgets and ignoring the (likely larger) federal govt impacts.”
Vance’s initial post included references to other studies, including one published in the Journal of Housing Economics, which suggested immigration inflows correlate with increased rents and house prices in metropolitan areas. He also cited remarks by Federal Reserve Governor Michelle Bowman on potential upward pressure on rents due to immigration in areas with low affordable housing inventory.
Wolfers, however, maintained that the overall economic picture painted by the CBO report was far more positive. “My conclusions: First, a surge of immigrants will dramatically reduce the federal deficit. (Vance ignores this.) Second, I concede that it will likely raise state and local deficits. (He quotes this) In sum: It seems likely that the former is a bit larger than the latter,” Wolfers stated.
The economist urged the public to read the full CBO report, available at cbo.gov, to gain a comprehensive understanding of the issue. He emphasized the importance of considering both federal and local impacts when evaluating immigration’s economic effects.
This controversy unfolds against the backdrop of ongoing national discussions about immigration policy, housing affordability, and fiscal responsibility. With the 2024 presidential election approaching, these issues are likely to remain at the forefront of political and economic debates.
This exchange comes amid heightened political discussions on immigration, particularly following the recent vice-presidential debate between Vance and Minnesota Governor Tim Walz. During the debate, Vance and Walz discussed various issues, including immigration policies and their economic implications. The debate, held in New York City, was part of the 2024 election cycle and followed a presidential debate where Democratic nominee Kamala Harris emerged victorious over Trump.
Previously, Wolfers had expressed concerns about the inflationary effects of Trump’s economic policies, disputing Vance’s promises of affordable groceries and housing. Wolfers has been vocal about his skepticism regarding the competency of Trump’s economic team, describing it as “the least impressive list of economists in history” and criticizing Trump’s approach to policy-making.
