The economic impact of the current Exodus from the United States.

Discussion in 'Economics' started by SouthAmerica, Apr 3, 2008.

  1. .

    April 3, 2008

    SouthAmerica: The Exodus from the United States continues and it is slowly snowballing.

    Last Saturday a friend of ours came for diner at our house. These is a couple who used to live here in Bergen County, New Jersey since the mid-1960’s, then they moved to Miami about ten years ago, but some of their sons still live on our area and they visit them on a regular basis.

    She was telling me that her grandson who also live in Miami with his father is very depressed because all his friends have moved to Brazil. All his father friends have moved back to Brazil in the last few years and there is nobody left in the area.

    She also told me that about ten years ago in downtown Miami they had a major shopping center with mostly Brazilian stores, not only the shopping center but many of the businesses in the area belonged to Brazilians including restaurants, real estate offices, bakeries, and so on. Today the shopping center is closed and most of the businesses in the entire area are gone. It looks like one of these ghosts towns that they have in the middle of nowhere that were abandoned decades ago.

    These days they feel kind lonely living in Miami since everybody that they knew went back to Brazil – an extraordinary exodus that it is hard to believe that so many people left town to never return.

    I have been mentioning about this exodus for quite some time now, but only in the last few months The New York Times and now the Financial Times are finally reporting on this exodus.

    The US government it does not know for sure if there were 12 or 20 million illegal immigrants living in the United States in 2005. Since then thousands of legal and illegal immigrants have been moving back to the countries from where they come from or they are trying to go to a country with better prospects for the future.

    A few years ago was estimated that there were about 1.3 million Brazilians living in the United States 50 percent legal and 50 percent illegal immigrants.

    The interesting part is that not only the illegal immigrants are moving back to Brazil, but thousands of people who had been living in the US for 10, 20 years or even longer. All these people are giving up on the American dream because they have realized that the American dream is gone or is dying at the speed of light.

    The exodus does not include only Brazilians – the exodus includes people of other nationalities and is it not affecting the illegal immigrant population, it does include thousands of legal immigrants as well.

    Between the legal and illegal immigrants in the United States we are talking about 50 million people and if only 10 percent of these people decide to go back to where they come from we still talking about 5 million people.

    And you can bet that when 5 million people leaves town they have a major impact on the communities that they leave behind with a major economic impact to the country and also to the communities where these people used to live.

    Just wait until the American mainstream media finally realize the economic impact of this exodus on the US economy – it will take a while since the American media takes a long time to catch on even about the most obvious things.

    Given enough time eventually they are going to connect the dots and they will realize the major negative impact that this exodus is having on the price of real estate in many parts of the country – making the real estate crisis even deeper and worse for years to come.

    This exodus of people from the United States it has many economic ramifications for the US economy including the impact on the price of real estate in the United States


    “North begins to lose allure for Brazilians”
    By Richard Lapper in São Paulo
    Published: April 2, 2008
    Financial Times - UK

    At the end of 2004, Genini Danelli paid what locals call a “consul” $10,000 to take him to Mexico and across the border into the US. The 44-year-old construction worker from the Brazilian city of Governador Valadares has had a poor return on his investment.

    Working on building sites in Boston, New Jersey and most recently in North Carolina, Mr Danelli earned about $500 (€315, £251) a week when times were reasonably good. Even so, it took him a 1½ years to pay off the debt, and in the past year or so things have gone downhill rapidly.

    The Brazilian real has strengthened against the US dollar, depressing the value in local currency of the $300-$400 a month that Mr Danelli sent home to his wife and four children.

    Over the past year or so, work has been harder to find as a result of the downturn in the US housing market; some months he even struggled to meet his $700 a month US rental bill.

    Shortly before Christmas, he returned to Brazil and is now organising building work from his home and working as a taxi driver to make extra money.

    “It worked out for some people, but for me it didn’t. I don’t know why, but it just wasn’t worth it in the end,” says Mr Danelli, whose brother lives in the US managing a successful landscape-gardening business.

    In Valadares, returned and disappointed migrants like Mr Danelli are increasingly common. Since the Brazilian recession of the late 1980s, the city has won something of a reputation as a centre for emigration to the US. Indeed, 30,000-40,000 people from Valadares – equivalent to at least one in eight of the city’s 250,000 population – live and work in the US, the vast majority of them in Boston suburbs, such as Framingham.

    But in the past few months hundreds – perhaps as many as 3,000 – have returned home, says José Bonifacio Mourão, the city’s mayor. The weakening dollar, rising US living costs, the collapse of any prospect of immigration reform and increasingly fierce policing have all made the US a less attractive place.

    “Migrants are really down. They Raimundo Santana, a journalist and says feel they have no prospects,” adviser to the city’s mayor who himself spent several years in the Boston area.

    Even successful migrants have been discouraged by the slow decline in their spending power. For six years Edson Djalma Fernández, 53, and his wife, Giany Aparecida, 37, worked double shifts at Boston branches of Dunkin’ Donuts and sent up to $3,000 a month back, enough to build a smart new house in a middle-class area of their home city.

    But they say things got harder after 2005. “We started noticing that our tips were getting smaller. People started to pick up their change when they came in for a coffee,” says Ms Aparecida.

    Petrol costs started to rise and the strength of the real – it has more than doubled in value since 2002 – meant Ms Aparecida could afford to send back less to her mother and children. At the end of 2006 she returned home, followed a year later by her husband. “We would have stayed a couple of years more but, because of the currency, it really wasn’t worth while,” she says.

    The flood of people back to Valadares is causing some damage to the city’s economy. Sueli Siqueira, a sociologist at the Universidade Vale do Rio Doce in the city, interviewed 200 recent returnees and found that less than half of them had accumulated any capital from their period in the US.

    Mr Santana says property prices have fallen and agents say few if any migrants now have the cash to pay outright for land. More than 20 travel agents that had specialised in the Mexico-US trade have closed their doors in the past two years.

    The decline in remittances – estimated by Mr Santana at about R$120m (US$68m, €44m, £35m) a year – could cause further problems, hitting local spending power in all sorts of ways. Ms Siqueira says many students rely on money sent by relatives living abroad to pay their fees but are now building up substantial arrears, for example.

    Already many recently returned migrants are considering emigration again. Ms Siqueira says 28 per cent of her interviewees are thinking about migrating to Europe, partly because stronger currencies will increase the value of the money they send home. Countries such as Portugal, Spain and Italy are especially attractive because Brazilians do not need visas to go there, she says.

    Genilson Soares, a 22-year-old recently deported from the US where he worked on building sites, is one of them and says he would love to go to Portugal or – better still – to study in Canada. “I learned how life is lived away from Brazil and I really want to try to do this again,” he says. “You can earn $100 in a day there. Here it takes me two weeks.”


  2. "The Exodus from the United States continues and it is slowly snowballing."

    You seem to be good at babbling with remarkable longevity

    US population (seems to be growing to me)
    2008 estimate 303,765,000
    2000 census 281,421,906

    If illegal immigrants leave, that is a good thing. They don't belong here in the first place. I am sure the Brazilian government and people both welcome ILLEGAL immigrants with open arms. You can have ours.


    GDP per capita:
    US $43,444
    Brazil $9,531

    US 4.8%
    Brazil 9.6%

    Population below poverty line
    US 12.8%
    Brazil 29.3%

  3. Right on man. Enough with the doom and gloom :)

  4. The Brazilian community in Newark, New Jersey has been growing by leaps and bounds in the last 15 years I have followed it and it is thriving.

    This could be a generational thing. People work hard here, save and go back to their country to retire and collect their US SS checks there.
  5. The OP just likes to babble. Apparently, reality does not stop the OP from spinning irrelevant diatribes...
  6. .

    April 5, 2008

    SouthAmerica: Reply to Trader Zones


    GDP % growth

    Year 2007

    Brazil = 5.4 %

    US = minimum

    Estimated % growth (implosion)

    Year 2008

    Brazil = 5 %

    US = (implosion)



    US = 5.1%

    Note: Plus over 5 million people who can’t find a job, but are classified as “discouraged workers.”

    Real US unemployment adjusted for discouraged workers.

    US = 10.0%

    Brazil = 9.6%


    Prison population:

    In 2007, the total population in Brazil was estimated to be 200 million people including an estimated 260,000 people in prison.

    In 2008, the total population in the United States it is estimated to be 303 million people including an estimated 2,200,000 people in prison. And there are also on top of that over 5 million American on probation.

    The United States population is 51 percent larger than the Brazilian population. But the United States prison population is 850 percent larger than the Brazilian prison population.

    Putting poor people in prison is one of the few ways Americans know how to create new jobs today inside the US economy.


    Brazil has paid almost all its international debt, and today the Brazilian government has enough foreign exchange reserves to pay all its cumulative debt – and the outstanding debt is very low when compared as a percentage of GDP.

    Today Brazil is a creditor nation and Brazil is in the best financial shape of its history.

    The Brazilian economy is ready to leapfrog into a spectacular future.

    The US has $ 9 trillion of cumulative debt plus another $ 2 trillion in outstanding debt by the states – and the federal government has another $ 70 trillion in liabilities that are coming due.

    For all practical purposes the US government is insolvent and bankrupt.

    Now the Federal Reserve started assuming the infinite losses of the banking system that also will increase the cumulative debt even further.

    The US economy is imploding, its best resources have been used on the past and the US economy will not be able in the future to generate the cash flow necessary to keep up paying even the debt that the US has been accumulating over a long period of time.

    I can keep going on and on here – I still have not mentioned that as Brazil, China, and other up coming countries are investing in the future as the United States is in the process of sinking like the Titanic; with the expenditures with the wars in Iraq and in Afghanistan plus the tsunami of expenses that has started coming due because of the Baby Boooooom generation.


    Other signs of US decline and that it is turning very fast into a has been economy.

    1) The space program.

    The Shuttle program was approved by Richard Nixon in the early 1970’s and today the Shuttle program has reach the level that was supposed to reach in 1980. (And that is what is considered state-of-the-art on that field today. The US space program has died since 1980.

    Today the most exciting thing about the Shuttle program it is to find out if the old thing is going to explode on its way up or on its way down – and the crew of the Shuttle spend most of its time on space putting band aids on the Shuttle and hope for the best on re-entry.

    2) The infrastructure of the entire country is obsolete and needs at least $ 2 trillion dollars just to keep going, never mind building new infrastructure systems.

    3) The Internet and Broadband

    Asia, and Europe are building systems that are light years ahead of the United States.

    4) Foreign Policy

    The United States today does not have influence even around its backyard.

    China is the most influential country regarding South America.

    In the Middle East the United States is engulfed in a losing war and every day the United States looks more like the Soviet Union in Afghanistan. (It looks like the end of the road for another superpower.)

    5) The educational system in the US today less than 50 percent of high school students can graduate from high school.

    6) Energy.

    As the United States has to attack other countries to be able to secure new sources of oil (Iraq and maybe Iran) to be able to supply its domestic energy needs – Brazil is energy independent today, and Brazil has found the largest supplies of oil and gas in Brazil that will make the country even more prosperous in the coming years.

    This major oil and gas findings in Brazil is the largest oil and gas findings in the world on the last 30 years – and the experts think that Brazil has a lot more still to be found.

  7. G-Boa


  8. Don’t worry, they build the wall between USA and Mexico to stop as from escaping out of US
  9. .

    April 6, 2008

    SouthAmerica: Reply to Trader Zones

    Here is some more babble for you. But these babble represent the actual facts and is the reality today.

    Other trends and signs of the US decline and that it is turning very fast into a has been economy.

    United States:

    When Bill Clinton left office in January 2001 the United States had 17 million people receiving food stamps to be able to survive.

    By the end of 2008 when George W. Bush completes his 8-year in office the United States will have 29 million people receiving food stamps to be able to survive.

    That is a very visible sign of decline and despair.


    Since Lula became president of Brazil in 2002 the situation has improved significantly for the very poor in Brazil with his bolsa familia and other social programs.


    SouthAmerica: I give you an analogy for you to understand what is happening.

    Like the fellow that lives like a millionaire by getting his cash flow from borrowed money. He gives the appearance to the world that he is very wealthy but he is living in this illusory world and trying to project the appearance that he is rich by borrowing money from banks and credit cards.

    He buys nice cars expensive house, and all kinds of materialistic things to project the appearance of wealth. But in reality he is almost at the breaking point.

    When the banks or the credit card companies stop increasing his credit line that is when the reality sets in and the house of cards comes crashing down.


    Living on borrowed money and at the same time thinking that they are very wealthy.

    As of Date - US Government Total Public Debt Outstanding

    04/03/2008 $9,437,425,175,221.31
    09/28/2007 $9,007,653,372,262.48
    09/30/2006 $8,506,973,899,215.23
    09/30/2005 $7,932,709,661,723.50
    09/30/2004 $7,379,052,696,330.32
    09/30/2003 $6,783,231,062,743.62
    09/30/2002 $6,228,235,965,597.16
    09/30/2001 $5,807,463,412,200.06
    09/30/2000 $5,674,178,209,886.86

    Total public debt outstanding on 01/31/2001 was $5,516,070,587,057.36 and since George W. Bush became president on January 20, 2001 the US government added to its outstanding debt $ 4 trillion dollars.


    Year - Interest expense paid by US government on its outstanding debt

    2008 $221,541,307,516.69 (for the six month period ending March 31, 2008)
    2007 $429,977,998,108.20
    2006 $405,872,109,315.83
    2005 $352,350,252,507.90
    2004 $321,566,323,971.29
    2003 $318,148,529,151.51
    2002 $332,536,958,599.42
    2001 $359,507,635,242.41
    2000 $361,997,734,302.36
    1999 $353,511,471,722.87
    1998 $363,823,722,920.26
    1997 $355,795,834,214.66
    1996 $343,955,076,695.15
    1995 $332,413,555,030.62
    1994 $296,277,764,246.26
    1993 $292,502,219,484.25
    1992 $292,361,073,070.74
    1991 $286,021,921,181.04
    1990 $264,852,544,615.90
    1989 $240,863,231,535.71
    1988 $214,145,028,847.73

    Note: Since January 2001 when George W. Bush became president the United States government paid over $ 3 trillion dollars in interest on its outstanding cumulative debt.

    Source for above info.

    These is an example of the type of investment in the future of the United States that is included on the US government's annual budget every year.



    GDP (purchasing power parity): $ 2.5 trillion US dollars (2008 est.)

    GDP (official exchange rate): $ 1.7 trillion US dollars (2008 est.)

    Brazilian government public debt as of June 2007 was 40% of GDP (source: Brazilian Central Bank)

    Total current Brazilian government cumulative outstanding debt is around $600 billion US dollars – but less than $100 billion US dollars of the total outstanding debt are borrowed money in foreign currency.

    By the end of 2008 the Brazilian Central Bank would have enough foreign currency reserves on hand (over $ 270 billion US dollars) to be able to pay the entire debt of the Brazilian government in foreign currency and much more.

    If the Brazilian government decides to pay the balance of its foreign currency debt they can reduce the Brazilian public debt to around 30 percent of GDP.

    In theory the Brazilian government can be foreign debt free today if they want to achieve that goal.



    Brazilian government Budget for 2007:

    revenues: US$244 billion
    expenditures: US $220 billion

    The Brazilian government did spend US$ 220 billion in 2007 to pay for all its expenditures.

    United States:

    Interest expense paid by US government on its outstanding debt:

    Year 2007 = US$ 430 billion

    During the year of 2007 the United States paid on interest alone on the borrowed money that they have pissed away about twice the amount of money that the Brazilian government used to operate a country such as Brazil during that year.

    Today it cost more money for the United States to operate its vast prison system and keep over 2.2 million people behind bars in the United States than it cost the Brazilian government to operate a country such as Brazil.

    If you ask me that is another sign of US decline by any measure.

  10. This leads me to believe that Brazil just has a LOT more criminals walking the streets...YAY Brazil. :D
    #10     Apr 6, 2008