Wednesday, May 18, 2011

Fleeing the Economic Dust Bowl: Indebted, Jobless Refugees . . .

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 . . . seeking asylum from U.S. economic slavery . . . which countries might be willing to take us in?


Anonymous said...

Could this country revoke an indentured servants right to a passport if they saw a mass exodus out of this country? The government has already created a virtual debtor's prison. Why not make the transformation complete?

DJ said...

It is undoubtedly true that more and more of our freedoms are being eroded by government with each passing day. Even so, I consider exit restrictions to be one of the least likely threats to our freedom here in the US.

The right to leave for another country is a freedom which is ingrained deep into American culture, and the memory of the Iron Curtain and the effects of its associated restrictions on emigration still burns strongly in the public consciousness. It is true that the politicians are trying very hard to emulate the Soviet Union in other undesirable ways (for example, the RealID national ID card; can we say "Papers, please?"), and there is of course very strong anti-immigrant sentiment. But all of the efforts to date have been focused on keeping people out. No serious attempts have been made so far to keep people in, and I would argue as well that no such measures are necessary, because Americans in general are distrustful of foreign lands to the point where most of them consider it crazy to even travel overseas, let alone emigrate. The American citizenry is already adequately trapped in a prison of their own making, one arising from their ignorance and mistrust of other cultures, and having nothing to do with walls or guards.

As an American living in Canada, and with a job that involves quite a bit of international travel, I've crossed the borders of many countries, and the US-Canada border in particular more times than I can count. I've been to numerous countries that post border guards at the exit booths and examine your passport just as carefully when you leave as when you arrive. The US is one of only a very few countries in the world that imposes no exit checks on travellers whatsoever. (There is a slight exception in that the names of air travellers are sent in advance to DHS under the Secure Flight program, and this does worry me somewhat, but compared to what other countries do, it's really minor.)

The only government program that I've seen which even vaguely resembles some form of exit restriction is the DHS's biometric exit program, which only applied to non-US citizens. This program was phased out by the Obama administration.

My advice: if the US government ever begins restricting emigration of US citizens, then it's time to leave, pronto, before it's too late. Those who remain behind are in serious trouble, serious as in Russia during the time of Joseph Stalin. The right to leave is the single most reliable indication of whether a country really is a free country. But I don't think the US will ever build walls to keep people in. I think the US still very fundamentally respects the right of free exit to all, and with our xenophobic culture, the prospect of a mass exodus severe enough to lead to exit controls is, to say the least, ridiculously unlikely.

Anonymous said...

DJ- you're forgetting the money factor. Your historical perspective is good, but those examples were generally about people fleeing things other than crooked loans.

If enough people flee the U.S., they will probably make treaties that allow banks to chase you into other countries. They'll start treating debtors just like criminal fugitives.

Anonymous said...

How do you legally move to another country though, when you're in a ton of debt and you have a degree that's basically worthless in the US and definitely worthless throughout the rest of the world?

I'm ready to throw in the towel, but the only viable option I've found is teaching English in Asia, which would be fine for awhile, but it doesn't seem like it would be feasible to start a family while you're doing that. Are we really all just screwed?

Cryn Johannsen said...

@Anonymous 9:06 PM - I am dashing off to dinner, but I have some thoughts on what you said. Please check back in. Thanks for the comments - food for thought on this end. :)


DJ said...


Your post made me look up whether the US would ever actually deny someone a passport because of debt. It turns out that unpaid child support is the only form of debt which by itself disqualifies one from being issued a passport (source). Interestingly, unpaid taxes can land you in jail, but cannot by itself result in denial of a passport.

As far as I know, unpaid child support and unpaid taxes are the only forms of debt that constitute criminality. Making unpaid student loans criminal, as you suggest, would go against hundreds of years of liberalization of debt laws dating back to the abolition of debtors prison. I think that's an important bit of perspective to have, which is why I went and did the search to make the comparison.

Regarding your larger point, I must admit that I don't have any such debt and so I don't personally pay very much attention to what happens when you get screwed by creditors. (I pay attention instead to avoiding debt and, failing that, paying it down -- a much better use of my energy, I think.) We need to keep in mind that the main problem with student loans is not the debt itself per se, but the fact that student loans have such a terrifying status under US law (lack of bankruptcy protections, administrative wage garnishment, no statute of limitations, and so on). Moving to another country doesn't stop creditors from pursuing you (it never has), but it does often render pursuit economically unprofitable, and most importantly for student loans it removes most of the powerful weapons that they have available to use against you under US law. A creditor for instance would not be able to garnish your wages in another country without a court order, and I might add that it is not very easy for them to get a court order in most other civilized countries.

It's possible that if the "problem" of emigration becomes serious then the US might push for international treaties to make sure Americans pay their debts. But, as I explained in my first post, it is highly unlikely that the small number of people who leave the country will ever represent anything more than a negligible annoyance to Sallie Mae and friends. I also haven't heard any talk of other countries expressing interest in the idea of emulating the US's harsh treatment of student loan debt.

DJ said...


I guess my best advice to your first question would be "well, don't do that." If you avoid debt and earn a useful degree, you're a lot better off. Now, I understand that you may be forced by economic circumstances to take on debt. However, the choice of what degree you earn is for the most part entirely under your control: with very few exceptions, most universities allow any student to major in any subject that the school offers. There are many degrees which, far from being worthless, are in high demand even in this economy. One example that immediately comes to mind is computer science grads, who are being heavily recruited in Silicon Valley at this very moment. Sure, these things come and go, and future trends are difficult to predict, but some generalizations always hold. Science and engineering degrees have always held their value. Degrees in some other areas, not as much. (Disclaimer: I don't actually know your major, but I am going by your statement that your degree is "worthless" and my interpretation thereof.)

Most of the time, when one runs across tales of student loan woe, a common thread is that the borrower obtained a degree in some area of study which is completely impractical. Some examples: religious and women's studies, political science, environmental studies, photography. Of course this is not the sole factor in determining indebtedness, and there are obviously (say) a few engineering grads in bad financial shape, but in general your major plays a major(!) role in your career trajectory, and it's dishonest to pretend otherwise.

As for specific advice on moving to another country, countries that want immigrants usually have a points system for admitting new residents. Start by looking up government web sites in the target country that deal with immigration (e.g. Canada, Australia). The points are based on factors such as language proficiency, prior work experience, and yes, degrees. Generally speaking, a bachelor's degree, no matter what major it is or how worthless it is to you, is often worth substantial points for immigration purposes. Work experience points are harder to come by; usually countries will award more points to applicants from in-demand industries, which points back again to the importance of choosing your career path wisely. Prior experience is what counts here, not future plans.

These may not be the answers that you wanted to hear, but they're the answers to the questions that you asked, and I hope that they help.

Cryn Johannsen said...

@DJ - thanks so much for answering the pragmatic questions. I'm greatly appreciative.

Anonymous said...

@DJ - thank you!

DJ said...

Sure, you're welcome. Here are a few more thoughts. I figure that as long as some people are reading, I might as well share.

Anonymous @9:06 mentioned debt and immigration. In my experience, debt itself doesn't matter for immigration. You will not be asked about debt on your immigration application, and debt does not penalize your application in any way.

However, your financial status does indirectly affect the immigration process, since in order to be eligible to immigrate, you usually must have either a firm job offer in the target country, or a certain amount of cash on hand. The amount needed varies depending on country and family size, but count on a minimum of (say) $10k plus 2-3k per dependent. At some point during the application process you will need to prove that you have the funds (for example by showing a bank statement). It may be difficult to accumulate this amount of cash if you are dealing with debt.

Additionally, in countries with public health care (i.e. most countries), you need to pass a medical exam. This is to prevent people with poor health from immigrating just to get the free health care. I've actually had a few friends for whom this was the disqualifying factor (because they had diabetes or some such condition), which is why I mention it.

Cryn Johannsen said...

@DJ - even though people don't always comment, AEM receives between 400 and 1000 hits a day, and my unique readers continue to increase. Your comments, I am sure, are appreciated by a good number of people, and I also want to thank you for sharing. Like I said, I have some thoughts, but they are from a different angle.

DJ said...

Update to my 4:45 post:

The latest version of the Canadian immigration application forms, dated July 2011, contains the following interesting additional clause: "All assets and liabilities, whether located in your country of residence or elsewhere, should be identified." This instruction was not present in previous versions.

It doesn't say whether they will actually disqualify an applicant for having too much debt, but it's telling that they are starting to ask the question.

DJ said...


It has come to my attention that the MAP-21 act, SB 1813, currently pending before the House of Representatives contains a provision that if passed would revoke the passport of (and/or deny the issuance of a passport to) anyone accused of being delinquent on more than $50000 in federal taxes. Note that proof of delinquency in court is not required -- mere accusation is enough.

Here is the full text of bill. Section 7345 is the relevant section. The bulk of MAP-21 is a routine highway funding bill. The passport part was slipped into the bill, very underhandedly in my opinion, in an amendment sponsored by Sen. Harry Reid.

I believe this provision is significant because it represents the first step down the slippery slope of restricting the emigration rights of debtors. A year ago I wrote that the first step down this path was rather unlikely and would represent a major erosion of our fundamental freedoms. Unfortunately, it seems I was wrong on the first count.