tion follows closely from the question posed. An incremental immigrant arrives, and a long chain of consequences follows, continuing after the immigrant's death through all of the descendants. In the cross-sectional approach, the appropriate demographic formulation has been less clear. We hope to have shown, however, that whatever the general weaknesses of the cross-sectional approach, the failure to include the effects of all concurrent descendants biases the outcome. In practice, the resulting distortions are very large and cannot be ignored.

By definition, federal, state, and local budgets must meet the basic accounting identity: total revenue equals total expenditures. Therefore, one might expect that taxes could not exceed costs in our calculations. However, for purposes of examining the fiscal impact of an incremental member of the population, we exclude from consideration (a) expenditures on public goods, payments for debt interest or principal, and purchase of financial assets; and (b) revenues from interest on assets, the sale of assets, and new debt issued. We assume that adding or subtracting an incremental member of the population will not have any impact on these types of expenditures and revenues in the current period. It is certainly true that immigration will affect public assets and public debt in the long run. This impact is considered in longitudinal studies, but cannot be incorporated into cross-sectional studies.

At the federal level, we excluded (a) $346 billion in expenditures on public goods, (b) $203 billion in expenditures for debt repayment, and (c) $203 billion in revenue from net new borrowing. Therefore, federal tax revenues exceed federal expenditures by $345 billion. The fact that debt repayment equaled net new borrowing in FY 1994 is purely coincidental. For example, in FY 1996 federal debt repayment exceeded net new borrowing by $96 billion. The larger debt payments and smaller deficit in FY 1996 would make the federal fiscal impact of immigrants significantly more positive in 1996 relative to 1994.

At the state and local levels, we excluded (a) $65 billion in expenditures for debt interest, (b) $167 billion in expenditures for debt repaid, (c) an estimated $46 billion in expenditures for financial assets or funds otherwise not accounted for, (d) $49 billion in revenue from interest earnings and the sale of assets, and (e) $211 billion in new debt issued. Therefore, state and local tax revenues exceed expenditures by $17 billion. This represents 1.2 percent of total revenues and

Front Matter (R1-R14)

1 Introduction (1-12)

2 An Economic Framework for Assessing the Fiscal Impacts of Immigration (13-65)

3 Fiscal Impacts of Immigrant and Native Households: A New Jersey Case Study (66-119)

4 The Fiscal Impacts of Immigrants: A California Case Study (120-182)

5 The Current Fiscal Impact of Immigrants and Their Descendants: Beyond the Immigrant Household (183-205)

6 Immigrants and Natives in General Equilibrium Trade Models (206-238)

7 Labor Market Outcomes of Female Immigrants in the United States (239-288)

8 Historical Background to Current Immigration Issues (289-366)

9 Immigration and Crime in the United States (367-387)

10 The Impact of Recent Immigration on Population Redistribution Within the United States (388-448)

Index (449-458)