We live in a strange world now. A world in which Western democracies are broke and totalitarian regimes are flooded with cash. Examples of people with cash, the Saudis, the Chinese, the Russians. Example of people without cash. The Americans. So how can we make the people with cash give to the people without cash without dealing with their totalitarian regimes? Well USA has been doing a lot of that already by selling them US government debt. But these are desperate times. USA now needs another $700bn to shore up its financial institutions. How could it possibly get this money. Now here is an idea. USA should give nationality to those who invest over $1 million in equity in US real estate.
We know that most wealthy people in China live double lives. On one side praising their government and on the other side worrying that one day privileged lives will end. And same is true with oligarchs in Russia, and wealthy people in Iran, princes in Saudi Arabia. I am not saying they live in fear everyday but if US offered a passport to be used in case of need I think millions around the world would pay for the insurance. Let´s remember that there are 6.5bn people in the planet and 6.3bn are not American and tens of millions of those are pretty well off. At the same time we all know that USA real estate prices are on a free fall and that is the reason why mortgages are defaulting. So how about combining greed and fear in one package that gives foreigners first access to US real estate at bargain prices and secondly the US nationality?
To me the math is compelling. If one million foreigners invest one million dollars that is the trillion that America needs. Moreover America will not need the trillion because real estate prices will go up and mortgages will be backed. And if eventually those million very rich people end up moving to America more investment will follow. There are already many countries that give you residence and eventually nationality if you invest with them. I think it´s time for USA to do the same.
Follow Martin Varsavsky on Twitter: twitter.com/martinvars