Toward a Coherent Open‑Borders Framework for the United States

Steel-Manning The Open Borders Position 

I happen to think an “open borders” policy would be disastrous for the United States. Most of its cheerleaders haven’t followed the logic to its inevitable fiscal and social endpoints—and a smaller but vocal subset seems to champion it precisely because it would overload the system à la the Cloward–Piven strategy. Still, in the spirit of steel-manning the opposing view, the essay below sketches what a truly coherent—though radical—open-borders framework might require.

Before we get to that, a brief programming note. On Wednesday, one name from our Market Watchers X list (OUST) and one of Portfolio Armor's top ten names (OKLO) both exploded more than 27% higher on the day. Today, we have a trade teed up on a name that's both in our Market Watchers List and our top ten—and on top of that, Nancy Pelosi owns it. If you'd like a heads up when we place that trade, you can subscribe to the Portfolio Armor trading Substack below. 

Thursday Afternoon Update: We placed our Nancy Pelosi trade, and a bonus "embassy evacuation" volatility trade in the event Iran pops off within the next week. 

Friday Afternoon Update: The Iran situation popped off last night, as you know. I sold half of our volatility hedge for a gain of 159% today, and I'm letting the other half roll in case Iran manages to strike back at Israel or U.S. assets in the region. If not, I'd guess we're back to up-and-to-the-right. 

Second Friday Afternoon Update: Exited the other half of our volatility hedge for a gain of 53%. Doesn't look like Iran's going to be able to do much before this hedge expires. 

And if you want to hedge or access our system's top names, you can go to our website our iPhone app. 

Now on to our open borders post. 

Toward a Coherent Open‑Borders Framework for the United States

A thought experiment in redesigning institutions before flinging the doors wide open

1  Why “open borders” clashes with the status quo

a. Welfare‑state arithmetic

• Mass democracy + generous transfer programs + unlimited low‑skill immigration ≈ fiscal explosion.

• Empirical warning: Danish Ministry of Finance registry study shows both first‑generation and second‑generation non‑Western immigrants are net tax‑negative over their lifetimes.

b. High‑friction criminal‑justice model

• The United States already spends ≈ $350 B a year on policing, courts, and prisons (CBO, 2024)—an expensive baseline if the population balloons.

• Complex due‑process rules lengthen every step.

c. Geopolitical entanglements

• Active rivalry with China, Russia, Iran, etc., magnifies dual‑loyalty risks.

• Two U.S. Navy sailors of Chinese origin charged with espionage in 2023 highlight the gap between America’s “proposition nation” ideal and old‑world ethnonationalism.

  🚨 Two Chinese-born spies employed by U.S. Navy with ‘Secret’ security clearances passed extremely sensitive military information to a Chinese Ministry of State Security (MSS) officer “employed by a hostile foreign state (China)”. Jinchao Wei and Wenheng Zhao were arrested. 1/3 pic.twitter.com/j6e0lVKIO8

  — 🇺🇸 Kyle Bass 🇹🇼 (@Jkylebass) August 4, 2023

d. Adverse‑selection magnet

• Generous social programs + weak entry filters attract migrants with the greatest expected benefit draw.

2  Blueprint for a sustainable open‑borders America

1. Trim mass democracy—link voice to stake

   • Restore state‑legislature election of Senators (17th‑Amendment rollback).

   • Institute a net‑taxpayer voter qualification at the federal level.

   • Tighten protest rules: no foreign flags at political demonstrations to dampen imported sectarian conflict.

2. Convert the welfare state to enforced savings

   • Phase out Social Security/Medicare for < 50 yos; mandate tax‑deferred retirement accounts instead.

   • Replace Medicaid with compulsory high‑deductible catastrophic plans + tax‑preferred HSAs.

   • Repeal coverage mandates for non‑catastrophic services (e.g., psychotherapy) to keep premiums low.

3. Low‑cost, high‑deterrence justice

   • Introduce summary corporal penalties (e.g., lathi strikes) for lower‑level but socially costly crimes (theft, assault).

   • Outsource serious‑crime incarceration to treaty partners with lower per‑diem costs (El Salvador model).

   • Exile or perpetual exclusion for repeat offenders.

4. Ending affirmative-action set-asides

   • Programs created to remedy historical discrimination against a ~13% domestic minority can’t scale to a world in which 70-90 % of the population might qualify as “protected” after decades of open immigration.

   • If benefits flow to all newcomers who check a race or ethnicity box, they cease to function as reparative measures and instead become a universal subsidy—exactly the kind of cost spiral open borders can’t afford.

5. Price the border—entry fee + behavior bond

   • $10 k total: $5 k non‑refundable fiscal fee, $5 k refundable after 12 months incident‑free.

   • Automatic repatriation for serious illness, childbirth, or felony arrest within the bond window.

6. Adopt armed neutrality abroad

   • Shrink forward deployments; pivot to hemispheric defense.

   • Cut defense outlays from ~3.2 % to ~1.5 % of GDP, funding transition costs for domestic reforms.

   • Neutral stance reduces motive for foreign terror and dual‑loyalty conflicts.

3  Glimpses of movement in this direction

• Mounted LAPD using long batons (June 2025 protests)—see LA Times photo‑essay for visuals reminiscent of India‑style lathi control; see also the clip in the X post by RT below. 

  Female cop on horseback delivers baton blows to LA rioter assaulting her fellow officer and horse
  
  Bonk! pic.twitter.com/2bJWV3WlV0

  — RT (@RT_com) June 10, 2025

• Texas H.B. 4566: $10 k entry surcharge bill (failed committee, Feb 2024) served as a prototype fiscal gate fee.

• House GOP draft “bonus depreciation + visa bond” package (OBBB Title IX leak)—Politico scoop May 2025 couples industrial policy with migration self‑funding.

• Selective‑service debate for resident aliens—Senate Armed Services hearing, Mar 2025 (transcript).

• Trump Administration 10 % baseline tariff + carbon border adjustment concept—see White House fact sheet, May 2025.

• The Supreme Court’s Students for Fair Admissions v. Harvard decision (June 2023) curtailed race-based preferences in college admissions.

• Several state pension systems (e.g., Texas ERS, Jan 2025) have since eliminated minority-only manager programs to pre-empt legal challenges.

• July 2025 DOJ guidance advises federal agencies to “review all grant criteria for strict race neutrality” in light of the ruling.

4  What this solves—and leaves unresolved

5  Take‑away

Open borders can be squared with solvency, security, and social cohesion—but only by radically redesigning democracy, welfare, justice, and foreign policy first. Anything short of that invites the fiscal‑and‑civic doom loop critics fear. And anyone pushing open borders without arguing for these sorts of radical redesigns is either clueless, dishonest, or destructive.