Mexico is NOT paying for Trump's wall

  Nearly $25 billion flows into Mexico every year from foreign countries. Trump falsely claims that this money is all from the U.S, and all from illegal aliens. It's a crucial part of Mexico's economy, and they have a strong incentive to have that continue.

In the memo, Trump said he would threaten to change a rule under the USA Patriot Act antiterrorism law to cut off a portion of the funds sent to Mexico through money transfers, commonly known as remittances. The threat would be withdrawn if Mexico made “a one-time payment of $5-10 billion” to pay for the border wall, he wrote.

 This is a really stupid idea, presented in an extremely simplistic way. Trump proposes to "impound all remittance payments from illegal wages". How do you do that? How do you determine which wages are illegal? If the government knew that someone was working here illegally, they would deport them. Not coincidentally, those "illegal wages" would no longer be earned, and Mexico would not get any further "remittances" anyway. 

  This is like proposing a plan that bans all heroin dealers from buying a new car. If you already know someone is a heroin dealer, they'll be jailed and they won't need a new car. It's not going to induce people to stop dealing heroin. 

  But suppose that this plan were to work. Mexico pays for the wall. Illegal immigration is halted. Mexico loses all of these "remittances" anyway, because nobody is working illegally to send money back to Mexico. And, if illegal immigration isn't halted, then why build the wall? Even dumber, Trump promises to deport 11 million illegal immigrants. There goes the "remittances"! 

  There's no way that this would make any financial sense for Mexico, if Trump's plan worked flawlessly. 

  On a practical level, you can't stop all payments across the border. What about American retirees living in Mexico? What about American businesses operating in Mexico? What about someone's kid who gets robbed in Tijuana and needs plane fare home?

To explain how he would have the standing to pursue his aggressive strategy, Trump begins by citing a provision in the Code of Federal Regulations that sets the standards for financial institutions in identifying their customers.

   Okay, so now we're talking about requiring anyone wanting to get a money order or wire transfer to show a passport. A Social Security card isn't good enough, because most illegal aliens have those (albeit falsified). How many documented citizens will be willing to take the risk for a cousin or other family member? Probably a lot. Others will do it for profit.

  But money crosses borders even easier than drugs. This opens up a huge market for organised crime. We can pretty much assume that Mexico won't co-operate in the investigation of money transfers. An individual can carry up to $10k in cash across the border -- no questions asked. Put a "bank" on the Mexican side of the border and American citizens can walk the money across, where it is then distributed exactly as if it were a money order. Americans can set up phony "businesses" in Mexico and transfer money from their American "owners". American "tourists" can make "purchases" of nothing at all. All of this would be done for a cut of the money, in the same way that banks deal with legitimate money orders. 

  So now we're talking about employing an army of forensic accountants, plus expensive prosecutions and investigations. And the big pay-off would be swiping some poor person's meagre earnings. Mexico has nothing to lose either way. Major money laundering operations would be set up to facilitate money transfers. Bribes would be paid. These operations would soon encompass other illegal activities, and Mexico would have a strong incentive to look the other way. 

  Throughout all of this, Trump's Administration would spend enormous sums in order to coerce Mexico to pay only slightly more. And the U.S. would be forced to continue doing it, year after year. The wall wouldn't be paid for, so we'd have all of those expenses, too. And the tightening of money transfers would encourage more illegal immigration. 

  Meanwhile, law-abiding Americans and businesses would pay more for financial services and be subject to absurd scrutiny. I don't see this as being very popular.