This section provides a ballpark estimate of this debt market’s size using a set of basic assumptions as to the type of loans issued and their valuation. The structure of loans and how financial institutions would lend to gold card migrants are important considerations for estimating the size of the debt market. Instead of pledging real estate as collateral, as in a traditional mortgage, the borrower would most likely pledge his gold card as collateral for a gold card loan. Other forms of collateral such as migrant work contracts, wage garnishment provisions, or loan guarantors could complement or substitute for the gold card as collateral.

We assume that the government would sell 640,000 gold cards annually in perpetuity at an average price of $45,000 each whereby the purchase is financed by debt, which yields a total volume of gold card purchases of $28.8 billion per year payable to the federal government. Cash sales would produce about $13.5 billion in additional annual revenue, and ISAs would add about $2.7 billion. Next, we assume that the number of gold cards sold annually would remain constant far into the future so that the annual dollar value of gold card purchases would also stay constant.

There is some uncertainty in calculating the cost of capital for gold card loans, because borrower creditworthiness would be heterogeneous due to purchaser differences in wealth, income, age, and profession, as well as because purchasers would mostly lack a credit history in the United States that lenders could use to estimate the likelihood of repayment. Therefore, in order not to overestimate the size of the gold card loan market, we use conservative assumptions regarding discount rates for gold card loans. Specifically, we discount annual loan volume using two approaches grounded in market data.

The first approach uses a lower‐​bound discount rate of 3.994 percent in perpetuity, which is the average rate for 30‐​year fixed rate mortgages from 2015 through December 2019.11 Using the average 30‐​year fixed rate mortgage interest rate is an appropriate assumption because some gold cards are as expensive as a house and because about 64 percent of foreign‐​born residents who purchase a house in the United States finance it with a mortgage. Using this approach, the present value of gold card loans in perpetuity would be $721.1 billion, equal to about 17.31 percent of existing consumer credit outstanding in the United States.12 We must stress that the mortgage rate used here should be seen as the absolute lowest bound rate because mortgages are collateralized debt, collateralized debt has a lower rate because it is less risky, and it would probably be more difficult to collateralize a gold card loan.

The second approach uses an upper‐​bound discount rate of 16.675 percent for gold card loans in perpetuity. The 16.675 percent rate is the average of prevailing personal loan rates as of January 2020 from Bankrate​.com.13 Specifically, we use the mean of the prevailing rates for “good” and “average” credit scores—14.5 percent and 18.85 percent, respectively. Using the mean rate of 16.675 percent to discount annual gold card loan volumes in perpetuity yields a present value of $171.9 billion, equal to 4.13 percent of existing consumer credit outstanding in the United States.14

While there is great variance in our estimates, the figures that result under both scenarios would represent a significant increase in the stock of outstanding credit in the United States to finance the productive addition of workers, entrepreneurs, investors, and other immigrants to the U.S. economy. The above are ballpark estimates based on conservative assumptions and would vary based on market conditions, the immigration statute, and other regulations.